Every other year the Association of Certified Fraud Examiners provides their “Report to the Nation on Occupational Fraud and Abuse” and the 2006 report estimates businesses lose in excess of $600 billion to fraud annually. With losses of this magnitude, can a business afford to stand idly by and assume it won’t happen to them?

WHAT IS OCCUPATIONAL FRAUD?
The term “occupational fraud” may be defined as: “The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets”. Occupational fraud can also be broken into three major categories: Misappropriation of Assets; Corruption and Fraudulent Financial Reporting. Misappropriation of Assets is the most common type of occupational fraud and Fraudulent Financial Reporting is the most costly on average.

WHO ARE THE VICTIMS?
In a broad sense everyone suffers when fraud occurs but more specifically it is small businesses that suffer a disproportionate amount of losses. While Public Companies, Not-for-Profit and Governmental entities all suffer fraud losses every year, it is small businesses, defined as entities with fewer than 100 employees, which suffer the most occurrences and the greatest average losses due to fraud.

VALUE CONSIDERATIONS
A company willing to take a proactive approach to managing their fraud risk stands to gain a competitive advantage by working to eliminate the financial and ethical drain of fraud and by enhancing the companies perceived and demonstrated commitment to ethical business dealings.    

WHAT CAN BE DONE?
There are several things a business can do to combat fraud ranging from assessing the company’s fraud risks and related internal controls to investigating and prosecuting offenders. Stambaugh Ness can assist you in all phases of developing a comprehensive and effective fraud risk management initiative including taking steps to detect and prevent fraud.

OUR EXPERIENCE
The Stambaugh Ness Risk Management team has extensive experience in assessing business risks and analyzing the design of the internal controls. Our team members carry multiple certifications in a variety of disciplines including internal auditing, information systems and fraud examination. Given the diverse skill sets and cumulative experience of the Stambaugh Ness Risk Management team, we are confident we can provide your business with an effective program to safeguard your company’s assets and profitability.

If you wish to take a proactive approach to managing the potentially significant fraud risks facing your business, contact the Stambaugh Ness Risk Management team today.