2020 Report to the Nations – the ACFE’s 11th study on the costs and effects of occupational fraud

The Association of Certified Fraud Examiners (ACFE) has recently published the ‘2020 Report to the Nations – the ACFE’s 11th study on the costs and effects of occupational fraud’.

While the focus of this study is on ‘fraud’, there are a number of useful insights in relation to the value of whistleblowing platforms.

Key Findings (values quoted in USD)

Study highlights

·        2,504 cases

·        125 countries

·        Causing total losses of more than $3.6 Billion

Typical fraud Case

·        Lasts 14 months before detection

·        Causes a loss of $8,300 per month

Asset Misappropriation schemes most common and least costly

·        86% of cases

·        $100,000 median loss

Financial statement fraud schemes are the least common and most costly

·        10% of cases

·        $954,000 median loss

Organisations with fraud awareness training for employees were more likely to gather tips through formal reporting mechanisms

·        56% of tips with training

·        37% of tips without training

Detection

·        43% of schemes were detected by tip

·        Half of those tips came from employees

Channels

·        Telephone hotline and email were each used by whistleblowers in 33% of cases

·        Web forms and post also feature

Use of targeted anti-fraud controls has increased over last decade

·        Hotline (13%)

·        Anti-fraud policy (13%)

·        Fraud training for employees (11%)

·        Fraud training for managers/executives  (9%)

Parties to Whom Whistleblowers Report

Whistleblowers are most likely to report fraud to their direct supervisors, yet many will go to other parties, such as fraud investigation teams, human resources, or their coworkers. Therefore, it is important to provide all staff with guidance on how fraud allegations should be responded to and escalated.

Retrieved from:

https://www.acfe.com/report-to-the-nations/2020/