Fraud Detection & Prevention
According to the Association of Certified Fraud Examiners’ (ACFE) 2016 Report to the Nations, the typical fraud lasted 18 months from the time it began until the time it was caught by the victim organization.
The report contained additional facts you should know:
- U.S. organizations lose 7% of their annual revenues to fraud, translating to approximately $994 billion in fraud losses.
- Small businesses are especially vulnerable to occupational fraud.
- Occupational fraudsters are generally first-time offenders, which means background checks would not have been a risk indicator in over 85% of all frauds.
- The lack of adequate internal controls was most commonly cited as the factor that allowed fraud to occur.
Did you know that financial audits are not designed to detect fraud?
Even if your financial statements are audited every year, the audit scope is intended to determine whether your financial statements contain a material misstatement, not to detect fraud. In 52% of cases where fraud occurred, external audits of financial statements were regularly conducted. According to the ACFE, organizations tend to over-rely on audits which rank poorly in detecting fraud and limited losses.
Engage a Certified Fraud Examiner to help ensure your organization’s assets are used only for authorized and legitimate purposes.