Embezzlement Red Flags —Warning Signs of Potential Trouble

Embezzlement red flags can take many forms. Unfortunately, a number of managers either ignore or let pass a variety of embezzlement red flags that should have caused them to look closer to see if an internal fraud is taking place. Some of the more commonly missed embezzlement red flags include:

Ten common embezzlement red flags that should arouse suspicion:

  1. Lifestyle issues/living beyond means
  2. Single employee handling multiple tasks
  3. Excessive debt or family pressures
  4. Questionable or excessive adjustments
  5. Never taking vacations or time off
  6. Heavy gambler and frequently visiting casinos
  7. Same person writing checks also the authorized signature
  8. Billing and payment complaints
  9. Credit-card charges not monitored
  10. Employee rejects offered promotion, upgrade, or transfer

Embezzlement red flags are too numerous to mention in this article. Many more can be found throughout the Internet or in this book, Business Fraud: From Trust to Betrayal.

It is also important to understand, that the presence of embezzlement red flags do not indicate that some dishonest act is underway. There is always the possibility that a legitimate explanation exists. However, embezzlement red flags strongly indicate a situation that should receive very special and prompt attention.

When confronted with questionable or suspicious situations, a fair number of leaders choose to ignore them. They are either “too busy” or too trusting. What will you do?

While the above ten embezzlement red flags help to elevate management awareness, you are encouraged to read Business Fraud: From Trust to Betrayal to learn many more embezzlement red flags along with numerous things you can do to prevent embezzlement.