RISK management & fraud
The fight against fraud—Knowledge is power By Janice T. Jasinski, CPA, CFE, CGMA, SSB CPAs
Occupational fraud can happen anywhere and at any time. Unfortunately, small businesses and organizations are particularly vulnerable to occupational fraud because they lack the resources to properly implement internal controls and segregate accounting duties among their limited number of employees. Many small businesses and organizations often adopt an “it can’t happen here” mindset, which could prove to be costly.
Fraud 2022: A Report to the Nations" (Copyright 2022 by
The Association of Certified Fraud Examiners (ACFE)
with the fewest employees had the highest median loss
publishes a biannual study detailing the costs, schemes,
($150,000).
perpetrators and victims of occupational fraud. "Occupational
24 | CPA Voice
the ACFE) was recently released covering 2,110 real cases of white-collar crime occurring in 133 countries and 23 industries. The report estimates that organizations lose 5% of revenue to fraud each year with a $117,000 median loss per case and a staggering $1,783,000 average loss per case. However, the study recognizes that the 5% benchmark is a conservative estimate because many frauds go undetected or unmeasured. As a result, the true losses from occupational fraud are probably much higher than the study suggests. Following is a recap of various statistics and other information from "Occupational Fraud 2022: A Report to the Nations" (Copyright 2022 by the ACFE):
Median losses The top five median losses by industry were in real estate ($435,000), wholesale trade ($400,000), transportation and warehousing ($250,000), construction ($203,000) and utilities ($200,000). The study further indicated that organizations
