ACFE Estimates U.S. Organizations Lose 7 Percent of Revenues to Fraud

U.S. organizations lose an estimated seven percent of their annual revenues to fraud, according to a survey of Certified Fraud Examiners who investigated cases between January 2006 and February 2008. The Association of Certified Fraud Examiners (ACFE) published the results of the survey in its highly-anticipated 2008 Report to the Nation on Occupational Fraud & Abuse.


The Report also found that:

· Fraud schemes tend to be extremely costly. The median loss caused by the occupational frauds in this study was $175,000. More than one-quarter of frauds involved losses of at least $1 million.

· Schemes frequently continue for years before they are detected. The typical fraud in our study lasted two years from the time it began until the time it was caught by the victim organization.

· Frauds were most often committed by the accounting department or upper management, and most fraudsters were first-time offenders. Only seven percent of fraud perpetrators in the study had prior convictions and only 12 percent had been previously terminated by an employer for fraud-related conduct.

· Occupational frauds are much more likely to be detected by a tip than by audits, controls or other means.

· Small businesses are especially vulnerable to occupational fraud.

· Seventy-eight percent of victim organizations modified their anti-fraud controls after discovering that they had been defrauded.

The Report also details findings such as how organizations were impacted based upon industry, how the implementation of anti-fraud controls affected exposure to fraud, and the most common behavioral traits observed among fraud perpetrators.

Source: Elite Pro