Analyzing Audit Risk and Evaluating the Control Environment: Is Gender a Missing Variable in Detecting Fraud?

• In Event: Fraud

Abstract

This paper examines gender as a dimension of white-collar offenders to assist auditors in risk analysis, fraud detection, and control environment evaluation. Employing a database obtained from the Association of Certified Fraud Examiners, we examine 4,673 fraud cases from 2001 – 2011 to determine gender distinctions in the specific types of white-collar crimes committed and the rate at which these crimes are committed. The results from our study suggest that, in their areas of opportunity, women are twice as likely as men to commit crimes of material asset misappropriation when controlling for age, position, compensation, and education levels. We also construct profiles of female fraudsters for each type of white-collar offense: financial-statement fraud, corruption, and asset misappropriation. The profiles developed in the study distinguish female white-collar criminals from their male counterparts in terms of compensation levels, organizational positions and departments, as well as behavioral warning signs (red flags).

Author

• Theresa Hilliard, West Virginia University