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Q. According to a recent report, the typical U.S. organization loses 6 percent of its annual revenues to fraud. In dollars, that translates to:
a. $120 million annually
b. $360 million annually
c. $660 billion annually
d. $870 billion annually |
The answer is c
The "2004 Report to the Nation on Occupational Fraud and Abuse," published by the Association of Certified Fraud Examiners (CFE), covered 508 cases of occupational fraud totaling over $760 million in losses. Applied to the U.S. Gross Domestic Product for 2003, this translates to about $660 billion in total losses.
The cases in the report had four criteria:
 They involved occupational fraud.
The fraud occurred within the last two years.
The investigation were completed.
The Association of Certified Fraud Examiners was reasonably sure the perpetrators had been identified.
The first "Report to the Nation," published in 1996, was conceived by Joseph T. Wells, a white-collar criminologist for the FBI and founder of the Association of Certified Fraud Examiners.
In more than half of the 2004 report's cases, the fraud was detected by a tip (60 percent came from employees, 20 percent from customers, 16 percent from vendors and the rest came from other sources). Because of this fact, the report "strongly supports" establishing a confidential reporting mechanism, such as an anonymous hotline.
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