The ACFE’s Good News/Bad News on Fraud

Every couple of years, the Association of Certified Fraud Examiners publishes an extremely interesting study of fraud and financial abuse. If you haven’t seen it, it is a trove of interesting facts and figures. Although their current methodology requires one to be a bit cautious about the degree to which one generalizes from their data (Fraud examiners reported only the biggest cases they saw in the prior two years.), their findings remain both useful and fascinating.

The best news in this year’s report? Despite the continual discovery of rampant fraud in business, the annual estimated loss to fraud and abuse went down an entire percentage point since their previous study two years ago. The bad news? They still estimate that companies lose “conservatively” 5% of gross to fraud and financial abuse each year. That remains a staggering figure!

Interestingly, in companies with fraud or ethics training programs, the dollar amounts lost to fraud were typically 50% lower than in companies who provided neither type of training. That certainly speaks to the potentially whopping ROI for companies who develop credible ethics training programs.

If you are interested, a number of other findings from this year’s ACFE study have found their way into recent editions of my Weekly Ethics Thought. If you would like me to send those specific editions to you, just email me requesting them and I’ll be happy to get them out to you.

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