OUR THOUGHTS ON:

The 2016 ACFE Report on Occupational Fraud and Abuse

Business Advisors|Risk Advisory/Internal Audit

By Brian Webster

The Association of Certified Fraud Examiners (ACFE) recently published the 2016 Report to the Nations on Occupational Fraud and Abuse.  This year’s report is an analysis of 2,410 cases of occupational fraud investigated by Certified Fraud Examiners worldwide.

The 2016 Report to the Nations provides information on how occupational fraud is committed and how it is detected, along with details about the victims and perpetrators of these crimes.

The ACFE's 2016 Report to the Nations On Occupational Fraud and Abuse Key Findings

Some key findings in the report include:

  • Participants estimate that the typical organization loses 5% of its revenues in a given year as a result of fraud.
  • The frauds in this report accounted for more than $6.3 billion in total losses, with an average loss per case of $2.7 million.
  • The median loss for all cases was $150,000, with 23.2% of cases causing losses of $1 million or more
  • The longer an occupational fraud scheme goes undetected, the greater losses tend to be.  The median duration of frauds in the study was 18 months.

Based on these results, businesses and government entities should always be alert to fraud risk.  Smaller organizations are extremely susceptible to fraud, because they typically have a significantly lower number of anti-fraud controls due to limited resources and/or they have implemented less-effective controls.

What should organizations do?  

Anti-fraud controls can help to mitigate fraud losses, deter potential fraudsters and lead to quicker detection of fraud if it does occur.  Proactive data monitoring was associated with 54% lower losses and resulted in frauds being detected in half the time.  Management review and the presence of a hotline were also both correlated with lower loss amounts and decreased time to detect the scheme.

Schneider Downs specializes in fraud mitigation services and can assist in right-sizing your approach to preventing, detecting and deterring fraud within your organization. We also have a dedicated team of professionals who specialize in investigative and forensic accounting that can help assist in your investigation. 

Contact us if you have concerns that fraud is occuring or has occured within your organization and visit our Business Advisory webpage to learn more about other services that the Schneider Downs Business Advisors offer

 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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