ISLAMABAD: Organisations lose an estimated five per cent of their annual revenues to fraud, according to a 2012 study by the Association of Certified Fraud Examiners (ACFE). In its 2012 “Report to the Nations on Occupational Fraud and Abuse”, the ACFE found that fraud schemes are extremely costly. The median loss caused by occupational fraud cases came to around $140,000. More than one-fifth of the frauds involved losses of at least $1 million. Such schemes can continue for months or even years before they are detected — the frauds in the study lasted a median of 18 months before being caught.
Occupational fraud is a global problem. Though some findings differ slightly from region to region, most of the trends in fraud schemes, perpetrator characteristics and anti-fraud controls are similar regardless of where the fraud occurred. Small businesses are especially vulnerable to occupational fraud. Such organisations are typically lacking in anti-fraud controls compared with their larger counterparts, which makes them particularly vulnerable. Lastly, tips are key in detecting fraud. Occupational frauds are much more likely to be detected by a tip than by any other means. This finding reinforces the need for promoting awareness to foster an informed workforce.
Syed Zubair Ahmed
Published in The Express Tribune, November 6th, 2013.