figure 1: breakdown of cases by country disbursements check tampering payroll cash larceny cash on...

Country Number of Cases

Albania 1

Armenia 3

Bulgaria 5

Czech Republic 8

Hungary 2

Kazakhstan 5

Kosovo 1

Montenegro 2

Poland 8

Romania 11

Russia 21

Serbia 4

Slovakia 8

Slovenia 2

Turkey 15

Ukraine 2

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% 90% 100%

Financial Statement Fraud

Corruption

Asset Misappropriation

TY

PE

OF

FR

AU

D

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

74.5%

55.1%

17.3%

Figure 3: Occupational Frauds by Category—Median Loss


$0 $200,000 $400,000 $600,000


Corruption

Asset Misappropriation

TY

PE

OF

FR

AU

D

M E D I A N L O S S

$131,000

$200,000

$530,000

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

Skimming

Register Disbursements

Check Tampering

Payroll

Cash Larceny

Cash on Hand

Expense Reimbursements


Non-Cash

Billing

Corruption

SC

HE

ME

TY

PE


55.1%

18.4%

18.4%

17.3%

10.2%

10.2%

7.1%

6.1%

4.1%

3.1%

2.0%

Figure 4: Frequency of Fraud Schemes


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

IT Controls

Notified by Law Enforcement

Surveillance/Monitoring

Document Examination

External Audit

Confession

By Accident

Account Reconciliation

Other

Management Review

Internal Audit

Tip

DE

TE

CT

ION

ME

TH

OD


47.4%

20.6%

6.2%

12.4%

1.0%

4.1%

2.1%

2.1%

1.0%

1.0%

1.0%

1.0%

Figure 5: Initial Detection of Occupational Frauds


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

Shareholder/Owner

Other

Competitor

Vendor

Anonymous

Customer

Employee

SO

UR

CE

OF

TIP

S


2.2%

4.3%

19.6%

6.5%

6.5%

50.0%

23.9%


Figure 6: Source of Tips

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

By Accident

Account Reconciliation

Management Review

Internal Audit

Tip

DE

TE

CT

ION

ME

TH

OD


53.3%

37.5%

21.7%

6.7%

5.0%

3.3%

0.0%

3.1%Organizations With Hotlines

Organizations Without Hotlines

21.9%

18.8%

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



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

$0

$50000

$100000

$150000

$200000

$250000

$300000

$350000

Other*Not-for-Profit*Government*Public CompanyPrivate Company

0%

10%

20%

30%

40%

50%

60%

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

$131,000

49.0%

37.8%

5.1% 3.1%

$300,000

5.1%

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

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

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


$220,000

$250,000

42.1%

23.2%

20.0%

14.7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%$377,000

$50,000

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


0% 5% 10% 15% 20% 25% 30%

Agriculture, Forestry, Fishing, and Hunting

Arts, Entertainment, and Recreation

Real Estate

Technology

Transportation and Warehousing

Utilities

Education

Services (Professional)

Retail

Services (Other)

Wholesale Trade

Construction

Government and Public Administration

Health Care

Other

Telecommunications

Oil and Gas

Manufacturing

Banking and Financial Services

IND

US

TR

Y


27.6%

12.2%

8.2%

7.1%

5.1%

4.1%

4.1%

1.0%

2.0%

1.0%

1.0%

1.0%

1.0%

1.0%

2.0%

7.1%

5.1%

5.1%

4.1%

Figure 10: Industry of Victim Organization


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Rewards for Whistleblowers

Job Rotation/Mandatory Vacation

Employee Support Programs

Surprise Audits

Proactive Data Monitoring/Analysis

Formal Fraud Risk Assessments

Dedicated Fraud Department, Function, or Team

Fraud Training for Managers/Executives

Fraud Training for Employees

Anti-Fraud Policy

Hotline

External Audit of Internal Controls overFinancial Reporting

Management Review

Independent Audit Committee

Management Certification of Financial Statements

Internal Audit Department

External Audit of Financial Statements

Code of Conduct

AN

TI-

FR

AU

D C

ON

TR

OL


90.9%

88.2%

82.8%

75.0%

70.3%

70.1%

69.4%

65.6%

61.4%

60.5%

56.8%

50.0%

45.3%

39.0%

35.3%

28.6%

17.6%

1.1%

Figure 11: Frequency of Anti-Fraud Controls


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

Independent Audit Committee 70.3% $100,000 $1,100,000 90.9%

Management Certification of Financial Statements 75.0% $100,000 $925,000 89.2%

Hotline 65.6% $112,000 $850,000 86.8%

Dedicated Fraud Department, Function, or Team 50.0% $79,000 $500,000 84.2%

Management Review 70.1% $107,000 $675,000 84.1%

Fraud Training for Managers/Executives 56.8% $113,000 $700,000 83.9%

Fraud Training for Employees 60.5% $106,000 $550,000 80.7%

Surprise Audits 35.3% $60,000 $240,000 75.0%

Anti-Fraud Policy 61.4% $100,000 $375,000 73.3%

Job Rotation/Mandatory Vacation 17.6% $74,000 $275,000 73.1%

Employee Support Programs 28.6% $67,000 $215,000 68.8%

Proactive Data Monitoring/Analysis 39.0% $100,000 $270,000 63.0%

Formal Fraud Risk Assessments 45.3% $114,000 $300,000 62.0%

External Audit of Internal Controls over Financial Reporting 69.4% $132,000 $270,000 51.1%

