Victims of Fraud: Who is Most at Risk?

According to the most recent Global Fraud Study by the Association of Certified Fraud Examiners (2010), private companies had the greatest median loss due to fraud.  Small organizations with fewer than 100 employees had the greatest percentage of fraud loss with more than 30 percent being affected.  The median loss for small organizations was $155,000.

The top five types of frauds for small businesses (<100 employees) are: billing, (28.7 percent), check tampering (26.1 percent), corruption (25.5 percent), skimming (21.6 percent) and expense reimbursements (16.8 percent).

The specific risks to any organization depend on many factors such as industry, operating environment, processes and culture.  However, small private companies in particular need to be aware of the dangers of fraud from within their organizations and take the appropriate precautions to help prevent it.

Organizations who suspect fraudulent activity should contact a Certified Fraud Examiner to investigate the extent of the fraud and recommend internal controls to help deter employees from committing fraud in the future.

Tricia J. Cook is a senior forensic analyst with the forensic accounting and litigation services department at Piercy Bowler Taylor & Kern CPAs. She sifts through financial transactions to resolve allegations or evaluate suspicions, interpreting that transactional data and then organizing that information into easy to understand reports for use by counsel, or for presentation in a court-of-law.  She can be reached at tcook@pbtk.com or 702-384-1120.

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