Men are the biggest offenders of expense report fraud by a wide margin, according to the latest AppZen proprietary data from our Expense Report Audit platform. Of all expense fraud detected by AppZen, only 12.3% were submitted by women, while 87.7% were submitted by men.
What causes the gender gap? Although it’s impossible to nail down the exact reasons, there are a few possible explanations.
One explanation is that there are slightly fewer women than men in the workplace worldwide. The Pew Research Center analyzed the labor force data of over 114 nations between 2010 and 2016. Across all these countries, the share of women in the workforce is 45.4%. Since there are fewer women in the workplace, women have less opportunity in general to commit expense report fraud.
So, to norm for the disparity in the sheer quantity of women in the workplace, we went ahead and did the math: Even if the workplace were split 50/50 in terms of gender, still only 13.54% of expense misconduct would be committed by women. Accordingly, the “fewer women in the workplace” hypothesis can be discarded.
There are also fewer women in C-level positions; as we covered in a previous blog post, holders of these jobs are seven times more likely to commit expense report misconduct and fraud than the average employee. C-level executives that commit expense fraud often feel entitled; they might believe that internal policies don’t apply to them and won’t be enforced if they are caught.
According to the U.S. Bureau of Labor Statistics, only 28% of C-level positions are held by women. So, again, norming for the math: in a perfect world in which the entire office AND the C-suite within it were split 50-50 across genders, women would still only commit 28.12% of the expense report misconduct. Accordingly, the “lack of female power hypothesis” can also be removed.
The large disparity may just come down to gender differences in risk-taking behavior. In a 2004 experiment, researchers designed a computer game involving gambling and risk and found significant differences in the way men and women perceived probabilities and outcomes of their actions. The men in the study took greater risks than women did, especially when there were larger rewards. Women took fewer risks and showed a stronger aversion to losses. It’s possible that this difference in perceived risk impacts the workplace as well, and women are less likely to fudge their expenses as a result.
Combating expense report misuse and fraud isn’t easy, but AppZen can help. Using machine learning and natural language processing, our AI scans every available reporting database in seconds to cross-check line items and flag instances of employee fraud. This straightforward evolution could save your company millions in T&E spend every year.
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Josephine McCann is a Senior Marketing Associate at AppZen, the world’s leading solution for automated expense report audits that leverages artificial intelligence to audit 100% of expense reports, invoices and contacts in seconds.
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