AUSTIN, Texas — Despite stepping up anti-fraud control efforts, many businesses are still victims of fraud abuse.
According to the Association of Certified Fraud Examiners' 2006 Report to the Nation on Occupational Fraud and Abuse, U.S. organizations lose an estimated 5% of annual revenues to fraud–representing some $652 billon in losses.
The report also finds that small businesses are often hit hardest with the median loss by organizations with fewer than 100 employees averaging $190,000 per incident. This was higher than the median loss in even the largest organizations. The most common occupational frauds in small businesses involve employees fraudulently writing company checks, skimming revenues and processing fraudulent invoices.
One general contributing factor to the higher than average fraud-induced losses at small businesses is that a poor job is done in proactively detecting fraud. Less than 10% of small businesses had anonymous fraud reporting systems and less than 20% had internal audit departments, conducted surprise audits, or provided fraud training for their employees and managers.
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