Employee fraud infographic

Occupational fraud happens to businesses of all sizes, in all industries. Internal fraud perpetrated by an employee, manager or executive against his or her own company costs businesses big money.

How much are businesses losing?

• Global losses to occupational fraud are more than $3.6 billion.
• Organizations lose 5% of their revenue to fraud every year.
• $125,000 is the median loss per case.

Who’s committing employee fraud?

• 72% of fraudsters are men.
• 53% are between the age of 31 and 45.
• 64% have a university or higher degree.
• 76% are employees or managers.
• 20% are owners or executives.
• 13% had poor performance evaluations.

More than 50% of fraud committed is committed in four departments.

• Operations (15%)
• Accounting (14%)
• Executive/upper management (12%)
• Sales (11%)

There are three typical fraud schemes.   

•  Asset misappropriation (86%)
  - Billing schemes, fictitious or inflated invoices, larceny
• Corruption (43%)
  - Extortion, bribery, conflicts of interest
• Financial statement fraud (10%)
  - Overstating or understating net worth/net income

Most fraud is concealed via documentation.  

• 40% created fraudulent physical documents.
• 36% altered physical documents.
• 27% altered electronic documents or files.
• 26% created fraudulent electronic documents or files.

Smaller businesses feel more pain. *

• Highest median losses ($150,000)
• Billing schemes 2x more common
• Payroll schemes 2x more likely
• Check and payment tampering schemes 4x more common
  *100 or less employees

Most common fraud prevention controls…

• External audit of financial statements
• Code of conduct
• Management certification of financial statements
• Management review
• External audit of internal controls

Why are internal controls ineffective?

• Lack of internal controls (32%)
• Override of existing internal controls (18%)
• Lack of management review (18%)
• Poor support from executives (10%)
• Lack of competent personnel in oversight roles (6%)

(Source: Association of Certified Fraud Examiners, “Report to the Nations: 2020 Global Study on Occupational Fraud and Abuse”)