Wednesday, July 25, 2012

ACFE's Asia Pacific 2012 Report to the Nations on Occupational Fraud and Abuse

The recent 2012 Report to the Nations on Occupational Fraud and Abuse  published by the Association of Certified Fraud Examiners' (ACFE) has some very interesting findings.  Specifically, for its Asia-Pacific region, the following research findings may be of interest to everyone. It is based on data compiled from a study of 338 cases of occupational fraud that occurred throughout the Asia Pacific region between January 2010 and December 2011:
  • Survey respondents in the Asia-Pacific region estimate that the typical organization loses five percent of its annual revenue to fraud.
  • The median loss caused by the 338 Asia-Pacific cases in our study was $300,000. This was significantly higher than the global median loss of $160,000.
  • The frauds in this report lasted a median of 12 months before they were detected.
  • Asset misappropriations were the most common type of occupational fraud, occurring in 80 percent of all cases. Financial statement fraud was the most expensive category, causing a median loss of $4.3 million.
  • Occupational frauds were much more likely to be detected by a tip than by management review, internal audit, or any other means. Forty-three percent of all cases were detected by a tip of some kind.
  • The anti-fraud controls that had the greatest impact on occupational fraud losses were surprise audits and hotlines. Both controls were associated with a loss reduction of more than 40 percent.
  • Fraud losses tend to rise with the authority of the perpetrator. Occupational frauds committed by owners/executives caused a median loss of $1 million. Losses caused by managers and employees were $242,000 and $200,000, respectively.
  • Seventy-six percent of occupational frauds in the Asia-Pacific region were committed by individuals working in one of five areas: sales, accounting, operations, executive/upper management and purchasing.
  • Approximately 85 percent of fraud perpetrators had never been charged with or convicted of a prior criminal offense.