more-arw search

Q&A Forum

To prevent fraud, should accounting professionals command a higher rate of pay?

In over 80 percent of reported fraud cases in 2010 and 2011, the perpetrator displayed one or more of the behavioral red flags associated with fraudulent conduct, according to the “2012 Report to the Nations on Occupational Fraud and Abuse” from the Association of Certified Fraud Examiners (ACFE). The top red flags of behavior present during a fraud scheme, listed from more common to less common, are: - Living beyond the person’s means - Financial difficulties - Unusually close association with vendor/customer - Control issues, unwillingness to share duties - Divorce/family problems - “Wheeler-dealer” attitude - Irritability, suspiciousness, or defensiveness - Addiction problems - Past employment problems - Complaints about inadequate pay - Refusal to take vacations Would a higher rate of pay for accounting professionals reduce the risk of fraud?


Jane Levin
Title: Corporate Controller
Company: Private
(Corporate Controller, Private) |

Hmmm, that all seems like personal trouble that an extra $5K wouldn't solve. Those are longer term issues, and more money could even lead to more trouble (by further extending oneself beyond one's means). Many of those can be dealt with at least a bit by doing a background and credit check on prospective employees. We do that with all accounting, finance and HR employees and look for red flags.

This is an interesting list, though. Thanks for posting.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Background and credit check could be implemented. I would turn to a stronger set of checks and balances in place in those key roles. Inspect what you expect.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

If fraud is being committed by a few outliers, I can not understand increasing all pay. It would never pay-off. Solution - quality hires, envoronment of ethics, and as Christie points out Controls. Please check out this blog post if interested - "The Best Way to Avoid Fraud is to Remove the Opportunity" (

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Should we command higher pay - Yes

Will it stop fraud? -- Well I have a bridge for sale that spans the Hudson River :)

Patrick Fleck
Title: CFO
Company: AnswerLab, LLC
(CFO, AnswerLab, LLC) |

Before we jump to a lot of conclusions here, by fraud, do you mean theft or cooking the books? Furthermore, it seems that you're implying that it's the accounting folks who are engaging in fraud. Much of what you're describing goes on elsewhere in the organization. For example, managers in operations can be very tempted to take bribes from vendors unless good controls are in place. When it comes to cooking the books, in my experience, the pressure to do so rarely comes from within accounting or finance, with the exception of when it comes from a CFO who cannot say "no" to his CEO. For any CFO or controller, I would highly recommend being an astute observer of the CEO's behaviors, including how they handle their personal finances. If they are living beyond their means, it's going to make the financial officer's life much more difficult. The best thing you can do is live well within your own means, so that you will always be able to hold the line on ethics, and if you have to, walk away from any job anytime you feel compromised. I'm sorry to say it, but that's just part of being a high-ranking financial person. You need to keep a cash cushion available to carry you through the gaps in your career that you will undoubtedly experience from time to time because you've had to walk away from bad situations. That's just the reality.

(CFO) |


I work in the public sector and, many of the activities you mention are rampant and there is no way to stop them as, you'll likely lose your job and none of the fraudulent activity will change.

It's not a conspiracy by the way. It's a symbiotic relationship between elected officials bent on milking perqs and votes; entity general managers with egos as big as they get; the fourth estate not doing its job; large groups of public employees protecting their positions in an effort to reach that golden ring called retirement - even when it is ten or fifteen years away; and finally, a generally cynical and disinterested public.

Now that I re-read my run on sentence above, I would recommend forcing public agencies to pay less by freezing their ridiculous defined benefit pension and health care in retirement plans and moving them to defined contribution plans like the rest of the world has. That might make employees less inclined to participate in the see, hear and speak no evil group-think activity and speak up once in a while thus leading to less proclivity by the powers that be to engage in fraudulent activity.

One can only hope...............or return to the private sector. ;-(


Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email [email protected] to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.