Anti-fraud Controls Cut Significantly Into Losses (Journal of Accountancy)

The presence of anti-fraud controls such as management reviews and telephone hotlines can greatly reduce the damage done by fraud schemes. And the use of such controls is slowly on the rise.

Those are two of the trends identified in the 2016 Report to the Nations on Occupational Fraud and Abuse, released Wednesday by the Association of Certified Fraud Examiners. The biennial report, which is based on thousands of fraud cases reported by fraud examiners worldwide, provides a detailed look into how fraud is being perpetrated, detected, and combatted in various industries and regions.

Fraud takes a significant toll on organizations. The fraud examiners who participated in the survey estimated that the typical organization loses 5% of revenues to fraud in a given year. The losses caused by fraud reported in the study totaled more than $6.3 billion, an average loss of $2.7 million per case. That average was boosted significantly by the 23.3% of cases with losses of $1 million or more. The median loss was $150,000.

See more at: http://www.journalofaccountancy.com/news/2016/mar/…

Advertisements