Friday, October 14, 2011

Occupational Fraud

The pie charts below were created using Google’s Chart Tools.

The first chart shows the approximate frequency in 2010 of the three principle methods of occupational fraud (fraud against a company committed by employees). Asset misappropriation is where an employee steals or misuses company resources. Corruption is where an employee corrupts a business transaction for benefit. And, financial statement fraud is the misstatement of financial reports to mislead users.

The second chart shows the approximate frequency in 2010 of the five principle ways in which employees misappropriated company assets for the employee benefit.

The third chart shows the five most frequent methods in 2010 that occupational fraud was detected. Receiving a tip about the fraud was by far the most frequent (40% of the detections). Three of the five most frequent detection methods can be initiated by the company (management review; internal audit; and account reconciliation). “Other” includes: document examination; external audit; surveillance/monitoring; notified by police; confession; and IT controls.

The data in the graphs were obtained from the “Report to the Nation on Occupational Fraud and Abuse – 2010” published by the Association of Certified Fraud Examiners. Click here to go to the report (PDF file).

Frequency of Major Types of Occupational Fraud

Asset Misappropriation Types

Initial Detection of Occupational Fraud

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