The data is very clear.
The best source of uncovering fraud is via TIPS…from a customer, employee, vendor/supplier, owner/stockholder, even that well-known group called “anonymous.” We know this to be factual, from research data provided by the “Report to the Nations” and the Association of Certified Fraud Examiners.
So, are we taking action on these “best sources”? Maybe we ought to! If not, why not?
Why don’t we schedule some vendor visits, or customer discussions, or some “skip-level” conversations, even across functional lines…with the Marketing, Sales, IT, Operations, Procurement, or Customer Service groups, and see what they have to say? And while we’re over there, let’s remind them that THEY have as much opportunity to find inefficiency, or waste, or improvements to productivity, AS ANYONE. Because…they know the business processes the best! And because of that factoid, therefore, let me repeat the question, “When’s the last time you talked with a customer, a vendor, an employee?”
Here’s some other hard data, again from the ACFE and the Report to the Nations:
We know that the top culprits committing fraud within companies operate within the following functions (prioritized below based upon two primary criteria)…
| Ranked by Number of Cases |
and by Median Loss |
| 1. Accounting (22%) |
$180,000.00 |
| 2. Operations (18%) |
$105,000.00 |
| 3. Sales (13.5%) |
$71,000.00 |
| 4. Executive/Upper Management (13.5%) |
$829,000.00 |
| 5. Customer Service (7.2%) |
$46,000.00 |
| 6. Purchasing (6.2%) |
$500,000.00 |
…And, we know that in terms of “rank,” the higher-in-the-organization the perpetrator is, the more costly is the fraud. Is this great information, or what?!! Therefore, we know the trend lines, the occurrences, the experienced losses, the likely parts of the organization where they occur…but it takes proactive action and sleuthing to find fraud…Oh, and leadership too (to take the responsibility rather than “kicking-the-can-down-the-road”). Well, what are you doing, and where are you doing it, and what are you looking for, and how are you going about it?