Lower your risk of embezzlement
The results of a 2011 study by Marquet, an investigative and litigation support firm, offer up this profile of a typical employee embezzler from a cross section of private and public organizations:
- Criminal background: Most embezzlers had no criminal background.
- Position: Over 70 percent worked in accounting, finance, or bookkeeping departments.
- Duration of theft: The average duration of theft was about five years.
- Technique: The most common embezzlement techniques involved the use of forged or unauthorized checks.
- Motivation: Paying off gambling debts was a leading cause (20 percent), but most just desired a more lavish lifestyle.
- Gender: 64 percent were women.
- Average age embezzlement began: 42
Embezzlers often succeed because of inadequate financial controls where there is no segregation of duties. An earlier blog post on Crime Insurance offers helpful information on this topic. Below are the top three risk management controls to prevent embezzlement:
- Require a countersignature on all checks or checks over a certain amount.
- Require bank statement reconciliation by someone who is not authorized to deposit or withdraw.
- If you allow the use of credit or debit cards, make sure that the monthly statements are reviewed by someone who is not authorized to use the card.