Employee Theft is on the Rise
The Association of Certified Fraud Examiners (ACFE), in its 2008 Report to the Nation on Occupational Fraud and Abuse, estimated that fraud costs U.S. businesses more than $600 billion annually. Furthermore, the report states:
- More than half of the frauds in the study caused losses of at least $100,000, and nearly one in six caused losses in excess of $1 million.
- 63% of fraud schemes were perpetrated for more than 12 months before detection, with more than 40% lasting two years or more.
- Employee fraud and abuse accounts for about 7% of total annual revenue, or about $4,500 per employee.
- Small businesses represent 38 percent of all frauds, but they are more vulnerable to loss.*
- Dishonesty schemes in a small business cause a median of $200,000 in losses — exceeding that of larger businesses.*
In another survey, 39% of asset misappropriations was the result of billing schemes. The cost of this fraud comes right off a company’s bottom line. Purchasing schemes involving kickbacks, accounts payable fraud involving ghost vendors, payroll and check fraud, or inventory theft can reduce corporate profits by millions of dollars.