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

This blog is the fourth in a series of six posts.

This blog continues blog continues my discussion of the Association of Certified Fraud Examiners (ACFE) “Occupational Fraud 2026 – A Report to the Nations”. This week I focus on corruption:

Transparency International, the global coalition against corruption (transparency.org) defines corruption as:

“The abuse of entrusted power for private gain. It can be classified as grand, petty, and political, depending on the amounts of money lost and the sector where it occurs.”

• The 2026 Report shows that 45 percent of all frauds involve some form of corruption (down from 48 percent in the 2024 Report) with the median loss from corruption being $150,000 (down from $200,000 in 2024), and the fraud lasting an average of 12 months (down from 13 months in 2024).
• Eighty-two percent of the corruption frauds included at least one additional fraud type – either asset misappropriation or financial statement fraud or both.
• The 2026 Report identifies four main types of corruption:
  • Conflicts of interest, including purchasing schemes and sales schemes
  • Bribery, including invoice kickbacks and bid rigging.
  • Illegal gratuities
  • Economic extortion
• Corruption is the most pervasive form of fraud worldwide.
• The Purchasing Department is the department most at risk for corruption. Eighty-three percent of cases involved Purchasing Department fraud.
• The industries with the highest proportion of corruption cases are:
  • Agriculture, Forestry, Fishing and Hunting (65 percent)
  • Technology (64 percent)
  • Manufacturing (61 percent)
  • The Energy Sector (58 percent)
• Corruption is the most likely fraud committed by employees of any size of companies/organizations (those with fewer than 100 employees and those with 100+ employees). Forty-two percent of organizations with 100+ employees reported corruption fraud in the 2024 Report.
• Conflict of interest cases principally involve:
  • Purchases from favored parties regardless of whether the party provides the best quality and/or lowest prices.
  • Sales to favored parties at bargain prices. Often these sales are lower than those offered to other parties (or at a price usually reserved for larger customers).
  • Favored parties are often friends, relatives, or parties in which the purchaser has a financial interest.
• Bribery cases principally involve:
  • Kickbacks to the purchaser for purchasing either more goods or services that would be normally purchased or at higher prices than would normally be paid.
  • Bid rigging whereby the purchaser provides inside information to a favored vendor in return for payments/kickbacks.
  • Bid rigging can also be achieved by working with the favored vendor to write the request for proposal (RFP) in such a way that only the favored vendor can meet the RFP’s requirements.

My next blog article will discuss how companies/organizations react after a fraud has been discovered and what their experiences are in attempting to recover fraud losses

If you have any questions about potential fraud in your business, you should speak with a Certified Fraud Examiner from an experienced firm that provides forensic accounting services in Philadelphia and the Delaware Valley. The Philadelphia forensic accounting firm of David Anderson & Associates can be reached by calling David Anderson at 267-207-3597 or emailing him at david@davidandersonassociates.com.

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 who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Fraud Examiner, and a Certified Valuation Analyst.