Expense Account Fraud
As one of the most pervasive form of fraud, expense account fraud is an issue of great concern to both big and small companies. According to the Association of Certified Fraud Examiners, as much as 14.5% of all asset misappropriations are associate with this form of fraud (ACFE, 2012). For many pilfering employees, the motivation for their actions is due to the ease of rationalization of their actions. The fraud triangle, which shows the main reason for the commitment of this form of fraud, indicates that opportunity, pressure, and rationalization are the causes (West, 2012).
Rationalization refers to the process where an employee finds the commitment of this crime justified, which makes these offenses acceptable in their conscience. Some of the common forms of rationalization are that they deserve these extra luxuries. Senior employees may also argue that they are always at work; therefore, their personal and business expenses are one and the same thing. In turn, the rationalization of these offences makes it easier for them to commit the fraud. Moreover, it also enables them to continue with their fraudulent behaviors (West, 2012).
Pressure, in the context of expenses accounts fraud refers to the financial constraints that may make an employee to be motivated to commit this form of crime. When an employee is underpaid and his/ her salary cannot be able to pay for his/ her basic needs, he/ she may be motivated to commit this fraud. An employee may also be motivated to commit this crime if he/ she wants to have a higher lifestyle than what his/ her salary can pay.
Negligence on the part of the management may act as an appropriate motivator to commit this type of fraud. In part, the reason for installation of strong internal control measures is to ensure that employees cannot easily commit fraud without been detected (Margaret & Peck, 2014). An organization can implement strong internal controls to avoid a negligence motivated expense fraud.
Types of Expense Fraud
            Expense frauds normally involve bogus expenses or compensations/ reimbursements for non-company related transactions. Another method used in committing these crimes is classifying expenses into the “below the line expense” category. Most organizations reduce the number of receipts that employees keep by requiring that expenses that do not reach up to a certain level to be compiled in a single receipt. This form of compiling of receipts is what is referred to…………………..
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