Your organization is at higher risk for occupational fraud than you might think. U.S. organizations lose more than $652 billion annually to fraud perpetrated by an employee, often a manager or executive. Victims include private or public companies, not-for-profits, governmental agencies, and any other kind of organization where managers and employees have access to financial or material assets.

One of the most challenging aspects of occupational fraud is that the perpetrators are usually people who have no prior criminal record. Well-run organizations use background checks to minimize risk in hiring, and prior infractions are generally grounds for refusing to hire a person. Yet people with previously clean histories who have earned trust in their positions may abuse that trust, using their privileged access to steal. … Continue reading

The first question on the mind of business owners, executives, and managers whose organizations have been victimized by fraud is how. Understanding the factors that cause an individual to commit an act of fraud can help companies avoid becoming repeat victims and put systems in place to prevent such acts from occurring.

Occupational fraud is defined as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” Occupational fraud schemes are clandestine. They violate the perpetrator’s fiduciary duties to the victim organization. They are committed for the purpose of benefiting the perpetrator. And they cost victim organizations assets, revenue, and/or reserves. In fact, U.S. companies will lose 5% of their annual revenue to occupational fraud this year.

For good reason, prevention of occupational fraud is at the center of enterprise risk management strategies. … Continue reading

Avoiding the losses that result in cases of fraud is not a matter of luck or good fortune. Strategic fraud prevention programs, strategies, and processes form the front line of fraud defense by identifying and filling gaps before losses happen.

The Association of Certified Fraud Examiners (ACFE) has a valuable resource available to help assess the health of your existing fraud prevention processes. Known as the ACFE Fraud Prevention Check-Up, the self-administered ‘check-up’ can give you a candid view into your company’s vulnerability to fraud and identify major gaps in your processes. … Continue reading

In movies and television it’s easy to spot the criminals.  In real life, and particularly when it comes to fraud, this is not the case.  In occupational fraud, it’s especially difficult because the crimes are committed by people you have entrusted to represent your organization.  These are people you know and trust; not masked characters lurking in the shadows.

Despite this, there are a number of commonalities among fraudsters, and specific trends in their crimes.  Awareness of demographic information and the behavioral trends surrounding fraud perpetrators is a crucial component of uncovering occupational fraud, which has grown into a potential $3.5 trillion a year global crime.  … Continue reading