2022 Global Study on Occupational Fraud and Abuse

By:  Mark Gardiner, Partner, CPA, CFE

The Association of Certified Fraud Examiners released their 2022 edition of the Report to the Nations fraud study last spring. This study contains over 2,110 cases of occupational fraud that were investigated between January 2020 and September 2021. This study published each year by the Association of Certified Fraud Examiners is a great tool for fraud investigators, law enforcement or other involved in trying to catch fraudsters or working on preventing fraud. 

How is fraud detected in the United States and Canada?

By a tip                                                                        32%

Internal audit                                                               18%

Management review                                                   16%

By accident                                                                 7%

Surveillance/monitoring                                               5%

Document examination                                               5%

Automated transactions/data monitoring                    5%

Account reconciliation                                                 4%

External audit                                                              4%

Notification by law enforcement                                 2%

Confession                                                                  1%

Other                                                                           1%

When the study discusses anti-fraud controls that are the most commonly used in the United States and Canada, 72% of the companies polled used an external audit of the financial statements. But yet, this method only detects 4% of the fraud. Number 7 on the controls most often used as an anti-fraud control are “Hotlines”. Hotlines are dedicated phone lines where people can call anonymously to report possible irregularities going on at their organization or provide “tips” on possible fraud occurring. 63% of the companies polled used this method. I would think “Hotlines” would be higher up the list, especially since tips are the most common method of detection. (Percentages will not add to 100% due to many companies using multiple anti-control methods).

If you have any questions on how to protect your organization against fraudulent behavior, feel free to contact any of our employees. At Gardiner + Company, we have four Certified Fraud Examiners on our staff.