Ethical issues
While there are no hard figures on the costs of travel expense fraud to American companies and organizations, estimates range as high as billions of dollars a year. A report last year by the Inc. Business Owners Council, an organization of family business owners, found that business fraud, over all, increased by two-thirds from 2006 to 2009. The Association of Certified Fraud Examiners reported earlier this year that the typical company lost 5 percent of its annual revenue to employee fraud and abuse and 15 percent of that was tied to expense reporting fraud.
“For many companies, it’s like being nibbled away by little piranhas rather than being eaten by a big shark,” Mr. Verver said.
Fraud schemes run the gamut from the minor to the extreme, the accounting experts said. Falsified taxi receipts are a favorite, thanks in part to the stacks of blank receipts drivers hand out in many cities. So, too, are faked business trip expenses.
“Let’s say I’m an executive and don’t have to fly coach,” Mr. Bechara said. “I’ll buy a first-class ticket. Then I’ll cash it in for two coach tickets and take my wife or my girlfriend with me. When I take them to dinner, if the bill is too high, I’ll put down that I took a customer.”