WEBVTT - This file was automatically generated by VIMEO
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The Institute of Internal Auditors presents all
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things internal audit.
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In this episode, Mason Wilder, research director
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of the Association of Certified Fraud Examiners discusses
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the findings and implications
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of the occupational fraud 2024, A report to the nations.
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Welcome to the All Things Internal Audit podcast.
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I'm Robert Perez. In this episode,
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we are diving into the occupational fraud in 2024,
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A report to the nations from the Association
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of Certified Fraud Examiners, A CFE.
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This publication produced every two years,
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provides an impressive look at fraud globally
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from its financial impacts to how perpetrators
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of fraud are most likely to operate.
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I am quite pleased to have with me today, Mason Wilder,
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the AFEs Research Director will help us dissect some
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of the more intriguing parts of the report.
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Mason, thank you so much for joining me.
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Thank you so much for having me.
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Um, you know, I I appreciate the opportunity
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to talk about one of the most important things that we
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as an organization do,
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and that has been, you know, just such an important, uh,
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piece of work for us for, um,
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going on almost 20 years now. I think,
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Uh, according to the, uh, this year's,
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this year's occupational report, fraud losses
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topped 3 billion globally.
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Look, one question is, is that figure, um,
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based on the survey responses that you've received,
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or is that extrapolated based on what we know about, uh,
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how often fraud occurs typically in an organization?
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Sure. So that figure, uh, was directly, uh,
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taken from the sum of the losses
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for all of the cases that we used in this year's report.
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So that was not, uh, there was no kind of guesswork
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or extrapolation involved in that figure.
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Now, there is a figure that is probably the most
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quoted part of the report that is an extrapolation,
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and that is, you know, every, every survey we ask CFEs to
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estimate how much of their organization's revenue
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is lost to fraud on an annual basis.
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And so it's always,
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or, you know, it's regularly at 5%.
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And we, uh, take that
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and use a World Bank estimate for
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how much the global economy, uh, includes.
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And so, uh, which was 101 trillion, it was the figure
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that we use this this year.
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And so that means, you know, we have this figure
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of an estimated $5 trillion lost globally
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to fraud each year.
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And, uh, that's probably the piece of this report
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that gets quoted the most in news articles.
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Uh, but we feel like that's just, you know, there's
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so much more value in this report than that number.
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And, you know, since it does involve some extrapolation,
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it's maybe not necessarily our favorite figure
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to highlight from this.
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But, um, those are the differences
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between those two, two figures.
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But, but to your point, the,
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the report does include a lot more precise
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and sort of fascinating information.
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For example, one of the things I wanted to point out,
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that one of the data points that continues to grow
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is the number or the percentage of frauds
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detected by whistleblowers.
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Uh, indeed, this survey found that tips were three times
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more common and the next most common, uh, detection method.
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Uh, tell me more about that and,
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and how the value maybe of hotlines
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or other anonymous reporting methods is growing when it
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comes to, uh, occupational fraud detection.
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Sure. So, uh, that, that figure, the fact
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that tips are the most common detection method, uh,
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for all the cases submitted,
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this is a pretty consistent finding from all
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of the re reports that we've done.
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So, uh, and you know, in our opinion as an organization, uh,
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I think it's probably one of the most important highlights
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or takeaways from this report.
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It really illustrates
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that your an organization's employees are its most
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important fraud prevention asset, um,
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or the most important asset that you have at your disposal
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for preventing fraud.
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And so this hasn't necessarily grown, uh, in importance.
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It's always been the top detection method.
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Um, one thing that has changed
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with it is the reporting mechanisms.
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Uh, for example, in this year's report, the most
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commonly used reporting mechanism
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or format for reporting, if you will, was, uh, online
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or web-based reporting mechanisms rather than, you know,
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the last report, I think it was, um, email,
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uh, was the most common.
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Uh, and prior to that it was always hotlines.
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So, you know, I think what we hope that organizations
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take away from that is that it is critical to have,
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uh, not just a hotline
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or some kind of a reporting protocol in place at your
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organization, but, um,
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offering a couple different options to your employees so
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that you can kind of meet your employees where they are, uh,
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and what it suits them best.
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You know, maybe for older employees, uh, they'd prefer
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to use a hotline, whereas younger Gen Z employees
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that you have might prefer to have web-based reporting
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or be more likely to use that.
