figure 1: breakdown of cases by country 1: breakdown of cases by country ... register disbursements...

Country Number of Cases

Afghanistan 4

Bangladesh 4

India 77

Nepal 2

Pakistan 11

Figure 1: Breakdown of Cases by Country

© 2017 Association of Certified Fraud Examiners, Inc. All rights reserved.


Figure 2: Occupational Frauds by Category—Frequency

0% 10% 20% 30% 40% 50% 60% 70% 80%

FinancialStatement Fraud

Corruption

AssetMisappropriation

TY

PE

OF

FR

AU

D

P E R C E N T O F C A S E S

74.5%

8.2%

67.3%


Figure 3: Occupational Frauds by Category—Median Loss

$0 $50,000 $100,000 $150,000

Financial Statement Fraud*

Corruption

AssetMisappropriation

TY

PE

OF

FR

AU

D

M E D I A N L O S S

$100,000

$112,000

*Financial Statement Fraud category had insufficient responses for median loss calculation.

0% 10% 20% 30% 40% 50% 60% 70% 80%

Register Disbursements

Check Tampering

Payroll

Cash Larceny

Skimming

Financial Statement Fraud

Cash on Hand

Billing

Expense Reimbursements

Non-Cash

Corruption

SC

HE

ME

TY

PE


67.3%

22.4%

14.3%

12.2%

4.1%

4.1%

2.0%

9.2%

8.2%

7.1%

7.1%

Figure 4: Frequency of Fraud Schemes


DE

TE

CT

ION

ME

TH

OD


0% 10% 20% 30% 40% 50% 60%

Other

Confession

External Audit

Surveillance/Monitoring

By Accident

Account Reconciliation

Management Review

Internal Audit

Tip 53.1%

21.9%

5.2%

4.2%

3.1%

1.0%

1.0%

1.0%

9.4%

Figure 5: Initial Detection of Occupational Frauds



SO

UR

CE

OF

TIP

S

P E R C E N T O F T I P S

0% 10% 20% 30% 40% 50%

Other

Vendor

Customer

Anonymous

Employee

25.5%

43.1%

5.9%

19.6%

19.6%

Figure 6: Source of Tips

DE

TE

CT

ION

ME

TH

OD

Organizations With Hotlines

Organizations Without Hotlines

0% 10% 20% 30% 40% 50% 60% 70%

By Accident

Account Reconciliation

Management Review

Internal Audit

Tip


9.8%

4.9%

3.3%4.0%

40.0%59.0%

18.0%28.0%

8.0%

8.0%

Figure 7: Impact of Hotlines on the Top Five Detection Methods



Figure 8: Type of Victim Organization—Frequency and Median Loss

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Other*Not-for-Pro�t*Government*Public CompanyPrivate Company

T Y P E O F V I C T I M O R G A N I Z AT I O N

ME

DIA

N L

OS

SP

ER

CE

NT

OF

CA

SE

S

Percent of CasesMedian Loss

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

$85,000

$100,000

43.9%

2.0%6.1%

40.8%

7.1%

*Government, Not-for-Profit, and Other categories had insufficient responses for median loss calculation.

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

10,000+1,000–9,999100–999<100

N U M B E R O F E M P L O Y E E S

ME

DIA

N L

OS

SP

ER

CE

NT

OF

CA

SE

S


$87,000

46.3%

22.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

14.7%

$100,000

16.8%

$136,000

$36,000

Figure 9: Size of Victim Organization—Frequency and Median Loss


0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Agriculture, Forestry, Fishing,and Hunting

Mining

Transportation andWarehousing

Services (Other)

