ACFE releases latest Report to the Nations on Occupational Fraud and Abuse


ACFE News

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The ACFE states that organizations around the world lose an estimated 5 percent of their annual revenues to occupational fraud, according to the 2014 Report to the Nations on Occupational Fraud and Abuse. Applied to the estimated 2013 Gross World Product, this figure translates to a potential total fraud loss of more than US$3.5 trillion.

A copy of the Report is included with this magazine. Download a PDF at: ACFE.com/RTTN. See even more information at the new Report microsite, ACFE.com/RTTN, including interactive charts plus extra graphs and analyses. Each nonmember can request a free, printed copy of the Report here.

The report includes data compiled from 1,483 cases of fraud submitted by CFEs globally who investigated cases from January 2012 through December 2013.

Other key findings from the 80-page report include (all values in U.S. dollars):

 

  • Fraud schemes are extremely costly. The median loss caused by the occupational fraud cases in the study was $145,000. Nearly one-fourth (22 percent) of these cases caused losses of at least $1 million.
  • Schemes can continue for months or even years before they're detected. The frauds in the study lasted a median of 18 months before being caught.
  • Tips are key in detecting fraud. Occupational fraud is far more likely to be detected by a tip than by any other method. More than 40 percent of all cases were detected by a tip — with the majority of them coming from employees of the victim organization.
  • Occupational fraud is a global problem. Though some findings differ slightly from region to region, most of the trends in fraud schemes, perpetrator characteristics and anti-fraud controls are similar regardless of where the fraud occurred.
  • High-level perpetrators do the most damage. The median loss among frauds committed by owner/executives was $500,000, considerably higher than the median loss of $130,000 for frauds committed by managers and $75,000 for frauds committed by other employees.
  • Small businesses face increased risk. The smallest organizations in the study suffered disproportionally, with a median loss of $154,000 — higher than the overall median loss for fraud cases in the study ($145,000). These organizations typically employ fewer anti-fraud controls than their larger counterparts, which increases their vulnerability to fraud.




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