Page 598 - ACFE Fraud Reports 2009_2020

FRAUD IN SMALL BUSINESSES Corruption 32% 43%

29%
Billing 18%
Fraud can be especially devastating to small businesses. These organizations typically have 22%
Check and
fewer resources to both prevent and recover from a fraud, and they often require an increased payment tampering 8%
level of trust in employees due to a lower ability to implement robust anti-fraud controls. Expense 21%
reimbursements 11%
Skimming 20% Small businesses face
8% DIFFERENT RISKS
20%
Cash on hand
14% than larger organizations
SMALL BUSINESSES Noncash 16% 22%
LOSE ALMOST Financial 16%
TWICE AS MUCH statement fraud 7%
PER SCHEME TO Cash larceny 9% 14%
OCCUPATIONAL FRAUD <100 Employees
Payroll 13%
5%
Register 3% 100+ Employees
disbursements 2%
0% 10% 20% 30% 40%

PERCENT OF CASES

<100 EMPLOYEES 100+ EMPLOYEES
Median loss: Median loss: Small businesses
$200,000 $104,000 typically have fewer 100%

anti-fraud Controls
than larger organizations,
leaving them more 80%
vulnerable to fraud
100+ Employees 60%

29% 44% 40%

Frauds detected by tip:

Frauds caused by 42% 25% <100 Employees 20%
lack of internal controls: Surprise audits Anti-fraud policy Internal audit department Management review 0%
Code of conduct
Employee support programs
Hotline
Management certification of financial statements
Formal fraud risk assessments
Job rotation/mandatory vacation
Rewards for whistleblowers
Proactive data monitoring/analysis
Fraud training for managers/executives
an owner/executive: 29% 16% External audit of internal controls over financial reporting
Frauds perpetrated by Dedicated fraud department, function, or team Fraud training for employees Independent audit committee External audit of financial statements

22 Victim Organizations Report to the Nations