Page 117 - ACFE Fraud Reports 2009_2020

• This Report includes organizations representing • The size of the loss caused by occupational
a wide range of industries. The industries with the fraud is strongly related to the position of the
highest median losses per scheme were wholesale perpetrator. Frauds committed by owners or
trade ($1 million), construction ($500,000) executives caused a median loss of $1 million. This
and manufacturing ($413,000). Government is nearly five times more than the median loss caused
organizations ($82,000) and retail organizations by managers, and almost 13 times as large as the
($80,000) were among those with the lowest median median loss caused by employees.
losses.
• Most of the occupational fraud schemes in
• Small businesses continue to suffer our study involved either the accounting
disproportionate fraud losses. The median loss department or upper management. Just over
suffered by organizations with fewer than 100 30% of the occupational frauds were committed
employees was $190,000 per scheme. This was by employees in the accounting department, and
higher than the median loss in even the largest slightly more than 20% were committed by upper
organizations. The most common occupational management or executive-level employees. The next-
frauds in small businesses involve employees most-commonly cited department was sales, which
fraudulently writing company checks, skimming accounted for 14% of the cases in our study.
revenues, and processing fraudulent invoices.
• Nearly two-thirds of the victim organizations in our
• One reason small businesses suffer such high study routinely conducted background checks on
fraud losses is that they generally do a poor job of new employees. However, less than 8% of
proactively detecting fraud. Less than 10% of small the perpetrators had convictions prior to
businesses had anonymous fraud reporting systems, committing their frauds. Although background
and less than 20% had internal audit departments, checks on new employees can be a valuable
conducted surprise audits, or conducted fraud anti-fraud tool, our data suggests that other
training for their employees and managers. This measures such as fraud training, surprise audits and
helps explain why more small business frauds were anonymous reporting mechanisms can have a more
detected by accident than by any other means. significant impact in detecting fraud.

ACFE Report to the Nation on Occupational Fraud & Abuse