Occupational fraud costing organizations billions


5% of revenues estimated to be lost annually

The latest report from the Association of Certified Fraud Examiners (ACFE), Occupational Fraud 2024: A Report to the Nations, revealed staggering figures: $3.1 billion lost to fraud.

This comprehensive study, now in its 13th edition, analyzed 1,921 actual fraud cases from 138 Cesar J. Mejia of Sol Schwartz & Associates is both a CPA and a Certified Fraud Examiner (CFE).countries and territories investigated by Certified Fraud Examiners (CFEs) between January 2022 and September 2023. According to the findings, organizations are estimated to lose 5 percent of their revenue to fraud each year.

Many of the cases scrutinized during the survey period are believed to have transpired during the peak of the COVID-19 pandemic. In the 2024 report, 53 percent of the cases were linked to at least one pandemic-related factor contributing to the occurrence of fraud. Additionally, median losses from frauds saw an increase for the first time since the 2016 report. Interestingly, fraud cases involving multiple perpetrators decreased, reversing the trend of increasing collusion observed in previous years.

John Gill, J.D., CFE, President of ACFE, said “Pandemic lockdowns prevented fraudsters from being able to work together to commit frauds. However, the economic pressures of the pandemic, combined with the opportunity of remote work and emptier offices, kept the frauds going.”

Key findings from the report include:

  • Fraud in government organizations: The median loss per fraud case in government organizations stood at $150,000, with corruption more likely to occur at the national level.
  • Cryptocurrency schemes: Though only 4 percent of the cases involved cryptocurrency, the 68 percent of perpetrators were terminated by their employers, and 72 percent of fraud cases referred to law enforcement led to convictions.study predicts this number to rise. Notably, 47 percent of the cases involved converting stolen assets into cryptocurrency, while 33 percent featured bribery or kickback payments made in cryptocurrency.
  • Regional comparisons: Latin America and the Caribbean region had the highest median loss per case ($250,000), followed by the Asia-Pacific region and Eastern Europe/Western/Central Asia region, both tied at $200,000 per case. Southern Asia (74 percent) and Eastern Europe/Western/Central Asia (71 percent) had the highest percentage of cases involving corruption.
  • Detection: On average, a fraud case lasted about 12 months before detection, with more than half of the cases being uncovered through employee tips.
  • Perpetrators: Male perpetrators constituted 74 percent of the cases, primarily aged between 31 and 50 years old (69 percent). Most perpetrators (87 percent) had no prior charges or convictions for fraud-related offenses.
  • Red flags: 84 percent of fraudsters exhibited at least one behavioral red flag, with living beyond their means being the most common (39 percent).
  • Case results: 68 percent of perpetrators were terminated by their employers, and 72 percent of fraud cases referred to law enforcement led to convictions.

Gill emphasized, “The report underscores the effectiveness of anti-fraud controls in reducing losses and expediting fraud detection. Many organizations adjust their controls post-fraud, but ideally, this report will prompt organizations to act preemptively.”

About the ACFE: Established in 1988 the Association of Certified Fraud Examiners stands as the world’s largest anti-fraud organization. With over 90,000 members, the ACFE endeavors to combat business fraud globally and foster public trust in the integrity and objectivity within the profession.

Cesar J. Mejia of Sol Schwartz & Associates is both a CPA and a Certified Fraud Examiner (CFE).  If you would like to discuss internal controls and fraud prevention at your organization with him, leave your contact information below and we will get back to you promptly.