First look at Occupational Fraud 2024: A Report to the Nations

Since the first Report to the Nation was published in 1996, the Association of Certified Fraud Examiners (ACFE) has surveyed thousands of Certified Fraud Examiners (CFEs) about the methods, costs and effects of occupational fraud. Now in its 13th edition, the Occupational Fraud 2024: A Report to the Nations provides an inside look at how fraud is committed, detected and prevented in organizations around the world. The data contained in this report can help fraud examiners benchmark their fraud risk management programs and implement necessary controls to prevent or minimize losses.

“What makes the Report to the Nations so valuable is that it was built on the information provided by the CFEs who fight fraud every day,” says ACFE CEO John Warren, J.D., CFE, and co-founder of the report. “It’s because of their shared case findings that we can create this tremendous resource.”

While the full report launches later this month, here’s your first look at the findings from the world’s most trusted report on the global state of occupational fraud.

THE SCHEMES

Among the cases in our study, asset misappropriation was the most common but least costly form of occupational fraud, accounting for 86% of cases and causing a median loss of $120,000. In contrast, financial statement frauds are the least common category of fraud, but the costliest. Only 5% of cases involved financial statement fraud, but they caused a median loss of $766,000.

Almost half of all reported cases included corruption (48%), making it the most common scheme in every global region.

Here are the highest-risk asset misappropriation sub-schemes, based on the cases studied:

WHO COMMITS FRAUD

Eighty-four percent of perpetrators in our study displayed at least one behavioral red flag before their frauds were detected. Also, certain demographic characteristics were detected and associated with more frequent and costly occurrences of occupational fraud:

Median losses for frauds committed by owners or executives were more than seven times greater than those carried out by employees.

• Employees – $60,000
• Owners/executives – $459,000

Frauds committed by three or more perpetrators caused median losses more than four times greater than those committed by a single perpetrator.

• 1 perpetrator – $75,000
• 3+ perpetrators – $329,000

More than half of cases originated in these five departments:

• Operations – 14%
• Accounting – 12%
• Sales – 12%
• Customer service – 9%
• Executive/upper management – 9%

Several factors affect how organizations respond to the frauds they discover. Whether they discipline internally or take external legal action, the role of the perpetrator, the type of scheme and the amount of losses all contribute to their course of action.

Consistent with past report findings, owners/executives are least likely to be punished for fraud, while staff-level employee are most likely to be terminated. And of the 57% of cases that resulted in criminal referral, asset misappropriation schemes like check and payment tampering, and cash larceny were the most referred and most likely to find success without the need for trial.

Our study shows that anti-fraud controls in organizations are associated with lower fraud losses and faster fraud detection. More than half of occupational frauds occurred due to lack of internal controls or an override of existing internal controls. Eighty-two percent of victim organizations modified their antifraud controls following the detection of fraud.

The ACFE’s Occupational Fraud 2024: A Report to the Nations will be available for download in March at ACFE.com/RTTN. Along with the full digital report, additional resources will be available for anti-fraud professionals to use in benchmarking, to share internally with management and their teams, and to implement or improve fraud prevention and detection best practices. For the first time since its creation, the report will also include guidance on how best to use and share the findings. Visit ACFE.com/RTTN to find the full 2024 report, accompanying infographics, data and informational slides.