SFO - Serious Fraud Office

Is it fraud? Ways to recognise it

Sometimes the way people behave might suggest that they are committing a fraud.  These signs are called 'red flags'. Although by themselves they may not be any cause for concern, a few of these together might be enough to alert you that something isn't quite right..

'Red Flags'

  • Significant changes in behaviour that you've noticed
  • They have large personal debts or financial losses, and a desire for personal gain
  • Audit findings deemed to be errors or irregularities
  • Transactions taking place that were at an odd time, odd frequency, unusual amount or to odd recipients
  • Internal controls that are not enforced, or often compromised by higher authorities
  • Discrepancies in accounting records and unexplained items on reconciliations
  • Missing documents, or only photocopied documents available
  • Inconsistent, vague or implausible responses arising from inquiries
  • Unusual discrepancies between the client's records and confirmation replies
  • Missing inventory or physical assets
  • Excessive voids or credits
  • Common names or addresses of payees or customers
  • Alterations on documents (e.g. back dating)
  • Duplications (e.g. duplicate payments)
  • Collusion among employees, where there is little or no supervision
  • One employee has control of a process from start to finish with no segregation of duties