This week, PWC released their Global Economic Crime Survey [Click here to see the actual survey]. No company is immune from fraud risk. Significant motivators of fraud are economic pressure, rationalization and opportunity (often described as the “Fraud Triangle”). Although the study reports that account fraud has dropped to 16% compared to 24% in 2009, the study highlighted the following facts:
- 45% of U.S. respondents reported that their organization has been a victim of fraud in the past 12 months, compared to 35% in 2009
- The survey indicated that the typical fraudster is between 31 and 40 years old, has been with the organization 3 to 5 years, and has a college degree
- 40% of fraudsters in the U.S. are women
- Frauds with a magnitude of $100,000 make up 54% of frauds, compared to the 44% in 2009
- 10% of organizations or companies who reported fraud indicated that the fraud cost them more than $5 million
The cost of fraud within an organization goes beyond the actual direct costs of the fraud. The crime can tarnish a brand and hurt the reputation of the company, which could lead to a loss in share price or the company’s market value. It is important for companies to have a clear fraud policy, a strong detection system in place, and follow through on monitoring and investigating frauds.