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So, you know,
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and, uh, so we recommend having several options available.
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A hotline or reporting protocol, um, is a,
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a type of anti-fraud control that can be incredibly valuable
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to any organization in any industry of any size,
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in any jurisdiction.
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I think this is, you know, probably the,
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like most universally applicable and
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therefore probably the most important
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anti-fraud control an organization can have.
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And, and to that point, what does this mean for,
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for internal, from an internal audit perspective?
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How can internal auditors leverage whistleblower tips?
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Well, since, uh, that is the most common method
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of detection, I mean, I would encourage all auditors to, uh,
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if they are not directly involved in the hotline
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or reporting protocols at their organization,
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learn about them and, you know, understand how they work,
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the different options available to employees.
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Um, and I think it's also really important to
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not just have these in place, but, um, test
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and evaluate how they function.
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Make sure that, uh,
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and this is something where auditors are going
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to be more likely to be involved than other
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personnel at the organization.
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I think, um, just, you know, testing
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and evaluating the reporting mechanisms, ensuring that
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all reports received are taken seriously and followed up on,
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and, you know, again,
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and not just doing that once in a while,
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I would recommend regularly testing that hotline
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because it is where the majority
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of your fraud cases are going to come from.
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Great insights on that. Excellent.
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So another benefit of the report is
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that it builds some pretty robust profiles
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on typical frauds, fraudsters, methods, duration, and more.
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Tell, tell me a little bit more about that.
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Sure. So this is really, I think what, you know,
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could be considered the meat of the report
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or the real substance of the report.
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And, you know, we really hope that
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the readers of this report, uh, use that information to,
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or translate that information into improvements
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for their anti-fraud programs.
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So for example, you know, the, for typical frauds
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and characteristics of fraudsters, uh, especially within an
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industry, you know, we, we hope that readers are able
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to take that information
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and incorporated into their fraud risk assessments
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or their fraud risk management programs, uh,
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to make sure you're prioritizing, you know, uh,
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the most significant risks
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or the departments where fraud is more common
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or, you know, uh, things like that.
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And for like methods that are used to commit fraud, we hope
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that, you know, organizations take that, or fraud examiners
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or anti-fraud professionals take
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that information into consideration, um,
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when they're developing their kind of investigation
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procedures or their controls, you know, to,
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to frame those controls so that they are designed to detect
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the more common methods of carrying out fraud.
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Um, and for things like, you know, duration,
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I know you mentioned that that's, you know, not necessarily,
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we don't necessarily hope that you take that information
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and turn it into some kind of control
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or procedure, uh, that's maybe designed more
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to illustrate the importance
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or emphasize the importance of detecting frauds early,
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because every study has shown, of course, um, you know,
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the longer a fraud goes on, the higher the losses are.
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And so, uh, another thing
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that's not really captured in the report,
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but I can say, you know, from working at the A CFE
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for a while now and having a lot of conversations
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with anti-fraud professionals, uh, that, you know,
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it's generally once fraudsters decide
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to commit fraud, they do not stop until they are caught.
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So, you know, it's incredibly rare
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that somebody just commits a one-off fraud.
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So, you know, that's for, um, duration we're,
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when we present information related to the duration
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of frauds, uh, you know, we're really trying
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to emphasize the importance of catching them early.
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Excellent point. So an interesting twist or, or,
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or detail of this year's report is that
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for the first time it really reflects frauds that occurred
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during the global pandemic.
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Uh, tell me why we're, we're only now seeing that
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and, uh, what the impact was
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As far as the impact of covid,
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what we've really focused on collecting, uh, in last year
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or last report, and this one is more, um,
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you know, coverage of the, the factors related
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to the pandemic that impacted the fraud, rather than trying
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to quantify how much the fraud was impacted by
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covid or those factors.
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So according to our data in this year's report,
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more than half of the cases in the study had at least one
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pandemic related factor that contributed to the fraud.
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Um, so, you know, it's really difficult to try
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and quantify that the, the
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impact on these frauds from covid, uh, apart from just kind
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of saying they were impacted, um, you know, there,
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there was a relatively significant increase in median losses
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in this report after, you know, four reports in a row,
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the median fraud losses were decreasing
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as were median durations of fraud.
