Friday, August 19, 2022


OPINION: Fraud, is there an end to it?

Opportunity is one of the reasons that motivate people and professions to commit fraud, says Mohammed Anwar Al Balushi.

Mohammed Anwar Al Balushi

Sunday, June 12, 2022

MUSCAT: Fraud can happen anywhere, at any time, and no one is immune. In this case, what should the organizations do? First, one must understand the reasons for the fraud. Second, we need to know the behaviour of the victim, and third, we need to be aware of the techniques for reducing such fraud risks.  

According to the ACFE occupational report to the nation of 2022, there were 2,111 fraud cases from 133 countries and the estimated loss was $3.6 billion as investigated between January 2020 and September 2021. Is not this a huge amount? It has been reported by ACFE that, the organizations lose 5% of their revenue/profit. It means if the company makes a profit of $100 million, it will lose $5 million on fraud.

The report has shown there were 675 cases only from USA and Canada out of 2,111 cases, which means 36%.  Can Fraud Examiners provide techniques to avoid such fraud risks? How do organizations manage such fraud risks?

It is indeed interesting and a great thing that fraud like this has been brought to the public’s attention by the CFEs worldwide. Fraudsters may have their own strategies to commit fraud that make it hard for fraud examiners to spot. In order to win this game, fraudsters and fraud examiners use what kinds of strategies?

Opportunity is one of the reasons that motivate people and professions to commit fraud. “Due to weak control and the lack of knowledge on my staff’s part, I then became malicious and committed fraud by authorizing loans to customer accounts and withdrawing them by forging the customer’s signature.”, one of the branch managers of the finance company said it after investigation.

“In the midst of a time crunch, I was unable to repay the borrowed funds from different individuals, which is why I stole cash from the vault.”, said one of the bank tellers. Motivation fraud of this type is known as pressure.

“For the money, I had to swindle and tell lies because my boss did the same and made money,” said one of the secretaries of the company. Fraud motivations of this type are rationalizations.  

One of the reasons is the lack of good education, training, and knowledge transfer in the workplace and in society. Another reason is that people like to be rich in a short amount of time, so fraud is a good strategy for them. The victims should stop being naive, they should be savvy to avoid being cheated and taken advantage of.