If you own or run a business or organization, then you need to be concerned about fraud or internal theft. Fraud is a major problem that can, and has, affected organizations of all kinds, from businesses to non-profits, from small mom-and-pop stores to multi-national corporations.
Every year, the most respected anti-fraud organization in the world, the Association of Certified Fraud Examiners, releases its annual Report to the Nations. The Report is a comprehensive analysis of fraud – who is affected, how it occurs, and how much it costs. The 2016 Report revealed some frightening statistics:
• A typical victimized organization loses 5% of revenue in a given year due to fraud
• Median losses due to fraud are approximately $150,000
• 23% of cases caused losses of $1 million or more.
• For-profit organizations were targeted in two-thirds of reported cases, and had higher median losses.
• Median losses for small organizations (with less than 100 employees) were the same as those incurred by the largest organizations (with 10,000 or more employees) – but those losses have much greater impact on small entities.
• Most occupational fraudsters are first-time offenders – only 5.2% of reported offenders had previously been convicted, and only 8.3% had previously been fired for fraud-related conduct.
The bottom line, of course, is that the leaders of every organization need to take the risk of fraud seriously, learn how they may be vulnerable to fraud, and take steps to protect themselves.
In future blog posts, I will detail common fraud schemes, case studies of notable large and small frauds, and strategies for how you can fortify your organization against the threat of fraud or internal theft.
For more information, contact Sinai Megibow at s.megibow@RadiusInvestigations.com or call us at 888-698-0077.