• 5% of revenues are lost due to fraud. This applies to large and small entities but clearly will have a greater impact on small entities. 
  
  
• The best method of fraud detection is by tip-off (approximately 30% of cases), followed by management review (15%), internal audit (12%) and account reconciliation (just under 10%).  If you don’t have a tip-off or whistle blower policy, now is the time to do it. Most of the other detection methods come from active management control.
  
  
• Most frauds come from asset theft and the largest (by value) from financial mis-statement. 
  
  
• 90% of background checks did not pick up any indication of malfeasance and 82% of fraudsters had not been punished by their organisations. Something also to consider – and check with previous employers – when recruiting.  
  
  
• Fraud losses were detected much faster and the loss was 34% less in entities with strong controls.
  
  
• Those committing fraud typically showed some of these characteristics:
  
  
  • “Wheeler dealer” personalities
    
    
  • Financial problems
    
    
  • Living beyond their means
    
    
  • Control issues
    
    
  • Strong relationship with a vendor
    
    
  • Family difficulties such as divorce.

Don’t become a “fraud statistic” – analyse the risk factors listed above and take preventative action now!