Fraud Prevention and Detection

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3

The Dynamics and Root

Causes of Fraud

INTRODUCTION

Now that the reader understands the basic elements of fraud, we move on

to an essential component of the Red Flag System: the dynamics and root

causes of fraud.

WHO COMMITS FRAUD?

There is a great deal of research on who commits fraud. Studies have

found the following characteristics of the typical fraudster:

• Roughly two- thirds of fraud cases are committee by males.

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• About half of all fraudsters are between the ages of thirty- one

and forty- ve.

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• More than half of fraudsters have a college degree or higher.

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• More than one- third of fraudsters work in a nance function.

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Associat