Eighty-seven percent of finance executives admitted that they have ignored “a small expense, reimbursement, or claim they believed was fraudulent,” Medius, a technology accounts payable firm, said in a survey released today.
The survey, based on responses from 2,386 executives in charge of finances at companies in the U.S., the U.K., Sweden and France with more than 50 employees, called the finding an illustration of how “fraud is being normalized” in corporate finances.
Although frauds involving large amounts of money get the attention, fraudulent payments for small amounts add up and often cost companies thousands of dollars, said Chris Wilmot, chief financial officer at Medius, a global company with U.S. offices in Jacksonville, Fla.
“Costly deepfake fraud gets all the headlines,” Wilmot said in a statement. “But while finance professionals keep a sharp eye out for these scams, hundreds of thousands of dollars are slipping out the back door through shallowfake fraud. These seemingly minor ‘micro frauds’ add up to death by a thousand cuts for organizations without the controls in place to catch them.”
The increasing use of AI to handle expenses and accounts payable is making the situation worse, Medius said.
“Workplace fraud is becoming normalized within finance departments despite heightened concerns about AI-generated scams,” Medius said.
Sixty-seven percent of the executives admitted they would be likely to engage in a minor dishonest expense claim themselves if the behavior were common among coworkers, fueling the rise of what Medius calls shallowfakes, or low-value financial rule-bending, such as expense embellishment, the survey said.
“Nearly three-quarters of finance professionals believe small forms of fraud resulting in minor financial losses are already common in workplaces, while 64% said they would feel justified in committing a small dishonest financial act if they felt underpaid or undervalued,” the report said. “More than half admitted they would round up an expense or mileage claim if they believed it would go unnoticed.”
Fifty-three percent of finance professionals “call small expense exaggerations ‘acceptable’ when the dollar amount is minor,” the report said.
More companies are adopting agentic AI systems, which process workflows with little human intervention, even though a majority of executives said they do not fully trust AI, the study said. Thirty-eight percent of finance executives already have agentic AI operating within at least some financial processes, and another 50% plan to start using agentic AI in their financial processing within the next 12 months.
“Despite AI’s promises to relieve workers of menial tasks and make processes more efficient, AI is placing new pressures on finance teams. Three-quarters of respondents said AI usage has increased worker fatigue or burnout, underscoring the challenges organizations face as they adapt to rapidly changing expectations around technology, productivity and skills development,” the survey said.