David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of fraud investigation, forensic accounting, and marital dissolution services in Philadelphia and the Delaware Valley.

Every two years, the Association of Certified Fraud Examiners (ACFE) commissions a survey of fraud in the United States and abroad. The ACFE recently released its 2024 study entitled “Occupational Fraud 2024 – A Report to the Nations”.

Over the next several weeks, I will discuss some of the key findings from the 2024 report. Up first, some general observations regarding fraud:

• The ACFE study estimates that the typical business/organization (including non-profit organizations) is losing about 5 percent of revenue each year to fraud;
• The median loss from fraud is $145,000. This is up 24 percent from the $117,000 median loss identified in the 2022 Report and up 16 percent from the $125,000 median loss identified in the 2020 Report;
• Twenty-five percent of all frauds result in a loss of over $750,000;
• The median duration of reported frauds is 12 months, the same as in 2022 and down 14 percent from the median duration of frauds identified in the 2020 Report;
• Overall, the 10-year trend which had shown frauds were being caught faster and resulting in smaller overall median losses, appears to have levelled out – resulting in higher overall median losses versus the last two reports;
• Smaller businesses (those with fewer than 100 employees) experienced a median loss of $141,000, surpassed only by very large businesses (those with more than 10,000 employees) whose median losses of $200,000 were influenced by financial statement fraud which often results in very large losses;
• Asset misappropriation schemes (frauds involving the theft of cash, inventory, supplies, equipment, or other company assets) remained the most common scheme and rose to 89 percent of all fraud schemes (versus 86 percent in the 2022 and 2020 Reports). Median asset misappropriation losses rose to $120,000 (versus $100,000 in the 2022 and 2020 Reports);
• Financial statement fraud remains the least common scheme at 5 percent (versus 9 percent in the 2022 Report and 10 percent in the 2020 Report) but results in the highest losses – $766,000 (up 29 percent from the $593,000 loss per fraud in the 2022 Report).
• Internal control weaknesses, including inadequate separation of duties, were responsible for nearly 51 percent of all frauds reported in the 2024 Report (versus 49 percent in the 2022 Report and 33 percent in the 2020 Report);
• Four percent of frauds discussed in the 2024 Report involved cryptocurrency (down 50 percent from the 2022 Report) with 33 percent of those frauds involving bribes and/or kickbacks paid in cryptocurrency and 47 percent of those frauds involving misappropriated assets being converted to cryptocurrency.
• The 2024 Report identified 18 different anti-fraud controls that companies had implemented (I’ll discuss these in greater detail in a later blog article). It found that every control implemented resulted in a reduction in both the duration and amount of fraud.

My next blog article will discuss how frauds are detected and the characteristics of the people who commit fraud.

About David Anderson & Associates

David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley. The experienced professionals at David Anderson & Associates provide forensic accounting, business valuation, fraud investigation, fraud deterrence, litigation support, economic damage analysis, business consulting and outsourced CFO services. Company principal David Anderson is a forensic accounting expert in Philadelphia who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Valuation Analyst, and a Certified Fraud Examiner in Philadelphia.

If you require the services of a Certified Valuation Analyst in Philadelphia or any other forensic accounting services in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at david@davidandersonassociates.com.