You may be a fraudster without your knowledge! Find out.

You may not know whether you are fraudster or not until you know the definition of a fraud. Fraud relates to wrongful or immoral or criminal activities intended to result in financial or personal gain to the fraudsters. The gain may not necessarily be in cash as it can take many forms. For example using your position for personal gain is immoral in nature.  There are many examples of situations where someone may be a fraudster or may be involved in an activity which will lead to a fraud and I will try to explain the common situations in a series of articles. This article will cover the following situations;

Are you as a boss setting a right moral tone at the top?

Are you doing the right things even if no one is looking at you? Is your moral behaviour upright during the workings and non-working day? There are so many wrong things some bosses are involved in without caring about their impact on the people they lead. They come in late, spend a lot of time reading newspapers, they receive so many personal guests, they misuse organisation’s resources, they award contracts unfairly and they in summary take unfair advantage of their position. Remember your followers are watching you when you doing all wrong things. Some for sure will chose to follow the examples set by the boss. They will start doing what the boss is doing. I am sure you had a saying that the fish rots from the head. As a boss you will set or destroy the moral standards of your organisation. You have to set a clear moral tone at the top if you have to cultivate a morally correct culture in your organisation.

Cheating your employer on time

Your contract of employment specifies a given number hours of effective service to your employer. Are rendering effective service at least equal to the number of hours you are contracted to serve.  Do not in life you face so many challenges including reporting late to and leaving the office early for personal reasons. For example you may be caught in a traffic jam because you did not start your journey early enough. You are late or leave early because of dropping and picking your kids from school. You may not report to work because your name has lost someone and so on and so on. It is also common for some staff to come in the office a bit late  and then they embark on wasting  additional time greeting each and every fellow staff, reading news, telling their  colleagues of stories why they are late.  The advent of internet has made it worse as staff waste more time chatting on social media. Are doing all the above at the expense of your employer? If yes then you are cheating your employer? Your employer is the organisation you are working for and not individuals in the organisation. The individuals could just be behaving like you! Always remember to compensate your employer for the time lost through working extra effective hours in case you have a genuine reason to be away from work apart of your annual leave.  You must also bear in your mind that you are setting a negative tone for your fellow colleagues in case your behaviour goes on uncorrected as there is high possibility that others will be infected with immoral behaviour. You are therefore cheating your employer if you do not render effective service equal to your contracted time.  I am using the word effective as there are staff that report in the office and do their private work. Your employer is not merely paying for your presence in the office but for effective service.

High Loan burden

I know of some people who do not care about their extent of borrowing provided the sources of borrowing are available. At the end of the day a situation will arise when the debt burden becomes too big for the borrower to service. Are you morally upright when you take on new loans without caring how you will service them? I trust not. Your loans should be supported by cash flows from reliable sources of income and should be adequately secured with clean securities.  Are the cash flow projections and the management accounts you are giving to the lender reliable or have been produced through a creative accounting process? There are some people earning a living through creating cash flows and management accounts which have little to do with what is on the ground!

Living beyond your means

Do you live within your qualifying means?  We are often aware of some people who do not live within the qualifying means and yet we do nothing about it.  Qualifying means refers to all those sources of income where you are not taking unfair advantage of your position to derive some hidden income to the disadvantage of your employer. Do you receive any commission payments from your customers and suppliers for service rendered to them?  Is any gift given to you by customers and suppliers disclosed to your organisation? Do you use your employer’s time to earn extra income from your private business? Some body living beyond his or her means on temporary basis may necessarily be fraudulent but the fraud red flag is up when the behaviour becomes a habit.  I am of the view it rare for someone to live beyond his or her means as a habit and still remain morally upright.

Do you gamble?

Are you involved in gambling or any speculation as habit for quick win?   It is rare to succeed in life through quick wins? Success through chance is quite rare. If your goal is to get rich overnight through gambling or specialisations, you are most likely on the wrong side of moral scale.  Success is a result of hard work focused on your morally right mission.

How transparent are you?

Are you clear in your business and financial activities with customers, suppliers and fellow staff?  Do the words you use in your business dealing carry their normal meanings? Always avoid unfair transactions which people may lead people to lose trust in you.  For example are you using your personal bank account to do business of your organisation with third parties? Are you signing supply contracts with only your close friends and relatives?


There is often a tendency of taking certain behaviour or transactions for example receiving commissions on the work you are employed to do as normal when in fact the behaviour is immoral or illegal in nature. The way you behave in business or wherever contributes to the moral culture of your organisation. Take time to do self- examination with the aim of establishing where you fall on moral scale.


John Muhaise Bikalemesa

Director: Big Drum Advisory Services Limited