Occupational Fraud Causes Organizations to Lose 5% of their Revenue Every Year
Report to The Nations 2020 Global Study on Occupational Fraud and Abuse released by ACFE found that organizations lose 5% of their revenue every year due to occupational fraud. If projected towards the Gross World Product in 2019 of 90.52 trillion US dollars, the percentage of loss is equivalent to more than 4.5 trillion US dollars.
The data was obtained by conducting a study of 2,504 cases of occupational fraud from 125 countries that were investigated between January 2018 and September 2019. Occupational fraud affects large multinational organizations, small nonprofits, and every size and type of business or government agencies. Fraudsters in these cases range from C-Suite executives to entry-level employees.
The most effective fraud detection method
From the results of these studies it can be concluded that no organization is immune to fraud. To prevent loss or at least minimize losses, the organization would need to make an effort to detect fraud early on.
It is important for organizations to know the most common methods for detecting fraud effectively. The study found that tips were the most common method. More than 40% of fraud cases in this study were detected by tips.
Therefore, it is important for organizations to pay attention to the tip process so that they can effectively detect fraud. Organizations can apply reporting methods through a whistleblowing system.
Integrity Indonesia, with more than fifteen years of experience in the field of compliance have been trusted by clients to be a provider of the whistleblowing system, Canary WBS. Canary WBS enables the safe, secure, and anonymous reporting of activities such as misconduct, fraud, abuse, and other violations of the company’s policies. Canary also features case management tools which provides you with notifications, analysis and reporting management features. Do not compromise your organization. For more detailed information regarding Canary services, contact us today!