One of the main reasons is that employers must put trust in their employees and give them access to data and assets. It’s also important to remember that employers give responsibility to people who are trusted. If someone wasn’t deemed trustworthy enough to take money to the bank, she or he wouldn’t be handed the bank deposit. That trust inherently means that opportunities to commit fraud are handed to employees each day.
The way modern business is conducted can contribute to the fraud problem. Managers are supervising many people and can’t possibly watch over all of them. Some employees work offsite or telecommute, making supervision of them more difficult. Lack of real loyalty in the business world may contribute to the fraud problem because employees may have an easier time rationalizing bad acts.
Employees naturally become well educated on the inner workings of a company. They analyze portions of the company’s business process day after day. They know where the gaps and weaknesses are. They often know what will be reviewed by management and what will not. They are so close to their work that they are able to devise methods for concealing fraud. They see the details of their work each day and become intimately familiar with their part of the business. It is not difficult to find a way to exploit the system.
The fact that fraud is easy to commit is no excuse for employees to scam their employers. But executives and managers must become aware of the potential for fraud and must acknowledge the risk of fraud and the ease with which it may be committed.