Embezzlement is not just a problem for large enterprises – businesses with fewer than 150 employees were 10 times more likely to be victimized by fraud than those with 250-500 employees, according to the 2016 Hiscox Embezzlement Study.

The financial services industry is hard hit by embezzlement cases; 17 percent of employee theft in organizations with fewer than 500 employees occurs in this sector. For professional services businesses, the median loss as a result of employee theft was highest -- $615,101.

Perpetrators are often well-liked and smart, so how do good employees turn bad? According to the report, there are four driving factors:

•     Pressure: Often resulting from gambling or investment losses, medical expenses or significant debt, an employee is put into a situation that seemingly can only be relieved by acquiring more funds.

•     Opportunity: Senior, trusted employees may be more likely to have access to secure files and controls, providing more opportunity to cover up crimes.

•     Capability: Embezzlers often have skills and knowledge about fraud.

•     Rationalization: Perpetrators convince themselves that they are providing for their family, feel underpaid or ill-treat, or think others are stealing also.

The report recommends the following best practices for fraud prevention:

•      Never give one person end-to-end responsibility for accounting or accounts payable.

•      Pay attention to employee lifestyles.

•      Conduct lawful background checks.

•      Educate employees about fraud.

•      Promote a culture of trustworthiness and integrity.