2012 ACFE REPORT TO THE NATIONS – OCCUPATIONAL FRAUD & ABUSE

Every two years the ACFE1undertakes a survey on fraud around the globe. The data presented in the 2012 Report is based on 1,388 cases of occupational fraud that were reported by the Certified Fraud Examiners (CFE’s) who investigated them. The frauds2occurred in nearly 100 countries onsix continents, (including Australia) and offer readers an interesting insight into the global nature of occupational fraud. Whilst, the full report can be accessed under the publications page of our website at http://www.faqld.com.au/publications.html, I have set out a summary of the report’s major findings below for your information:

• Organisations lose an estimated 5% of total revenue to fraud each year,

• The median loss caused by occupational fraudis $140,000,

• More than 20%of the reported losses exceeded $1 million,

• The frauds had been undertaken for an average of 18 months before being detected,

• Asset misappropriation schemes were by far the most common type of occupational fraud, comprising 87% of the cases reported with a medium loss of $120,000,

• Financial statement fraud schemes represented 8% of the cases in the study,but caused the greatest median loss at $1 million,

• Occupational fraud is more likely to be detected by a tip off than by any other method,

• Corruption and billing schemes pose the greatest risks to organizations throughout the world. For all geographic regions, these two scheme types comprised more than 50% of the frauds reported,

• Occupational fraud is a significant threat to small businesses – suffering the largest median losses,

1 http://www.acfe.com/

2 The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets