If you have a boss with a wide face and he is going on a summer holiday, there could be stirring times ahead when he is away. According to Ernst & Young (E&Y), a global leader in assurance, tax, transaction and advisory services, its fraud-related workload peaks during summer when corporate types tend to go on leave. That’s the time whistleblowers are in action.

“We see a clear increase in fraud detection where companies enforce a compulsory two-week break over summer,” says E&Y. “Perpetrators are away and not able to cover their tracks easily. Frauds, such as accounts manipulation that are covered up in the course of the year, are often spotted when colleagues take over and notice something is not quite right.”

It is difficult at other times because the fraudster is often an organisational ideal. “The profile of a typical fraudster is a long-serving, trusted employee, who works long hours and is reluctant to take his annual leave. Without doubt, one of the simple and cost-effective anti-fraud measures is to ensure employees take at least two consecutive weeks holiday.”

Everybody is into surveys of fraud these days. The E&Y Global Fraud Survey is now into its 11th edition. It charts some BRIC (Brazil, Russia, India and China) trends. Among them:

Effective coordination between compliance, internal audit and legal: India 96%, Brazil 92%, China 88%, Russia 82%.

Confidence in internal audit: India 94%, Brazil 92%, China 80%, Russia 62%.

Availability of hotlines: Brazil 88%, India 74%, China 62%, Russia 30%.

Maintenance of a fraud database: Brazil 93%, India 64%, China 39%, Russia 26%.

Embedded processes to promote adherence to international anti-corruption legislation: Brazil 92%, India 66%, China 56%, Russia 28%.

Others climbing on to the fraud bandwagon include KPMG which in July, released numbers showing that from January to June, losses due to fraud in the UK alone reached £1.1 billion. In the same period in 2010 it was £609 million. Almost half of this was in the private sector.

A Deloitte survey brings in the boss element. This study shows that one of the major causes of fraud is “disgruntled employees and management”. This is likely to acquire No. 1 status in the future.

What can you do about fraud? A Guide to Preventing Workplace Fraud, prepared by the Chubb Group of Insurance Companies and KPMG Forensic, has some recommendations:

• Screen employee backgrounds.

• Take note of customer feedback.

• Have effective oversight systems.

• Insist that all employees go on vacation.

• Have a whistleblower policy,

• Create fraud awareness programmes.

• Create fraud deterrence programmes.

• Have a zero tolerance policy.

The biggest problem is, of course, that the fraudster is very often the last person you would expect to be lining his pockets. Did anyone suspect B. Ramalinga Raju before he actually confessed? A Businessweek article gives the following pointers. Look for:

• An employee whose lifestyle does not match his or her income.

• Managers or supervisors with dominant or controlling personalities who refuse to delegate work or take time off.

• Employees who work excessively and refuse assistance.

• Employees who go to extremes in their consideration for fellow workers.

• Employees who work excessively and still produce poor accounting records.

Does that sound familiar? There are such people in all organisations.

Incidentally, what about the “wide face” mentioned at the beginning of this article and how does it lend itself to fraud? That’s another story. According to a study by Professor Michael Haselhuhn of the University of Wisconsin-Milwaukee, men with wide faces are more likely to lie and cheat than narrow-faced men. “Men with larger facial ratios feel more powerful, and this sense of power then leads them to act unethically,” says the good professor. An Independent headline calls it “the bare-faced truth about big fat liars”. “They make better businessmen,” adds Haselhuhn.

WHERE FRAUDSTERS FLY

Has your organisation experienced a significant fraud in the past two years? (%)

• Global 16

• Western Europe 21

• Latin America 21

• Middle East and Africa 18

• Central and Eastern Europe 14

• Japan 12

• North America 9

• Far East 8

• Australia 8

Source: 11th Global Fraud Survey, Ernst & Young.

Note: India is included under Middle East and Africa