9 Types of Industries Affected by Fraud

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Last month the public was flooded with headlines about allegations of fraud against two tech and entertainment industry giants, namely General Electric and Walt Disney Co. Both were accused of falsifying their financial statements with losses of up to millions of US dollars. Until now, the SEC is still checking the posted allegations on both of them. Regardless of whether the report is true or not, historically speaking, fraud never Fraud has never shown mercy on any of its prey even large companies with complete anti-fraud measures can become victims.

Report to The Nations 2018 by ACFE revealed that in a 22-month period from 2016-2017, fraud-caused average losses experienced by both large and small companies reached more than 7 billion US dollars. ACFE conducted case studies of fraud in organizations in 125 countries around the world. The study also found three types of fraud that often occur in companies, which are corruption, misuse, and financial statement fraud.

Read Also:

GE’s Alleged Fraud Scandal: More Serious than Enron’s

Walt Disney Co. Is Alleged of Inflating Financial Statements

In corruption cases, 70% of the perpetrators are individuals who have the authority, such as managers, owners or executives. The longer the time taken to detect the fraud, the greater the loss experienced by the company will be.

In the study, ACFE also examined fraud cases based on the type of victim companies’ industries. Here are the nine industries:
1. Financial services
As many as 338 cases were found, with corruption being the most common type of fraud. The average loss reached 110,000 US dollars
2. Manufacturing
As many as 201 cases were found, with corruption being the most common type of fraud. The average loss reached 240,000 US dollars
3. Government
As many as 184 cases were found, with corruption being the most common type of fraud. The average loss reached 12,000 US dollars
4. Health services
As many as 149 cases were found, with corruption being the most common type of fraud. The average loss reached 100,000 US dollars
5. Retail
As many as 104 cases were found, with non-cash being the most common type of fraud. The average loss reached 50,000 US dollars
6. Education
As many as 96 cases were found, with corruption being the most common type of fraud. The average loss reached 68,000 US dollars
7. Insurance
As many as 87 cases were found, with corruption being the most common type of fraud. The average loss reached 153,000 US dollars
8. Energy
As many as 86 cases were found, with corruption being the most common type of fraud. The average loss reached 300,000 US dollars
9. Technology
As many as 62 cases were found, with corruption being the most common type of fraud. The average loss reached 150,000 US dollars

 

 

 

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