The Association of Certified Fraud Examiners, a world leader in anti-fraud training, just released their 2016 Report to the Nations on Occupational fraud and Abuse Canadian Edition.
The 28 page report contains information on the specific fraud schemes, detection techniques, fraud perpetrators, case results and more. The ACFE found that nearly 90% of fraud cases in Canada were asset
Misappropriation schemes. Misappropriation schemes Asset misappropriation fraud involves third parties or employees in an organization who abuse their position to steal from it through fraudulent activity. The loses to a company amounted to 173,000 USD per scheme.
The most common methods fraudsters used to conceal their crimes was by altering physical documents, destroying physical documents, creating fraudulent transactions in the accounting system and by creating fraudulent physical documents.
The top 3 ways these fraudsters were discovered was by a Tip, Management Review and internal audit.
Surprisingly, smaller companies were the most common victims of fraud, representing 30%. They also suffered the greatest median loss of $300,00 USD.
Interestingly, only 19.5% of fraud was committed by owner or executives, but these cases resulted in a median loss of $835,000 USD. While 45.1% of fraud was committed by employees but resulting in a median loss of $110,00 USD
Here’s some other interesting points
- 65% of the time the perpetrator was male
- The top 3 sources of occupational fraud was the sales department, operations and accounting department.
- Male fraudsters causes a median loss of $180,00 USD while females $85,000.
Only 4.1% of Canadian fraudsters had ever been convicted of a fraud related offense. Which may be due to the fact the employers rarely report fraudsters to law enforcement. They often times decide to fire them instead.
This bring up another important point on the efficacy of pre-employment screening. Conducting a criminal background check without a previous employment reference check may prove pointless.
Thank you to the ACFE for another in-depth look at fraud in the workplace. We encourage everyone to click here and read the entire report.
You might to also download a free Fraud Prevention Check-Up.
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