Page 586 - ACFE Fraud Reports 2009_2020

HOW

OCCUPATIONAL

FRAUD IS

COMMITTED FIG. 3 How is occupational fraud committed?

89%
What methods do

fraudsters use to

commit their schemes?

One of the goals of the first Report to the
Nation was to examine the methods by PERCENT OF C A SES 38%

which fraudsters commit their schemes,
and we have continued this line of study in
every subsequent report. Over the last two
decades, even with tremendous technolog- 10%

ical development and numerous changes in
the global business and regulatory environ-
ments, our research shows that occupation- Asset Corruption Financial
misappropriation statement fraud
al fraud falls into several time-tested cate-

gories. The taxonomy of these categories
is illustrated in the Occupational Fraud and
$114,000
Abuse Classification System, also known as
the Fraud Tree, as depicted in Figure 4.

$250,000
Categories of Occupational Fraud

Of the three primary categories of occupational fraud, MEDIAN L OSS
asset misappropriations are by far the most common,
occurring in 89% of the cases in our study. However,
they are also the least costly, causing a median loss of
USD 114,000. Corruption schemes are the next most
common form of occupational fraud; 38% of the cases
in our study involved some form of corrupt act. These
schemes resulted in a median loss to the victim organi-
zations of USD 250,000. The least common and most
costly form of occupational fraud is financial statement $800,000
fraud, which occurred in 10% of the cases and caused a
median loss of USD 800,000.

10 How Occupational Fraud Is Committed Report to the Nations