Fraud: The Numbers that Will Blow Your Mind (& Break the Bank)
The numbers don’t lie. Unfortunately, if you’re like 95% of all business owners, your employees do.
This is fraud, by the numbers.
In 2018, the Association of Certified Fraud Examiners (ACFE) analyzed 2,690 cases of fraud. They found more than $7 billion in total losses.
Smaller organizations are nearly twice as a likely to suffer fraudulent losses.
Most fraud cases fall into one of three categories: Asset Misappropriation, Corruption, or Financial Statement fraud. The vast majority of those cases (83.5%) qualify as Asset Misappropriation, a scheme in which an employee steals or misuses an organization’s funds.
A typical organization loses 5% of all revenue to fraud. Chances are, that includes yours.
Internal control weaknesses are responsible for nearly half of all reported fraud cases. In other words, a large portion of fraudulent activity could be prevented with proactive measures.
Only 4% of perpetrators have a prior fraud conviction. Moral of the story? Just because an employee has a clean record doesn’t mean they won’t commit fraud, when given the opportunity.
…of perpetrators display at least one “Behavioral Red Flag” before/during their fraudulent activity. Red flags include: living beyond their means, being unusually close to a vendor or customer, and experiencing personal financial difficulties.
of corruption cases are perpetrated by someone in a position of authority, most commonly managers.
That’s not a typo. In most cases, defrauded businesses recover nothing.
of businesses are at risk of fraud…
…and 100% have the power to do something about it.
At Klein Hall, our financial experts take a sophisticated, proactive approach to preventing and investing fraud. We partner with businesses like yours to assess vulnerabilities, strengthen your internal controls, and detect fraudulent activity as it occurs.