Employee fraud is one of the most expensive liabilities businesses face, yet many companies still wait until they are a victim of such fraud before they implement fraud controls that should have been in place already in order to prevent it.
In fact, according to the Association Certified Fraud Examiners’ (ACFE) 2018 Report on Occupational Fraud and Abuse, internal control weaknesses are responsible for near half of all frauds.The 2018 ACFE Report also states that the average loss to a company per case as a result of fraud is $130,000 with 22% of all cases causing losses of over $1 Million. To paint an even bleaker
picture, the Report also states that companies continue to lose, on average, 5% of of their annual revenues to fraud. PwC’s 2018 Global Economic Crime and Fraud Survey also shows that, while there is growing awareness of the perils of economic crime, too few companies are fully aware of the individual risks they face.
When a company discovers a suspected fraud within the organization, action taken in the first few hours and days after discovery will significantly impact the course and/or outcome of a full investigation and may even make it or break it. Everyone within the organization should be aware of the fraud risk policy including types of fraud and the consequences associated with them. Those who are planning to commit fraud will know that management is watching and will hopefully be deterred by this.
The fact is, occupational fraud can result in huge financial loss, legal costs, and ruined reputations that can ultimately lead to the downfall of an organization. Therefore, hiring fraud experts that help companies establish effective anti fraud policies and procedures which can, in turn, significantly
reduce fraudulent activities from occurring or cut losses if a fraud already occurred is recommended.