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Kehinde Kassim and Co.
Why Do Employees Commit Fraud?
Credit: Google

Business owners need to understand what motivates employees to commit fraud.

This way they can better assess risk and implement appropriate preventive and detective measures.

We must always remember that from the CEO to the rank-and-file employee, almost none of them took their jobs for the purpose of committing fraud.

This forces the question, HOW DO GOOD PEOPLE GO BAD?

There are two separate but related theories as to why employees commit fraud. The first is based on a 20-year-old Hollinger and Clark study of 12,000 employees in the workforce. The second theory is related to financial pressures. From these theories we generate our;



Hollinger and Clark concluded that lack of motivation was the most common reason employees committed fraud. The more dissatisfied the employee, the more likely he or she was to engage in criminal behavior. It has been described by criminologist as “wages in kind.”

We all have a sense of our own worth; if we believe we are not being fairly treated or adequately compensated, statistically we are at much higher risk of trying to balance the scales.


In the late 1940s, criminologist Donald R. Cressey interviewed nearly 200 incarcerated embezzlers, including convicted executives. He found that a great majority committed fraud to meet their financial obligations.

In other to meet up with their increasing wants, lifestyle and to settle various financial obligations accrued over the years, many employees are forcing into fraudulent activities and criminal behaviors.

Additionally employees faced with embarrassing financial difficulties pose a significant problem.

Why Do Employees Commit Fraud?
Credit: Google


Cressey also observed that two other factors had to be present for employees to commit fraud. They must perceive an opportunity to commit and conceal their crimes, and be able to rationalize their offenses as something other than criminal activity.

Many Employees including top officers are easily influenced into fraud when an opportunity becomes available for them to ‘take’ without being noticed or better still rationalizing their ‘taking’ to make it legal.


Another very potent reason for office space fraud is pressure. “Everybody is doing it makes it legal”. Many employees are lured into office fraud because it has become an accepted norm within the company environment. This is mostly found in government owned companies.

These Employees after leaving their former corrupt environment already have this habit engraved in them and are most likely to start the culture when they get to other firms.


This is the father of all reasons and maybe the reason it comes last. The need to get everything for one’s self. This is a major factor to fraud. Many employees are greedy. Maybe coming from a previous company environment or just the societal norms generally.

Many executives and employers all want an extra piece of the cake to themselves. Although wanting isn’t necessarily a bad thing, but wanting without putting the necessarily amount of work intended is the bedrock to fraud.


All crimes are a combination of motive and opportunity. The opportunity to commit fraud is typically addressed through internal controls. If the proper checks and balances exist, it is more difficult (though still not impossible) to defraud an organization.

To deter opportunity, divide responsibility. If one person controls both the books and the assets, the ability to commit fraud is limited only by that person’s imagination. But if another employee shares a task, it is less likely a perpetrator can succeed.

Furthermore, if an employee needs help to defraud an organization, opportunity is greatly reduced. It is an easier task to commit a fraud by yourself, but quite harder when you have to ask someone to aid in your scheme.

Most importantly, hiring able auditor to occasionally audit the financial statement would reveal any discrepancies. The auditor pays attention to what goes on outside the books.

So while you’re looking at the numbers, keep one eye and both ears open for disgruntled or financially strapped employees, It may mean all the difference in detecting fraud.

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4 Replies to “Why Do Employees Commit Fraud?”

  1. Olumide says:

    This is very lovely piece.

  2. […] Read more on Why employees commit fraud […]

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