Smaller organizations suffer greatest median losses
The Association of Certified Fraud Examiners (ACFE) has released the newest edition of its fraud report providing a global view into occupational fraud.
The ACFE's 2012 Report to the Nations on Occupational Fraud and Abuse is based on data compiled from a study of 1,388 cases of occupational fraud that occurred worldwide between January 2010 and December 2011. All information was provided by the Certified Fraud Examiners who investigated those cases in 94 nations.
The 2010 edition marked the first time the study included cases from countries outside the United States. The international expansion provides an enhanced view into the severity and impact of these crimes on a global scale, allowing for comparison of the anti-fraud measures taken by organizations worldwide.
Key findings in the 2012 report include:
- Survey participants estimated that the typical organization loses 5% of its revenues to fraud each year.
- The median loss caused by the occupational fraud cases was $140,000. More than one-fifth of these cases lasted a median of 18 months before being detected.
- Occupational fraud is more likely to be detected by an internal tip than by any other method.
- Smaller organizations suffered the largest median losses.
- The industries most commonly victimized were the banking and financial services, government and public administration, and manufacturing sectors.
- Nearly half of victim organizations do not recover any losses that they suffer via fraud.
- Perpetrators with higher levels of authority tend to cause much larger losses.
- The vast majority (77%) of all frauds in the study were committed by individuals working in one of six departments: accounting, operations, sales, executive/upper management, customer service and purchasing.
- Most occupational fraudsters are first-time offenders with clean employment histories.
- In 81% of cases, the fraudster displayed one or more behavioral red flags that are often associated with fraudulent conduct.
You can request a free copy
of the report via the ACFE website.