About Fraud

Fraud is a fact of life.  It is all around us, like the common cold.  There is no "cure", but there are steps we can take.      What is Fraud?

The Association of Certified Fraud Examiners (ACFE) defines fraud and abuse as "the use of one's occupation for personal enrichment through the deliberate misuse or misappropriation of the employing organization's resources or assets."  According to the ACFE's Report to the Nation on Occupational Fraud and Abuse, fraud and abuse costs U.S. organizations more than $994 billion annually.  Small businesses are the most vulnerable.  The average organization loses about 7% of its total annual revenue to fraud committed by its own employees.  The most costly abuses occur in organizations with less than 100 employees.

Fraud can take the form of theft of assets, false financial reports, bribery, and corruption.  Common fraud schemes include stealing cash collected, altering bank deposits, forging checks, payments to fictitious vendors, kickbacks, and theft of inventory.

Click here for Fraud Resources for your business.

  

The best time to stop a fraud is before it happens!  A CFE can help.

• Have a Fraud Check-Up
• Have an independent review of the cash accounts and bank statements
• Establishing policies and procedures (internal controls) to prevent significant fraud from occurring

Fraud Detection

Sometimes it is hard to believe that fraud is happening in your organization.  How could one of your most trusted employees or co-workers be committing fraud?  But that is exactly who commits fraud.  They have the opportunity.  They have your trust!

If you have a sinking feeling that fraud may be occurring in your organization, it probably is.  Take action as soon as you suspect fraud.  Allowing a suspected fraud scheme to continue, impacts every employee and every aspect of the organization. 

Fraud Investigations

If you or your organization is the victim of fraud, you may lose significant amounts of money, and, in some cases, your good name.  A fraud investigation can be the first step in bring the perpetrator to justice, preventing a future fraud, and obtaining restitution. 

A fraud investigation determines whether fraud has taken place and detects evidence if fraud has occurred.  Most fraud investigations begin with a meeting between the CFE and the victim.  The victim explains to the CFE why they suspect fraud has taken place and hands over any evidence.  A fraud investigator will use this initial information to find more evidence.

Fraud Reports

Based upon the evidence gathered during the investigation the CFE writes a report which includes the scope of the investigation, predication, background information, description of the fraud scheme, findings, evidence, conclusion and the amount of the fraud loss.   The fraud report can be used for a fidelity bond claim, civil or criminal proceedings, or restitution.

The CFE testifies to the facts associated with their findings, based upon the written fraud report.   The fraud examiner testifies at the criminal trial.  The testimony includes the scheme used to commit the fraud and amount of fraud loss.