Home > Uncategorized > Spotting Fraud and the Fraudsters’ Mindset, Journal of Accountancy with Comments

Spotting Fraud and the Fraudsters’ Mindset, Journal of Accountancy with Comments

August 4, 2012

The intro to a Journal of Accountancy article, What’s your fraud IQ, Click Here, states in part:

“While most accountants are familiar with methods for identifying manipulated  accounting data, effectively fighting fraud involves going further and  understanding the human elements involved. Such knowledge can help CPAs design  or assess internal control initiatives, recognize fraud red flags during  professional engagements, and identify where organizations are most at risk.  Take this quiz to see whether your knowledge of fraudsters’ mindsets,  characteristics, and behaviors is sufficiently honed to help you recognize the  warning signs of fraud.”

My experience in cases involving fraud and theft in a multiple of different situations supports a conclusion that there are people who think differently, who have natural personality differences or deficiencies – typically they are very quick thinking, don’t even consider that it might not be acceptable or appropriate to steal or take from others, and feel entirely comfortable and at-ease lying or hiding the truth in face-to-face conversations.  It is possible for an auditor to learn methods of fraud and techniques for detection, but I believe it is difficult for an auditor to truly understand or get into the fraudsters’ mindset, unless the auditor also has those same or similar personality differences or deficiencies.

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