Communications andPublishing

Oil and Gas

Retail

Construction

Government and PublicAdministration

Insurance

Telecommunications

Education

Health Care

Other

Technology

Banking and Financial Services

Manufacturing

IND

US

TR

Y


12.2%

10.2%

4.1%

4.1%

4.1%

4.1%

2.0%

17.3%

17.3%

7.1%

5.1%

3.1%

3.1%

3.1%

1.0%

1.0%

1.0%

Figure 10: Industry of Victim Organization


AN

TI-

FR

AU

D C

ON

TR

OL


0% 20% 40% 60% 80% 100%

Rewards for Whistleblowers

Job Rotation/Mandatory Vacation

Employee Support Programs

Formal Fraud Risk Assessments

Proactive Data Monitoring/Analysis

Dedicated Fraud Department,Function, or Team

Fraud Training for Employees

Surprise Audits

Anti-Fraud Policy

Fraud Training for Managers/Executives

Hotline

Management Review

Independent Audit Committee

External Audit of Internal Controlsover Financial Reporting

Code of Conduct

Management Certi�cationof Financial Statements

Internal Audit Department

External Audit of Financial Statements

20.3%

86.7%

82.6%

79.8%

70.5%

61.2%

44.7%

44.6%

23.5%

89.0%

91.6%

34.6%

53.8%

54.9%

57.1%

58.1%

94.7%

96.5%

Figure 11: Frequency of Anti-Fraud Controls



Control Percent of Cases Control in Place Control Not in Place

Percent Reduction

Fraud Training for Employees 54.9% $62,000 $100,000 38.0%

Fraud Training for Managers/Executives 61.2% $73,000 $100,000 27.0%

Anti-Fraud Policy 58.1% $85,000 $100,000 15.0%

Code of Conduct 89.0% $92,000 $100,000 8.0%

Independent Audit Committee 82.6% $92,000 $100,000 8.0%

Hotline 70.5% $92,000 $100,000 8.0%

Job Rotation/Mandatory Vacation 23.5% $92,000 $100,000 8.0%

Rewards for Whistleblowers 20.3% $96,000 $100,000 4.0%

External Audit of Internal Controls over Financial Reporting 86.7% $100,000 $100,000 0.0%

Management Review 79.8% $100,000 $89,000 -12.4%

Surprise Audits 57.1% $100,000 $89,000 -12.4%

Proactive Data Monitoring/Analysis 44.7% $100,000 $85,000 -17.6%

Dedicated Fraud Department, Function, or Team 53.8% $100,000 $74,000 -35.1%

Formal Fraud Risk Assessments 44.6% $100,000 $56,000 -78.6%

Employee Support Programs 34.6% $100,000 $50,000 -100.0%

External Audit of Financial Statements 96.5% $100,000 *

Internal Audit Department 94.7% $100,000 *

Management Certification of Financial Statements 91.6% $100,000 *

Figure 12: Median Loss Based on Presence of Anti-Fraud Controls

*Category had insufficient responses for median loss calculation.


Control Percent of Cases Control in Place Control Not in Place Percent Reduction

Anti-Fraud Policy 58.1% 6 months 24 months 75.0%

Rewards for Whistleblowers 20.3% 5 months 14 months 64.3%

Proactive Data Monitoring/Analysis 44.7% 6 months 16 months 62.5%

Job Rotation/Mandatory Vacation 23.5% 6 months 15 months 60.0%

Code of Conduct 89.0% 12 months 24 months 50.0%

External Audit of Internal Controls over Financial Reporting 86.7% 12 months 24 months 50.0%

Fraud Training for Managers/Executives 61.2% 12 months 24 months 50.0%

Employee Support Programs 34.6% 9 months 17 months 47.1%

Hotline 70.5% 12 months 18 months 33.3%

Fraud Training for Employees 54.9% 12 months 18 months 33.3%

Dedicated Fraud Department, Function, or Team 53.8% 12 months 18 months 33.3%

Management Review 79.8% 11 months 16 months 31.3%

Independent Audit Committee 82.6% 12 months 16 months 25.0%

Formal Fraud Risk Assessments 44.6% 12 months 16 months 25.0%

Surprise Audits 57.1% 12 months 12 months 0.0%

External Audit of Financial Statements 96.5% 12 months *

Internal Audit Department 94.7% 12 months *

Management Certification of Financial Statements 91.6% 12 months *

Figure 13: Median Duration of Fraud Based on Presence of Anti-Fraud Controls

*Category had insufficient responses for median duration calculation.

