Key Points of ACFE’s Occupational Fraud 2024: A Report to the Nations
Overview
The study conducted by the ACFE covered 1,921 cases from 138 countries and territories. The cases covered caused total losses of more than $3.1 billion. The study found that Asset Misappropriation Schemes were the most common, but least costly. Asset Misappropriation Schemes accounted for 89% of the cases with a median loss of $120,000. The study also found that Financial Statement Frauds are the least common, but most costly. Financial Statement Frauds accounted for only 5% of the cases with a median loss of $766,000.
Detection of Fraud
Timely detection is an important part of reducing fraud loss. The study found that 43% of the frauds were detected by tips, which is 3x as many cases as the next most common method. More than half (52%) of tips come from employees while 21% and 11% come from customers and vendors respectively. The most common mechanisms used to report tips are telephone (30%), email (37%), and web-based (40%).
Victims of Fraud
Every organization is at risk of being a victim of fraud. The Top 5 Median Losses by Industry are Mining ($550,000), Wholesale Trade ($361,000), Manufacturing ($267,000), Construction ($250,000), and a tie between Real Estate, Government, and Public Administration ($200,000). More than half of all cases came from these five departments: Operations (14%), Accounting (12%), Sales (12%), Customer Service (9%), and Executive/Upper Management (9%).
Anti-Fraud Controls
The study found that the presence of anti-fraud controls is associated with lower fraud losses and quicker fraud detection. The study also found that 82% of victim organizations modified their anti-fraud controls following the fraud. More than half of occupational frauds occur due to a lack of internal controls (32%) or an override of existing internal controls (19%).
Case Results
The results of the study found that 68% of perpetrators were terminated by their employers, 57% of cases were referred to law enforcement, and 72% of those referrals resulted in a conviction.
