Survey: U.S. Organizations Lose Seven Percent Of Annual Revenue To Fraud

July 17, 2008

U.S. organizations lose an estimated seven percent of their annual revenues to fraud, according to a survey of Certified Fraud Examiners who investigated cases between January 2006 and February 2008.

The Association of Certified Fraud Examiners (ACFE) published the results of the survey in its 2008 Report to the Nation on Occupational Fraud & Abuse. The benchmarking data is compiled from 959 cases of occupational fraud that were investigated between January 2006 and February 2008. When applied to the projected 2008 United States Gross National Product, the seven percent figure translates to approximately $994 billion in fraud losses.

The Report also found that:

  • Fraud schemes tend to be extremely costly. The median loss caused by the occupational frauds in this study was $175,000. More than one-quarter of frauds involved losses of at least $1 million.
  • Schemes frequently continue for years before they are detected. The typical fraud in our study lasted two years from the time it began until the time it was caught by the victim organization.
  • Frauds were most often committed by the accounting department or upper management, and most fraudsters were first-time offenders. Only seven percent of fraud perpetrators in the study had prior convictions and only 12 percent had been previously terminated by an employer for fraud-related conduct.
  • Occupational frauds are much more likely to be detected by a tip than by audits, controls or other means.
  • Small businesses are especially vulnerable to occupational fraud.
  • Seventy-eight percent of victim organizations modified their anti-fraud controls after discovering that they had been defrauded.

The Report also details findings such as how organizations were impacted based upon industry, how the implementation of anti-fraud controls affected exposure to fraud, and the most common behavioral traits observed among fraud perpetrators.

The Report to the Nation is available for download online at the ACFE’s Web site, www.ACFE.com/RTTN. The Report is in PDF format.


New Webinar

From the Sandbox to the College Campus

This Webinar will focus on schools and campuses, and how best to step up your facility security.

ID Insurance

Crossing the Chasm: Deterrence to Defeat

In this age of widespread easy access to personal information, identity theft has become the fastest growing and most lucrative crime in America.

Info. Security

Leaving Your Mark

Today’s mobile professionals carry more sensitive information than ever before. A single laptop can contain information that can be valued in the millions, if not billions, of dollars.

New Webinar

UHF Gen 2 RFID Expands Possibilities

When you think about security access and tracking solutions, now you can start thinking differently.

Poll

Which of the following identity management products do you see being the most useful in the security industry?