6.6% 2.9%

Override of Existing Internal Controls18.8%

Poor Tone at the Top11.5%

Other2.1%

Lack of Internal Controls35.4%

Lack of Reporting Mechanism1.0%

Lack of Competent Personnel in Oversight Roles

8.3%

Lack of Clear Lines of Authority3.1%

Lack of Management Review10.4%

Lack of Independent Checks/Audits7.3%

Lack of Employee Fraud Education2.1%

Figure 14: Primary Internal Control Weakness Observed by CFE



Figure 15: Position of Perpetrator—Frequency and Median Loss

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Other*Owner/Executive*ManagerEmployee

ME

DIA

N L

OS

SP

ER

CE

NT

OF

CA

SE

S


$75,000

P O S I T I O N O F P E R P E T R AT O R

26.9%

0%

10%

70%

20%

30%

40%

50%

60%

62.4%

7.5%

3.2%

$96,000

*Owner/Executive and Other categories had insufficient responses for median loss calculation.

0% 5% 10% 15% 20% 25%

Manufacturing and Production

Board of Directors

Human Resources

Finance

Marketing/Public Relations

Information Technology

Executive/Upper Management

Customer Service

Warehousing/Inventory

Other

Accounting

Purchasing

Sales

Operations 20.4%

18.3%

15.1%

8.6%

5.4%

2.2%

1.1%

1.1%

1.1%

9.7%

4.3%

4.3%

4.3%

4.3%

DE

PA

RT

ME

NT

OF

PE

RP

ET

RA

TO

R


Figure 16: Department of Perpetrator—Frequency


Male 96.8%

Female3.2%

Figure 17: Gender of Perpetrator—Frequency


$0 $50,000 $100,000 $150,000

Female

Male

GE

ND

ER

OF

PE

RP

ET

RA

TO

R

M E D I A N L O S S

$100,000


Figure 18: Gender of Perpetrator—Median Loss

Never Charged or Convicted88.5%

Had Prior Convictions4.9%

Charged but Not Convicted6.6%

Other1.6%

Figure 19: Criminal Background of Perpetrator


6.6% 2.9%

Never Punished or Terminated86.5%

Previously Punished9.6%

Previously Terminated5.8%

Figure 20: Employment Background of Perpetrator


0% 20% 40% 60% 80% 100%

Civil Suit

Referral toLaw Enforcement

LE

GA

L A

CT

ION

TA

KE

N


81.9%

No

Yes

32.6% 67.4%

18.1%

Figure 21: Cases Resulting in Referral to Law Enforcement or Civil Suit


0% 10% 20% 30% 40% 50% 60%

100%

76–99%

51–75%

26–50%

1–25%

No Recovery

PE

RC

EN

T O

F L

OS

S R

EC

OV

ER

ED


48.5%

15.2%

4.5%

1.5%

21.2%

9.1%

Figure 22: Recovery of Victim Organization’s Losses


15.5%

6.0%

3.6%

2.4%

66.7%

AC

TIO

N T

AK

EN

AG

AIN

ST

PE

RP

ET

RA

TO

R


0% 10% 20% 30% 40% 50% 60% 70%

Probation or Suspension

No Punishment

Perpetrator Was No LongerWith Organization

Other

Settlement Agreement

Permitted or RequiredResignation

Termination

9.5%

9.5%

Figure 23: Action Taken Against Perpetrator


Industry Number of Cases Percent of Cases Median Loss

Technology 12 $200,000

Banking and Financial Services 17 $100,000

Manufacturing 17 $100,000

Other 10 $73,000

Figure 24: Industry of Victim Organizations (Sorted by Median Loss)


*Category had insufficient responses for median duration calculation.

figure 1: breakdown of cases by country 1: breakdown of cases by country ... register disbursements...

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