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Apr 09

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Fraud on the Rise

Economic crime is increasingly plaguing U.S. firms according to a recent survey by PWC.  Key findings include:

  • “45% of organizations in the U.S. suffered from some type of fraud in the past two years, more than the global average of 37%.
  • More than half of U.S. organizations that experienced fraud in the last two years reported an increase in the number of occurrences….
  • 24% of U.S. organizations that reported economic crime experienced accounting fraud in 2009. In 2011, this dropped to 16%. In 2014, accounting fraud increased back to 23%…
  • The external perpetrator of fraud is closing the gap on the internal perpetrator of fraud, with U.S. organizations reporting that economic crime is committed by external actors (45% of the time) almost as often as it’s committed by internal actors (50% of the time).
  • Most internal frauds are now perpetrated by middle management: 54% of internal frauds were committed by middle management
  • There’s been a rise in the number of frauds committed by middle management: 45% in 2011 v. 54% in 2014
  • There’s been a drop in the number of frauds committed by junior staff: 50% in 2011 v. 31% in 2014″

Another interesting item was the high usage of a whistleblower mechanism (86% of US organizations) and the associated positive reviews (83%) of the effectiveness of such a practice.  This article provides best practices for whistleblower hotlines.

 

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2014/04/fraud-on-the-rise/

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