| According to the Association of Certified Fraud | | | | largest type of occupational fraud by amount. |
| Examiners' "Report To The Nation On | | | | Recent examples of fraudulent statements are |
| Occupational Fraud And Abuse" (Report), | | | | Enron, Health South, World Com and other |
| "participants in the study estimate U.S. | | | | sensational frauds, which have been well publicized. |
| organizations lose 5% of their annual revenues to | | | | Occupational frauds are very hard to detect and |
| fraud. Applied to the estimated 2006 United | | | | most of them go undetected. According to the |
| States Gross Domestic Product, this 5% figure | | | | Report, the main detection tools are tips, accident, |
| would translate to approximately $652 billion in | | | | internal audit, external audit and notification by |
| fraud losses." Of course these organizations must | | | | police. The Report points out that tips though |
| pass on this cost to consumers. This translates | | | | anonymous hotlines is the most effective way of |
| into each of us paying approximately 5% extra | | | | detecting occupational frauds. This means you are |
| for fraud when we purchase a good or service. If | | | | the one we count on to detect these frauds. |
| the average household spends $40,000 for goods | | | | When you are suspicious that a fraud may be |
| and services each year, their annual cost of fraud | | | | happening in your workplace, do something about |
| is $2,000. | | | | it. If your employer has a hotline, use it. If not, |
| Part of stopping occupation fraud is understanding | | | | you can still provide an anonymous tip. Type out |
| it. The Report defines occupational fraud as, "The | | | | your suspicions and give it to a manager, who |
| use of one's occupation for personal enrichment | | | | you do not believe is involved. You can mail it, put |
| through the deliberate misuse or misappropriation | | | | it in his in-box or use some other method, which |
| of the employing organization's resources or | | | | will not identify you as the tipster. |
| assets." We all know that people steal from their | | | | What can you do to stop these frauds? Make |
| employers, even in very small amounts. Most of | | | | sure you don't commit them. This means the |
| us at some time in our lives have taken home a | | | | next time you need a few pencils at home, don't |
| few pencils, pads of paper, or perhaps some of | | | | take them from the office. You can buy them at |
| the product sold by our employer. We also have | | | | the store and feel good about it when you do. |
| heard about overstating of expense reports or | | | | This type of thinking, "I'm not hurting anyone", |
| the number of hours worked. These types of | | | | only leads to encouraging others to do the same |
| small frauds happen every day and cost us all | | | | or it lets you rationalize that taking something |
| billions of dollars each year. The Report breaks | | | | more expensive is ok. You did not get caught |
| occupational fraud into three categories: asset | | | | taking the pencils, so take something more |
| misappropriation, corruption and fraudulent | | | | expensive next time. Secondly, when you are |
| statements. | | | | suspicious that a fraud may be happening, use the |
| Asset misappropriation is the type of fraud we | | | | hotline. You don't have to be sure. Someone |
| are most familiar with and includes the ones listed | | | | skilled in investigating fraud will investigate and you |
| above. It is the largest type of occupational fraud | | | | won't get your fellow employee in trouble, unless |
| in number, but not total amount. Corruption | | | | they deserve it. Thirdly, learn more about this |
| includes frauds such as bribery or conflicts of | | | | type of fraud so you will know it when you see it. |
| interest. Fraudulent statements generally include | | | | You are the main defense against occupational |
| frauds relating to the organization's accounting | | | | fraud. |
| system and financial statements and are the | | | | |