In 2018, the Association of Certified Fraud Examiners (ACFE) released its 2018 Report to the Nations based on the ACFE 2017 Global Fraud Survey, a survey conducted by members of the ACFE from July 2017 through October 2017. As part of the survey, members were asked to provide information on the largest fraud case they were involved in from January 2016 through the survey date. The information from this survey was compiled into a variety of statistics to gain an understanding of the impact that occupational fraud and abuse has on businesses.
The survey and results are published by the ACFE every two years and provide valuable insights into fraud in the United States and internationally. The report defines occupational fraud and abuse as: "the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets." This is a broad definition meant to encompass a wide variety of cases and is intended to be as comprehensive as possible.
Key Findings from the 2018 Report
- The median loss from occupational fraud and abuse in the United States was $108,000.
- The median loss from occupational fraud and abuse as a percentage of revenue was 5%.
- The median length of the reported instances of occupational fraud and abuse was 16 months from the start to the point in time it was detected.
- For 37% of the instances of occupational fraud and abuse in the United States, the most frequent method of detection was a tip from an employee, customer, or vendor.
- Private companies had the highest overall losses recorded.
- 53% of the impacted companies were not able to recover any funds related to the occupational fraud and abuse.
- The most common occupational fraud and abuse in the United States was a corruption-based scheme, followed by a billing scheme.
The results of the survey are an interesting look into occupational fraud and abuse, but how can the results be translated into action for companies? First, the survey and report highlight the overall substantial impact occupational fraud and abuse can have on a business. Making owners and managers aware of the potential is the first step in developing an effective occupational fraud and abuse prevention and detection program.
Second, the survey provides a partial look at what methods of prevention are the most effective, as well as highlights the methods of detection. With this knowledge, owners and management can work to develop effective prevention and detection programs that will provide the biggest bang for their buck. Any prevention and detection program will never be 100% effective, but by identifying what are the most effective methods of prevention and detection, a business can devote their resources to developing programs around those, rather than investing significant amounts of time and money in methods that will produce minimal results.
If you want to know more about the survey and report, or if you want to discuss what you can do to develop a more robust prevention and detection program, contact one of Boulay’s fraud experts at 952-893-9320 or learnmore@BoulayGroup.com.
File Download: Fraud and Occupational Abuse Statistics