The 2020 Report to the Nations—the ACFE’s 11th study on the costs and effects of occupational fraud
Occupational fraud committed by individuals against the organizations that employ them—is among the costliest forms of financial crime in existence. There are more than 3.3 billion people in the global workforce,2 and nearly all of them have access to or control over some portion of their employers’ cash or assets. For the ones who decide to seek illegal gains, their workplace is, in many cases, the most logical and convenient target. While the vast majority of those 3.3 billion people will never abuse the trust placed in them by their employers, the small percentage who do can cause enormous damage. As this report illustrates, that damage could amount to trillions of dollars in losses each year.
This study contains an analysis of 2,504 cases of occupational fraud that were investigated between January 2018 and September 2019. This is a tiny fraction of the number of frauds committed each year against millions of businesses, government organizations, and nonprofits throughout the world. Yet this study represents the most comprehensive examination available of the costs, methods, victims, and perpetrators of occupational fraud. The data presented here was gathered through our 2019 Global Fraud Survey. Each Certified Fraud Examiner (CFE) who took part in the survey was presented with a detailed questionnaire consisting of 77 questions about a specific case of fraud they had investigated. These CFEs provided information on the method of fraud employed, the loss, the victim organization, the perpetrator, the means of detection, and the response by the victim organization after the fraud had been detected. We are deeply indebted to the CFEs who shared their knowledge and experiences to help us prepare this report.
The information presented in this study is drawn from cases that occurred in 23 different industry categories. These frauds affected large multinational organizations, small nonprofits, and every size and type of business or government agency in between. The fraudsters in these cases ranged from C-suite executives to entry-level employees. The lesson of this and our previous studies is clear: No organization is immune from occupational fraud, and these crimes can originate from anywhere within the organization.
The cases in our study occurred in 125 countries throughout the world, which also helps underscore the global nature of the threat posed by occupational fraud. Figure 1 on page 7 shows the number and percentage of cases from eight major geographical regions. (Because data in our study was gathered through a survey of CFEs, the number of cases in each region largely reflects the geographical makeup of ACFE membership. It should not be read to indicate that fraud is more or less prevalent in any particular region.)
We present this report with the hope that it will be of use to anti-fraud practitioners, organizational leaders, academic researchers, and the public at large. We have compiled a great deal of data about the methods, costs, and indicators of occupational fraud, along with valuable information on how these crimes are detected and how they might be prevented or mitigated. The amount of money lost to occupational fraud each year represents a staggering drain on the global economy. It directly impacts organizations’ abilities to create jobs, produce goods and services, and provide public services. The better we can understand how and why these crimes occur and how to fight them, the better we will be at directing the proceeds of commerce and state action toward the goals for which they were intended, rather than into the pockets of the fraudsters who prey on the system. We hope this study will contribute to the public understanding of these crimes; advance the common body of anti-fraud knowledge; and contribute to improved detection, deterrence, and investigation of occupational fraud.
The ACFE is the world's largest anti-fraud organization and premier provider of anti-fraud training and education. Together with more than 85,000 members, the ACFE is reducing business fraud worldwide and inspiring public confidence in the integrity and objectivity within the profession.