© 2016 Association of Certified Fraud Examiners, Inc.
Report to the Nations on Occupational Fraud and Abuse
© 2016 Association of Certified Fraud Examiners, Inc.
Report to the Nations
Biennial study: 1996 – 2016 Occupational Fraud
• Costs• Methods• Detection• Victims• Perpetrators• Case Results
Practitioner Focused
© 2016 Association of Certified Fraud Examiners, Inc.
Global Fraud Survey• Online survey
• 41,788 CFEs• 2,410 usable responses
• Actual case investigated in last 2 years• 81 questions plus sub-questions• Respondents:
• Median 10 years’ fraud examination experience• 57% investigated > 5 cases
• 56% in house• 26% professional services• 13% law enforcement
• Review and analysis by ACFE Research
© 2016 Association of Certified Fraud Examiners, Inc.
IFP Database Approaching 10,000 records 421 columns of data >1.3 million populated data cells Tremendous amount of unmined
information Organized/scrubbed and formatted for
research purposes
© 2016 Association of Certified Fraud Examiners, Inc.
IFP Dataset
Scheme types (20) $ losses Duration Concealment
techniques (14) Detection methods
(11) Org. type, size and
industry Anti-fraud controls
(18)
Control weaknesses Countries (>100) Perp employment
data Perp demographics Behavioral red flags
(17) Non-fraud misconduct
(13) Case results Recoveries
© 2016 Association of Certified Fraud Examiners, Inc.
Behavioral Red Flags
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%
Instability in Life Circumstances
Complained About Lack of Authority
Excessive Family/Peer Pressure for Success
Other
Past Legal Problems
Social Isolation
Past Employment-Related Problems
Excessive Pressure from Within Organization
Refusal to Take Vacations
No Behavioral Red Flags
Complained About Inadequate Pay
Addiction Problems
Irritability, Suspiciousness, or Defensiveness
Divorce/Family Problems
Control Issues, Unwillingness to Share Duties
"Wheeler-Dealer" Attitude
Unusually Close Assoication with…
Financial Difficulties
Living Beyond Means
PERCENT OF CASES
BEHA
VIO
RAL R
ED F
LAG
Behavioral Red Flags Displayed by Perpetrators
2016
2014
2012
© 2016 Association of Certified Fraud Examiners, Inc. 7
Position of Perpetrator Based on Gender
© 2016 Association of Certified Fraud Examiners, Inc. 8
Behavioral Red Flags Based on Perpetrator’s Gender
© 2016 Association of Certified Fraud Examiners, Inc. 9
Non-Fraud-Related Misconduct
© 2016 Association of Certified Fraud Examiners, Inc.
Scheme Combinations
4.8%
3.5%
8.6%
25.6%
57.4%
15.9%
7.3%
16.8%
30.2%
29.7%
0% 10% 20% 30% 40% 50% 60% 70%
Five+
Four
Three
Two
One
PERCENT OF CASES
NU
MBE
R O
F SC
HEM
ESNumber of Different Fraud Schemes Utilized
FSF Cases
All Cases
© 2016 Association of Certified Fraud Examiners, Inc.
Scheme Combinations
3.4%
7.8%
13.4%
13.4%
14.7%
15.1%
15.5%
18.5%
25.0%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Register Disbursements
Payroll
Cash Larceny
Check Tampering
Skimming
Expense Reimbursements
Cash on Hand
Billing
Non-Cash
PERCENT OF CASES
SCHE
ME
TYPE
Asset Misappropriation Schemes Utilized in Addition to FSF
© 2016 Association of Certified Fraud Examiners, Inc. 12
Party to Whom Whistleblower Initially Reported
© 2016 Association of Certified Fraud Examiners, Inc. 13
Collusion Based on Perpetrators’ Relationship to Victim
© 2016 Association of Certified Fraud Examiners, Inc. 14
The Impact of Collusion
© 2016 Association of Certified Fraud Examiners, Inc. 15
Collusion Based on Perpetrators’ Relationship to Victim
© 2016 Association of Certified Fraud Examiners, Inc. 16
Initial Detection of Occupational Frauds
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