Organizations around the world lose approximately five percent of their annual revenues to financial fraud, according to a survey by The Association of Certified Fraud Examiners (ACFE). The data can be surprising and gains the attention of anti-fraud practitioners, organizational leaders, and financial managers. Here, we reference 11 statistics that prove no organization is immune to the misrepresentation of financial assets.
Financial fraud can be defined as a deliberate misrepresentation to gain an advantage over another party. According to the ACFE, they are perpetrated by individuals or organizations to obtain money, property, or services; to avoid payment or loss of services, or to secure personal or business advantage. It comes in many different forms, including financial statements, the misappropriation of assets (theft) and cover-ups. Below, read how asset misappropriation is seen across the organization.
Every organization should have a well-established risk mitigation strategy in place to ensure due diligence in the detection and prevention of occupational fraud. While using internal controls and manual auditing is helpful, this is not a complete solution. Continuous monitoring is imperative, and the use of systems to identify potential cash leakage, gaps in approval processes, risky vendors, and inappropriate spend is now readily available. Annual financial fraud awareness training for all employees should also be required.
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1 Work Cited: Goldmann, Peter. “Anti-Fraud Risk and Control Workbook: Goldmann, Peter, Kaufman, Hilton: 9780470496534.” com, Wiley, July 2009, https://www.amazon.com/Anti-Fraud-Control-Workbook-Peter-Goldmann/dp/0470496533. Accessed 9 December 2021.
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