Page 501 - ACFE Fraud Reports 2009_2020

How Occupational Fraud Is Committed

Duration of Fraud Schemes
In addition to the type of scheme perpetrated, the loss caused by a fraud is also a function of how long it lasts before
being detected. As shown in Figure 18, the longer perpetrators are able to go undetected, the more financial harm
they are able to cause. The good news is that many fraud losses are mitigated by early detection, as more than one-
quarter of cases were uncovered in the first six months. However, the median duration of the frauds in our study was
18 months, and more than 32% lasted at least two years before they were discovered.

Figure 18: Frequency and Median Loss Based on Duration of Fraud

$900,000 30%
$850,000
26.4%
$800,000
$738,000 25%
$700,000 20%
$600,000
MEDIAN L OSS $500,000 18.9% 14.0% 12.0% $350,000 15% PERCENT OF CASES

$400,000

$300,000
8.5% $300,000 7.8% 10%
$200,000 6.3% 6.0%
$150,000 $150,000 5%
$100,000 $100,000
$45,000
$0 0%
6 Months 7–12 13–18 19–24 25–36 37–48 49–60 More than
or Less Months Months Months Months Months Months 60 Months
DURATION OF SCHEME
Median Loss Percent of Cases

THE LONGER AN OCCUPATIONAL FRAUD SCHEME GOES
UNDETECTED, THE GREATER LOSSES TEND TO BE.

THE MEDIAN DURATION OF THE FRAUDS IN OUR STUDY WAS 18 MONTHS.

NEARLY ONE-THIRD OF FRAUDS
LASTED AT LEAST TWO YEARS
BEFORE THEY WERE DETECTED.

REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE 17