Page 62 - ACFE Fraud Reports 2009_2020

Table of Contents

2004 Report to the Nation on Occupational Fraud and Abuse

Letter from the President and CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i
About the ACFE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
What is Occupational Fraud?
2. METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Who Provided the Data?
Where Did the Frauds Occur?
Types of Organizations
3. MEASURING THE COST OF OCCUPATIONAL FRAUD . . . . . . . . . . . . . . . . . .8
Distribution of Dollar Losses
Uniform Occupational Fraud Classification System . . . . . . . . . . . . . . . . . . . . . . . . .10
4. HOW OCCUPATIONAL FRAUD IS COMMITTED . . . . . . . . . . . . . . . . . . . . . .11
Asset Misappropriations – Cash vs. Non-Cash
Cash Misappropriations
Fraudulent Disbursements
Comparison of All Fraud Categories – 2002 and 2004
Methods of Fraud Based on Industry
Methods of Fraud Based on Organization Type of the Victim
Methods of Fraud in Small Businesses
5. DETECTING OCCUPATIONAL FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Detecting Fraud by Owners and Executives
Detecting the Largest Frauds
Detecting Fraud in Small Businesses
Detection Based on the Type of Victim Organization
6. LIMITING FRAUD LOSSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
Anonymous Fraud Hotlines
Internal Audits
External Audits
7. THE PERPETRATORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
The Effect of the Perpetrator’s Position
The Perpetrator’s Annual Income
The Effect of Tenure
The Effect of Gender
The Effect of Age
The Effect of Education
The Effect of Collusion
The Perpetrators’ Criminal Histories
8. CASE RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Employment Actions Taken Against Fraudsters
Criminal Prosecutions
Civil Lawsuits
Why do Organizations Decline to Take Legal Action?
Recovering Losses Caused by Fraud