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Length of Fraud
The Association of Certified Fraud Examiners (ACFE) issues a report to the nation every 2 years. This report is a global study on occupational fraud and abuse. The 2020 report can be found here.
According to the ACFE, the length, or duration, of a fraud can at times exceed 2 – 3 years before it is found.
The following quick video discusses the average duration of fraud and why understanding this is important to save your company money. Additionally, we discuss ways a business owner can mitigate internal control weaknesses.
Transcripts to the above video:
Today, we’re going to talk about the average length of fraud. Now per the association of certified fraud examiner, register and cash on hand tends to last about 12 months. Skimming, which is taken from the account receivable 18 months. Expense, reimbursements, billings 24 months. Check and payment tampering, 24 months. And payrolls wiping 30 months. That’s almost three years. Something to think about when you see these stats. Is these fraud schemes tend to last at least a year, if not more. Sometimes up to two to three years before they are caught. Now, how do you mitigate this? Well, the first responses is have proper segregation of duties on your internal controls. However, a lot of companies out there are small and so what do they do? The best thing to do if you’re a very small company and you can’t properly segregate. Monitor the controls, monitor the reconciliations, monitor the bank accounts and so forth. You must keep that part of the control within your grasp. So questions comments. Please send me feedback. You could email me a firstname.lastname@example.org working visit my website at hovlandforensic.com and I have been getting some responses and I appreciate those so keep them coming and we’ll have more fraud tips down the road. Thank you.
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