Together, Reducing Fraud Worldwide

  • International Edition

     

    Europe

     

    The European edition of the Report to the Nations on Occupational Fraud & Abuse focuses exclusively on the 157 cases of occupational fraud from Europe that were included in the global study. This document is intended as a companion to the global study. The goal of the European report is to provide greater focus and detail on the costs and methods of fraud that occurred in Europe, as well as information about the victims and perpetrators of those frauds. Readers should note that our global survey asked respondents to provide loss figures in U.S. dollars. However, for purposes of this report, we have converted the loss figures to euros for the convenience of the reader. We used the average conversion rate for the relevant survey period (January 2008 through December 2009), which was $1 to €.7013.

     

    Summary of Findings

     

    Survey respondents in Europe estimate that the typical organisation loses five percent of its annual revenue to fraud.

    The median loss caused by the 157 European cases of occupational fraud in our study was €420,780 ($600,000). This was significantly higher than the median loss in any other region.

    The occupational frauds reported in this study lasted a median of 18 months before they were detected.

    The most common type of occupational fraud is asset misappropriation, which occurred in 78% of all cases. Fraudulent financial statements caused the highest median loss in our study (€16,410,420), though there was a small sample of only 10 cases.

    Occupational frauds were much more likely to be detected by a tip than by any other means. We found that 40% of all frauds were detected by a tip, while internal audit (17% of cases) and management review (16% of cases) ranked second and third, respectively.

    Small organisations were disproportionately affected by occupational fraud. The median loss for organisations with fewer than 100 employees was €613,638, while the median loss for organisations with more than 10,000 employees was €231,429.

    The median age of a fraud perpetrator in this study was 43 years old. In addition, perpetrators tended to be male (82% of cases), to be managers (50% of cases) and to have a university degree or postgraduate degree (55% of cases).

    Seventy-three percent of all fraud perpetrators worked in one of six departments: accounting, executive/upper management, operations, sales, purchasing and finance.

    Approximately 82% of the perpetrators in this study had never been charged with or convicted of a prior fraud-related offence.