Challenges in detecting fraud identified.

• Author: Ladd, Scott
• Position: CORPORATE FRAUD

New research by the Association of Certified Fraud Examiners (ACFE) found that identifying a perpetrator of corporate fraud is no easy task. In most cases, he or she has no previous record of criminal charges or convictions. The study determined that the typical offender is between the ages of 31 and 45, and more likely to be a man than a woman.

While it may be difficult to pinpoint someone who has committed or intends to commit fraud, the organization examined a broad range of criteria that might be helpful in developing a successful profile to deter future activity. Behavorial red flags, tenure at a particular organization and educational background are among those characteristics that can assist in limiting fraud.

The group's findings, in its 2010 Report to the Nations on Occupational Fraud and Abuse, were drawn from the results of a survey of Certified Fraud Examiners (CFEs) involved in investigating fraud allegations and cases between January 2008 and December 2009. In all, 1,843 cases of fraud were studied.

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Among the report's key findings:

* High-level perpetrators cause the greatest damage to their organizations. Frauds committed by owners or other senior executives are three times more costly than frauds committed by managers and more than nine times as costly as employee frauds.

* Fraud offenders were likely to be found in one of six departments--accounting, operations, sales...