The 2022 Association of Certified Fraud Examiners ( ACFE ) Report : Key Findings
According to the 2022 ACFE report ( 1 ) ( published in 2023 ), organizations lose 5 % of revenue to fraud each year . That is more than $ 4.7 trillion lost to fraud globally . This alarming figure not only shows an economic burden but also the destructive impact of occupational fraud on business such as reputational damage , legal , regulatory consequences , financial loss , investors trust .
The report identifies the average loss per case as approximately $ 1.8 million which is a huge financial impact for affected organisations but also a loss of trust , reputation , and market position .
Another interesting finding revealed by the report is that asset misappropriation remains the most common form of fraud , which can show up as a simple theft of office supplies or a complex embezzlement scheme , making it a challenge for organisations to detect and prevent . In these cases , the absence of controls like segregation of duties , effective oversight , and regular audits creates opportunities for fraud to go undetected .
Financial statement fraud , while less common than asset misappropriation , is often the most damaging , and its occurrence is closely linked to the quality of internal controls . In cases of financial statement fraud , the ACFE report notes that weak internal control environments , along with the pressure to meet financial targets , create an environment for fraud .
Additionally , the report highlights corruption as another significant category of occupational fraud which is in the middle in terms of both frequency and losses . This often involves activities like bribery , conflicts of interest , or illegal gratuities , further emphasizing the need for anti-corruption measures alongside other fraud prevention strategies .
Another significant aspect of the 2022 ACFE report is the critical role of internal controls in preventing and detecting fraud . According to the report , the lack of internal controls was the primary enabler of fraud in 29 % of the fraud cases in 2022 . Furthermore , the ability of the management to override existing controls was a significant factor in 20 % of the fraud cases . Meaning that , in organizations where internal
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The report identifies the average loss per case as approximately $ 1.8 million which is a huge financial impact for affected organisations but also a loss of trust , reputation , and market position .