Page 118 - ACFE Fraud Reports 2009_2020

Introduction

The term “occupational fraud” may be defined as: “The use of one’s occupa-

tion for personal enrichment through the deliberate misuse or misapplica-
tion of the employing organization’s resources or assets.”

This definition is very broad, encompassing a wide range In 1996, the ACFE released the first Report to the Nation
of misconduct by employees, managers, and executives. on Occupational Fraud and Abuse, which shed light on the
Occupational fraud schemes can be as simple as pilferage immense and largely undefined costs that occupational
of company supplies or as complex as sophisticated finan- fraud imposes on organizations. The stated goals of the
cial statement frauds. first Report were to:
• Summarize the opinions of experts on the
All occupational fraud schemes have four key elements in percentage and amount of organizational revenue
common. The activity:
lost to all forms of occupational fraud and abuse;
• Is clandestine; • Examine the characteristics of the employees who
• Violates the perpetrator’s fiduciary duties to the commit occupational fraud and abuse;
victim organization;
• Determine what kinds of organizations are victims
• Is committed for the purpose of direct or indirect of occupational fraud and abuse; and
financial benefit to the perpetrator; and • Categorize the ways in which serious fraud and

• Costs the employing organization assets, revenue or abuse occurs.
reserves.
All of the enumerated goals of the first Report fell under
one larger and more all-encompassing mission: to better
educate the public and anti-fraud professionals about the
threat of occupational fraud. Since that time, with each
subsequent edition of the Report to the Nation, that has
remained our primary goal.

Occupational Fraud and Abuse is a widespread
problem that affects practically every organization.

ACFE Report to the Nation on Occupational Fraud & Abuse