Forensic Accounting Specialists

Fraud Facts:

(Taken From/Adapted from ACFE 2010 Report to the Nations on Occupational Fraud and Abuse)

Asset Misappropriation (includes cash larceny) is the most common form of fraud, representing over 90% of the cases investigated in the 2010 study. The median loss for this type of fraud was $135,000.
Small organizations (<100 employees) are disproportionately victimized by occupational fraud. These companies typically have less resources to dedicate to fraud related controls as compared to larger organizations.
All organizations tend to over-rely on annual audits. External audits were the control mechanism most widely used in the ACFE survey, but these same audits ranked comparatively poorly in both detecting fraud and limiting losses due to fraud.
Internal controls alone are insufficient to fully prevent occupational fraud. Though these controls are critical, they will not prevent all fraud, nor will they alone detect fraud committed by employees in positions to override or circumvent these controls.
More than 80% of the cases in the ACFE study were committed by individuals in one of six departments: accounting, operations, sales, executive/upper management, customer service, or purchasing.
More than 85% of the fraudsters in the ACFE study had never been previously charged or convicted for a fraud-related offense.

Conclusions:

The prevention and detection of fraud is a strategic balance of systematic internal controls, management/ownership initiative, and the understanding of inherent risks existing in an operation. Internal controls cannot guarantee the prevention of fraud, but without such controls, the opportunity for fraud will certainly exist and the probability for committing fraud increases.
It is paramount that an organization, regardless of size create a culture of honesty, and a control environment that increase the "perception of detection" for the would-be fraudster.
Forensic Accountings Specialists has the ability to assist you in building a rigorous control environment, and can augment your ability to detect fraud related actions and support any subsequent investigation/litigation.