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ACFE 2018 Report to the Nations Reveals Global Insights on Occupational Fraud

04.26.2018

Occupational fraud poses a threat to organizations of all sizes. The biannual Report to the Nations released by the Association of Certified Fraud Examiners for 2018 offers a comprehensive look at occupational fraud cases from around the world. It also serves as a reminder for organizations of all types and sizes about the importance of being proactive in preventing fraud.

This year’s report reveals important information about occupational fraud including the cost of fraud, fraud schemes, how fraud is committed and detected, red flags and the characteristics of the people who commit fraud, and the impact on victim organizations.

Key findings from the report include:

  • Asset misappropriations (when an employee steals or misuses the employing organization’s resources) were the most common form of occupational fraud, occurring in 89 percent of cases with a median loss of $114,000.
  • Financial statement fraud was the least common, but most costly fraud scheme with a median loss of $800,000.
  • The median duration of fraud schemes was 16 months.
  • The leading methods of detection of occupational fraud were tips (40 percent), internal audit (15 percent) and management reviews (13 percent).
  • Internal control weaknesses accounted for nearly half of all fraud cases.
  • Organizations that implanted anti-fraud controls realized lower fraud losses.
  • While there is a fraud risk regardless of the size of your organization, the study revealed that smaller organizations (those with less than 100 employees) experienced both the greatest percentage of fraud cases and suffered the largest median loss.
  • Some of the most common industries impacted by occupational fraud include: banking and financial services, manufacturing, public sector, health care, retail, insurance and construction.
  • Organizations employing active detection methods suffered from a lower median loss from fraud.
  • Data monitoring/analysis and surprise audits were correlated with the largest reduction in fraud loss.

For more details on the findings, downloaded a copy of the ACFE report here.

To discuss fraud prevention or establishing a fraud risk management program in your organization, submit the form above to schedule a meeting with Ron Steinkamp.

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