Tips on Fighting Fraud

Fighting Fraud – Highlight of Occupational Fraud 2024: A Report to the Nations

The Association of Certified Fraud Examiners (ACFE) in their recently released 2024 Report to the Nations made the following findings

Out of 1921 cases from 138 countries and territories, CFEs estimate that organizations lose 5% of revenue to fraud each year, resulting in total losses of more than $3.1 billion

These cases of occupational fraud were investigated between January 2022 and September 2023.

A further breakdown shows that asset misappropriation schemes constitute about 89% of the cases but they are the least costly. Only an average of $120,000 while financial statement frauds are the least common but costliest – average of $766,000 (5% of cases)

Almost half (48%) of reported cases included corruption.

The most common asset misappropriation schemes were billing schemes (22%) and theft of non cash items(22%), while the most costly were check and payment tampering (averagely $155,000) and billing schemes (average of $100,000).

Detection: The study found that more than half of the tips come from employees and nearly a third are from vendors and customers.

The highest mechanism for these tips are via the internet (40%) and mails (37%) while telephone recorded the least at 30%.

According to the report, a typical fraud case lasts 12 months before detection.

Perpetrators: On the average, owners/executives are responsible for far more (x7) fraud losses than what employees carry out.

More than half of these fraud cases came from Operations, Accounting, Sales, Customer Service and Executive/Upper Management.

The report shows that the longer the fraudster has worked for an organization the more costly their fraud.

It also found that 84% of fraudsters displayed at least one behavioral red flag.

More than half of occupational frauds occur due to lack of internal controls or override of existing internal controls.

Anti-fraud Controls: The presence of anti-fraud controls is associated with lower fraud losses and quicker fraud detection.

*Occupational fraud is the fraud committed by persons against the organization that employed them.

	Corruption Risk Per Region
S/N	Region	%
1	Southern Asia	74
2	Eastern Europe and Western/Central Asia	71
3	Sub-Saharan Africa	59
4	Asia-Pacific	56
5	Middle East and North Africa	55
6	Latin America and the Caribbean	55
7	Western Europe	53
8	United States and Canada	35
	Source: Association of Certified Fraud Examiners (ACFE)

Onene Osila Obele-Oshoko CFE, FCA, FCTI, FIOD