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Top Three Fraud Statistics Every Business Should Know

Fraud is one of the biggest on-going risks that companies face. Employees turned criminals prey on the weakest link and pad their pockets with company assets or ring up personal purchases on company credit cards.  A global study from the Association of Certified Fraud Examiners uncovered three important facts every business should know.

Who is Committing Fraud?

Fraud doesn’t discriminate when it comes to company size or location; everyone is at risk. An AFCE study found 77% of workplace frauds are committed by employees in accounting, customer service, executive management, finance, operations and/or sales.

Financial Impact

Fraud losses are growing at a staggering pace. Globally, companies are finding more than $3.7 trillion missing each year. CFE experts report ID theft and cyber-crime, specifically credit card abuse, are the most common frauds impacting small businesses.  Companies with fewer than 100 employees on average suffer a loss of $155,000 each year. The number is less ($120,000) for larger companies. The ACFE study revealed financial statement fraud does the most damage, with the number totaling over $1 million annually.

The Big Picture

The only way to reduce the threat is for companies to put anti-fraud policies in place and create a zero tolerance environment. This monitoring can lead to early detection which in turn can reduce the amount of financial loss. For smaller companies this step is crucial since often employees are performing multiple accounting or financial functions with little or no oversight.

Top Fraud Triggers

In order for fraud to occur, three things need to be present. Matt Barberich, a forensic accountant at MarksNelson, offers tips for protecting your business. Watch below.

About the Author

MarksNelsonView all posts by MarksNelson
MarksNelson LLC works with clients to help safeguard and grow their businesses. Our ultimate goal is to help our clients to Move Forward. The firm provides Assurance, Accounting Services and Business Advisory, Business Valuation, Consulting, Cost Segregation, Employee Benefit Plan Audits, Litigation Support, Forensic Accounting, International Tax, State and Local Tax and Tax planning, advisory and compliance services. MarksNelson is a member of The Leading Edge Alliance, the second-largest international professional association of independently owned accounting and consulting firms, serving clients who need additional resources on a national or international level. MarksNelson has significant accounting and business advisory experience in the auto dealership, construction, insurance, manufacturing, distribution and real estate sectors. The firm was named among the 2014 Best Accounting Firms for Leadership Equity by the 2014 Accounting MOVE Project for its dedication to gender equity.