LOS ANGELES--(BUSINESS WIRE)--Age, job level and reporting procedures all correlate strongly with the propensity to commit expense fraud, according to data from Chrome River Technologies, Inc., a global leader in expense and invoice automation solutions. Based on a survey of more than 1,200 business travelers in the U.S., U.K. and Australia, conducted in April and May 2018, expense fraud could potentially cost American organizations $1.9 billion per year.
The survey’s results also provide insights intended to help employers curb the financial impact of these unethical practices. According to the Association of Certified Fraud Examiners (ACFE), expense reimbursement fraud comprises 17 percent of all business fraud. The ACFE notes that smaller businesses, which generally have fewer internal controls, typically suffer double the losses of larger businesses.
Chrome River’s survey shows expense fraud is more likely to be committed by:
- Younger employees: 82.9 percent of expense fraud was committed by those under the age of 44
- Manager-level and white-collar, non-managerial staff: 58.1 percent of those who said they cheated were mid-level employees, while VPs and SVPs had the lowest fraud rate at a combined 6.2 percent
- Males: Not only were males nearly twice as likely to commit expense fraud, they were more than four times more likely to pad an expense report by $1,000
- Companies using manual reporting procedures: Employees who submit expenses using hard-copy receipts and spreadsheets are more than twice as likely to commit fraud than employees using automated expense management solutions
Other takeaways from the survey include:
- Over one-third of those admitting fraud reported padding each report by amounts ranging from $100 to $499, with males doing so at a rate 60.5 percent higher than females
- Conversely, females were 30.8 percent more likely than men to misreport amounts under $100
- Males were 62.2 percent more likely than females to believe they wouldn’t get caught falsifying expenses
- One-quarter of respondents reported they have been caught committing expense fraud
- Over 75 percent of respondents caught for expense fraud said a warning was the most serious consequence
- Males reported receiving formal warnings at a rate 31.6 percent higher than females
“Most people are inherently honest and they don’t intend to defraud their employer of huge amounts of money. More often, they’re just committing small acts that they don’t even view as ‘fraud.’ And they do it because it’s possible and they don't think anyone will notice,” commented Chrome River Co-founder and CEO Alan Rich. “The best thing a company can do to protect itself is make it easier for employees to do the right thing, such as implementing an automated expense management solution which can, for example, alert employees if they are trying to submit the receipt twice. This type of gentle reminder can often be all that’s needed for employees to remain honest throughout the expense submission process.”
The survey was conducted among 1,216 self-identified frequent and semi-frequent business travelers, based in the U.S., U.K. and Australia. They survey was conducted online by SurveyMonkey from April 25 to May 1, 2018. The figure for the total estimated expense fraud was taken from respondents’ self-reported answers, combined with the total number of frequent or semi-frequent business travelers in the United States.
About Chrome River
Chrome River Technologies, Inc. lets business flow for some of the world’s largest and most-respected global organizations. Our powerful, yet easy-to-use SaaS expense management and invoice automation solutions deliver the most modern global and mobile experience in the marketplace. Our highly-configurable business rules engine supports your evolving compliance and reporting requirements in today's ever-changing business climate. Chrome River is rated as a Leader in expense management by analyst firm IDC, and is loved by CFOs, CIOs, AP teams, travel managers and business travelers alike.
To find out why Chrome River is trusted by more than 2 million users at more than 750 organizations worldwide, contact us at +1 888 781 0088, or visit us at www.chromeriver.com, or on Facebook, Twitter and LinkedIn.