Fraud investigation

Occupational frauds: the ACFE report

Enrico Cimpanelli Enrico Cimpanelli

What is an occupational fraud? Occupational fraud is defined as an unlawful action perpetrated by a member of an organization for personal enrichment thorough the unlawful or illicit use of the organization’s assets or resources. It is the most widespread type of fraud and an enormous threat to the global economy.

The Association of Certified Fraud Examiners (ACFE), a worldwide professional association aimed at preventing, identifying and investigation corporate frauds, has published the 2018 edition of the ‘Report of Nations’, a survey conducted globally containing the analysis of 2,690 cases of occupational fraud in a period ranging from January 2016 and October 2017.

Below are the key findings of this survey, published in April 2018: 

  • the total losses associated with frauds exceed 7 billion USD
  • the greatest number of cases occurred in the banking and financial services industry
  • victim organizations include all types of companies, from small-medium companies to big corporations
  • internal control weaknesses are the main responsible for the occurrence of frauds.
  • in most cases, fraud schemes are initially detected by tips from employees or outside parties
  • in most cases, fraudsters have displayed behaviours that may suggest an illicit conduct
  • the majority of victims recover nothing

Occupational frauds data

Although the study proves that occupational frauds remain a huge risk for enterprises and for the global economy in general, it also shows the increased awareness of companies towards these crimes and the advancements made in their ability to prevent and combat them through suitable and effective instruments.

Indeed, many organizations have implemented and are implementing instruments and strategies aimed at soliciting tips regarding red flag conducts from employees or generally from people working within the organization. Thanks to these instruments (eg. hotlines) that ensure the possibility of reporting fraud also anonymously, tips have increased: 46% against 30% for companies without hotlines.

Stay tuned for the next fraud updates. We will cover the following topics:

 

For further information, please contact Enrico Cimpanelli, partner di Grant Thornton Financial Advisory Services e Certified Fraud Examiner, membro dell'Association of Certified Fraud Examiners (ACFE).

                                 

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