Did You Know this About Fraud?…

The Association of Certified Fraud Examiners (ACFE) releases a report that summarizes information from fraud cases investigated in more than 100 countries. The 2014 report includes an analysis of 1,483 cases of occupational fraud. The following information was summarized directly from the ACFE’s 2014 Report to the Nations on Occupational Fraud and Abuse.

  • The typical organization loses 5% of revenues each year to fraud.
  • The median loss caused by fraud is $145,000.
  • The median amount of time from when a fraud begins until it is detected is 18 months.
  • Approximately 77% of frauds are committed by individuals working in one of the following seven departments: accounting, operations, sales, executive/upper management, customer service, purchasing and finance.
  • Fraud is very costly, resulting in roughly 14% of companies making full recovery of their losses.
  • Tips are consistently and by far the most common detection method, resulting in detection of over 40% of frauds.
  • Employees account for nearly half of the tips that lead to the discovery of fraud.
  • Organizations with hotlines experienced frauds that were 41% less costly, and were detected 50% more quickly than frauds in organizations without hotlines.

The ACFE keeps an electronic copy of the 2014 report available on its website, www.acfe.com, along with other good information on fraud prevention and detection.


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DISCLAIMER: This blog is provided for informational purposes only and is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant. Presentation of the information in this article does not create nor constitute an accountant-client relationship. While we use reasonable efforts to furnish accurate and up-to-date information, the evolving landscape surrounding these topics is supported by regulations or guidance that are subject to change.

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