Internal Audit Department 82.8% $141,000 $265,000 46.8%

External Audit of Financial Statements 88.2% $150,000 $150,000 0.0%

Code of Conduct 90.9% $150,000 *

Rewards for Whistleblowers 1.1% * $200,000

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

Surprise Audits 35.3% 13 months 20 months 35.0%

Employee Support Programs 28.6% 13 months 20 months 35.0%

Hotline 65.6% 17 months 26 months 34.6%

Internal Audit Department 82.8% 18 months 26 months 30.8%

Independent Audit Committee 70.3% 18 months 25 months 28.0%

External Audit of Internal Controls over Financial Reporting 69.4% 18 months 25 months 28.0%

Job Rotation/Mandatory Vacation 17.6% 17 months 23 months 26.1%

Management Certification of Financial Statements 75.0% 18 months 24 months 25.0%

Management Review 70.1% 18 months 24 months 25.0%

Dedicated Fraud Department, Function, or Team 50.0% 18 months 24 months 25.0%

Formal Fraud Risk Assessments 45.3% 18 months 24 months 25.0%

Proactive Data Monitoring/Analysis 39.0% 18 months 24 months 25.0%

Anti-Fraud Policy 61.4% 18 months 22 months 18.2%

Fraud Training for Employees 60.5% 20 months 24 months 16.7%

Fraud Training for Managers/Executives 56.8% 20 months 24 months 16.7%

External Audit of Financial Statements 88.2% 20 months 16 months -25.0%

Code of Conduct 90.9% 20 months *

Rewards for Whistleblowers 1.1% * 20 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%

Lack of Internal Controls16.7%

Poor Tone at the Top16.7%

Other7.3%

Override of Existing Internal Controls33.3%

Lack of Competent Personnel in Oversight Roles2.1% Lack of Clear Lines of Authority

1.0%

Lack of Management Review15.6%

Lack of Independent Checks/Audits5.2%

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

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Other*Owner/ExecutiveManagerEmployee0%

5%

10%

15%

20%

25%

30%

35%

40%

ME

DIA

N L

OS

SP

ER

CE

NT

OF

CA

SE

S


$50,000

$116,000

$1,000,00034.4%

37.8%

24.4%

3.3%

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

*Other category had insufficient responses for median loss calculation.

0% 5% 10% 15% 20% 25% 30%

Legal

Finance

Information Technology

Marketing/Public Relations

Manufacturing and Production

Board of Directors

Warehousing/Inventory

Accounting

Operations

Customer Service

Purchasing

Other

Executive/Upper Management

Sales

DE

PA

RT

ME

NT

OF

PE

RP

ET

RA

TO

R


25.3%

18.7%

9.9%

8.8%

8.8%

6.6%

5.5%

5.5%

3.3%

2.2%

2.2%

1.1%

1.1%

1.1%

Figure 16: Department of Perpetrator—Frequency


Male 79.1%

Female20.9%


Figure 17: Gender of Perpetrator—Frequency

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000

Female

Male

GE

ND

ER

OF

PE

RP

ET

RA

TO

R

M E D I A N L O S S

$99,000

$245,000


Figure 18: Gender of Perpetrator—Median Loss

Never Charged or Convicted91.4%

Had Prior Convictions2.9%

Charged But Not Convicted4.3%

Other1.4%

Figure 19: Criminal Background of Perpetrator


6.6% 2.9%

Never Punished or Terminated89.1%

Previously Punished7.3%

Other3.6%

Previously Terminated1.8%

Figure 20: Employment Background of Perpetrator


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Civil Suit

Referral toLaw Enforcement

LE

GA

L A

CT

ION

TA

KE

N


79.3%

No

Yes

48.8% 51.2%

20.7%

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


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

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


58.2%

11.9%

10.4%

1.5%

6.0%

11.9%

Figure 22: Recovery of Victim Organization’s Losses


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

No Punishment

Perpetrator Was No LongerWith Organization

Other

Probation or Suspension

Settlement Agreement

Permitted or Required Resignation

Termination

AC

TIO

N T

AK

EN

AG

AIN

ST

PE

RP

ET

RA

TO

R


5.7%

6.8%

13.6%

12.5%

9.1%

60.2%

14.8%

Figure 23: Action Taken Against Perpetrator


figure 1: breakdown of cases by country disbursements check tampering payroll cash larceny cash on...

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