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.