Trustmi Talks

Why are Finance Teams the Ultimate Target for Fraud?

The Trustketeer
4 min

Bad actors and fraudsters can attack anyone at any organization—no one is immune. In a typical attack, these criminals target multiple people at the same company to find the weakest link. Perhaps this weak link is a junior person, who doesn’t question an unusual request from an impersonated senior executive. Or maybe it’s an experienced executive, who doesn’t notice the spoofed domain on the email they received from an authentic-looking vendor. In the end, the finance team is the most popular and attractive team for a cyberattack.  Here are some of the reasons why they are such juicy targets.

Where There’s Money, There’s Mischief  

The finance team controls the money at their organization and is responsible for everything related to the financial health of the business. Simply put, that’s where the money is. The easiest way to steal money is to directly attack the team that is responsible for all related functions.

Beneath the umbrella responsibility of managing and overseeing financial processes and decisions, there are a series of sub-functions that add complexity to controlling income and expenditure. These functions are all interdependent and must fit together without causing disruptions to any processes. Some of the several functions and activities include but are not limited to:  

  • Accounting, bookkeeping, and maintaining an accurate history of financial records
  • Managing cash flow and preparing income statements  
  • Analyzing financial activity and reporting it to Leadership
  • Managing, preparing, forecasting and implementing budgets
  • Establishing internal controls and enforcing compliance
  • Auditing and adhering to financial regulations
  • Arguably there’s a lot more that falls under the purview of the finance team. What matters here is that the finance team owns everything that has a direct impact on the company’s pecuniary responsibilities and financial health.  Because the responsibilities of the finance team are so broad, there are typically several people who are juicy targets for bad actors. Fraudsters won’t just target one function within finance. They’ll search around and poke holes across all the functions to find that weak link and break in. Attacking a function that doesn't have direct access to company funds puts the threat actors one step removed from the money.  

    Always Stretched Thin

    As businesses grow, so does the number of invoices they receive that require payment. Just because the workload increases do not mean the CFO is hiring more folks onto the accounts payable team to handle the influx of additional work. Because budgets are always shrinking, the increased volume of work rarely leads to a proportional increase in staff.  A staff of 5 might be responsible for a certain function, but if their workload doubles that does not automatically mean the team will grow to 10 people.  

    Budgets have been contracting in recent years and internal teams across the board are pressured to do more with less. Paying vendors quickly has also become a greater priority in recent years, where accounts payable teams want to clear their queue to keep up with the increased workloads.

    More work means more fatigue and burn out, and human error. With teams trying to work quickly to keep up with the increasing volume of payments, they end up risking opportunities to make errors which can promptly pen security gaps that bad actors can exploit.

    Legacy Systems and Manual Work

    Finance teams historically have not always been the most technologically savvy teams. Luckily this should change given the new structure of the CPA Exam that is now more heavily weighted toward tech skills.

    Legacy systems leave a lot to be desired. They aren’t fully automated usually and they don’t typically easily integrate with other newer systems. Teams still end up using spreadsheets because of the limitations of these systems which leads to manual data entry and maintenance. Manual work leads to errors. Errors open businesses up to security gaps that fraudsters can exploit.

    External Vendor Collaboration

    Finance teams frequently interact with external vendors, managing payments, invoices, and contracts. This collaboration, while essential for business operations, introduces additional vulnerabilities that fraudsters can exploit. Understanding these risks and implementing protective measures is crucial for safeguarding financial transactions.

    To sum up, Finance teams are prime targets for fraud due to their direct access to a company’s financial resources and sensitive information. These teams manage substantial amounts of money, process high-value transactions, and handle confidential data, making them attractive to fraudsters seeking significant financial gain. Additionally, finance professionals often have the authority to authorize payments and manipulate financial records, which can be exploited if safeguards are not in place. The complexity and volume of financial operations also create opportunities for sophisticated schemes to go unnoticed. As a result, finance teams must be vigilant and implement robust internal controls to mitigate the risk of fraud.