From AI-generated resumes to AI-assisted job interviews to completely fake job applicants, this technology is raising new concerns among the human resources industry about the ethical and legal implications of AI in the hiring process. Now, new data highlights another area where AI fraud can be rampant: business expense reports.
A new study from travel and expense management company Emburse, based on a survey of 2,000 employees in the US and UK, found that 4 in 10 US-based employees have used AI to create fake receipts on business expense reports. Nearly 20% said AI-generated content was completely fabricated, and about 15% said AI was used to increase expense prices. Meanwhile, 6% used AI to replace lost receipts with actual expenses.
Michelle Shepherd, chief revenue officer at Embers, noted in a blog post about the study how artificial intelligence has dramatically changed the world of expense fraud. This technology allows you to create realistic content in just seconds, removing historic “barriers to entry.”
Before AI, she writes, “employees could submit questionable claims here and there, but creating completely fabricated documents that would stand up to scrutiny required a level of sophistication that few people possessed.”
Emburse’s report suggests that fraud detection processes need to be modernized for an AI-powered world. In particular, Shepherd wrote, the system must detect fabricated content, identify unusual reimbursement patterns, and monitor disparate spending across departments and vendors.
“As AI becomes more available, organizations will need intelligent controls as well,” she says.
Shepherd encourages leaders to consider context when developing a more modern approach to expense fraud. Financial distress, exacerbated by reimbursement frictions, may prompt employees to commit fraud.
Ember’s data shows nearly a quarter of respondents admit to making personal purchases and trying to pass them off as business expenses, a move Shepherd calls “revenge spending.” Of the employees who did this, about three-quarters said they were worried about their personal finances, and more than half of U.S. workers were hit by overdraft fees and credit card interest while waiting for repayment from their employers.
“Frustration can become a risk factor when employees repeatedly pay upfront business costs, absorb the financial impact, and wait long periods for reimbursement,” she says. “In other words, preventing fraud is not just about detection, but also about reducing the conditions that make it more likely for violations to occur in the first place.”
