Page 234 - ACFE Fraud Reports 2009_2020

5 The perpetrators

Departments with the Most Departments with the Most
Financial Statement Fraud Corruption Cases

although they occurred in only 10% of all cases corruption schemes, such as bribery and conflicts
in our study, financial statement fraud schemes of interest, characteristically involve the exertion of
were by far the most costly form of fraud. as part the perpetrator’s influence in a way that unfairly
of our analysis, we examined which employees are influences a business transaction. consequently, it
most frequently responsible for financial statement is those individuals with the most authority over
schemes. the organization’s operational and financial activi-
ties who are most likely to engage in these types
over 70% of the financial statement frauds in our of schemes. as would be expected, executives and
study were perpetrated by individuals in either the upper management-level employees — individu-
executive suite or the accounting department. em- als who typically hold the most power within the
ployees in these two roles are charged with the pri- organization — were most often cited as the per-
mary responsibility for the financial statements — petrators in the corruption schemes in our study.
accountants with correctly processing the financial employees involved in the daily business opera-
information that comprises the reported numbers, tions of the organization and those in the account-
and executives with ensuring the completeness and ing department were each involved in 16% of the
accuracy of the official statements. corruption cases.

Financial Statement Fraud Corruption

Pct. of Pct. of
Department # of Cases Department # of Cases
Cases Cases
Executive / Upper Management 36 40.9% Executive / Upper Management 64 29.1%
Accounting 27 30.7% Operations 34 15.5%
Operations 8 9.1% Accounting 34 15.5%
Finance 5 5.7% Sales 27 12.3%
Purchasing 3 3.4% Finance 10 4.5%
Manufacturing and Production 2 2.3% Purchasing 9 4.1%
Warehousing / Inventory 2 2.3% Customer Service 8 3.6%
Board of Directors 1 1.1% Warehousing / Inventory 8 3.6%
Customer Service 1 1.1% Manufacturing and Production 5 2.3%
Internal Audit 1 1.1% Board of Directors 3 1.4%
Legal 1 1.1% Human Resources 3 1.4%
Sales 1 1.1% Information Technology 3 1.4%
Legal 3 1.4%
Research and Development 3 1.4%
Internal Audit 1 0.5%
Marketing / Public Relations 1 0.5%

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