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And then in this, uh, we reversed
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that trend for this report.
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So it's, it's really difficult to say whether
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that in increase was directly correlated
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with the pandemic or not.
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Um, but it is notable, I think, and, um, you know, the,
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but certainly the pandemic caused organizational
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staffing changes, you know, shifts to remote
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or hybrid work, operational process changes, um,
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and you, you know, those three in particular, uh,
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can have a major impact on how controls are implemented
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or how effectively your existing controls are implemented.
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And it might create more opportunities for people
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to circumvent those controls
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or commit fraud in ways that they wouldn't be able
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to if everybody was still in person in the office.
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And so, I mean, I think that's really the,
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the majority of the covid impact on fraud.
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But again, we just, you know, we're only kind of able
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to reliably track whether
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or not covid played a role in these fraud cases more so than
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how much of a role did it play.
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So it, it's easy, it's easy
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to get caught up in all the fascinating details of, uh,
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the data points and how often or how big frauds can get, uh,
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but the real value, at least for me in the report, is
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that it can really teach us a lot about fraud
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detection and prevention.
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And you've already touched on that a little bit,
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but tell me a bit more about that.
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One of the things that we did
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for the first time in this report
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to really drive home the point that you're,
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you're making is we included a bit of a, a guide,
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a kinda one page infographic
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that provides some ideas
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and instruction on how the audience can use the report
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to do things like inform fraud risk assessments,
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like I already kind of mentioned,
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or benchmark their anti-fraud program
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and see how it stacks up against other organizations
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and, you know, determine whether
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or not they need to make any adjustments that can, you know,
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improve your fraud prevention and detection efforts, uh,
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and really use some of the information, especially
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with regard to losses, um,
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to sell fraud prevention
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or fraud risk management programs to management, you know,
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by being able to have a number
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that an average specific type of fraud, uh,
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can cost an organization to really illustrate that.
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Like, if we don't do something
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to address these risks appropriately,
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we could find ourselves facing, you know,
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pretty significant losses.
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Um, a lot of times, you know, the, the cliche,
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an ounce of prevention is worth a pound of cure.
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And, you know, we hope that people are able to use some
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of the statistics in this report to kind of make
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that point when they're talking to management
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or clients about fraud prevention, uh,
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and really, you know, identify the areas of, of risk
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that are, you know, the highest for their type
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of organization based on either size or industry.
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Um, and, you know, there's a lot of different ways
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that you can take the information from this report
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and, um, use it
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to hopefully better protect your organization against fraud.
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Yeah, that, that, that's such a great point
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because it is about your individual organization
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and trying to find out how things operate that, that's one
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of the things that, uh, we talked
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that I was considering in terms of fraud detection
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and prevention is, is how the organization operates itself.
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Tell me generally how different, well,
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how different is in culture differe and industry
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and maturity maybe, uh, and other factors can affect fraud.
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I think of the characteristics that you mentioned,
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the culture, industry maturity
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and other factors, I think industry is going
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to have the biggest impact on your particular fraud
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risk profile.
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Uh, some organizations, uh, that are in certain industries
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like, you know, um, mining or something for example,
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or are going to have different risks than like a
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financial services company.
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Um, you know, the, so for
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that particular example, like a mining company is going
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to face a higher risk of, uh, inventory theft
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or, you know, um, physical asset misappropriation,
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then a financial institution
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or a financial services company.
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And so, you know, we've got information in there that, that
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shows what the most common fraud types
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were for.
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I think it's like 19
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or 20 different industries that we
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slotted each response into.
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And so that can be really useful
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because no, uh, two organizations are going
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to necessarily have the exact same fraud risk profile.
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Um, you know, smaller organizations as far
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so like size of an organization can play a big role
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because smaller organizations generally are not gonna have
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the budget to, uh, implement the same type
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or amount of, uh, anti-fraud controls
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that a larger organization is.
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Um, and organizations that are newer, uh, you know, a lot
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of anti-fraud programs are iterative.
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You know, they've been improved over time
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and often in response to frauds that have occurred.
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You know, a lot of times, uh, organizations only find out
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that they have a particular kind
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of fraud risk when a fraud occurs.
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Mm-Hmm. So, um, you know,
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we also captured some information in the report about,
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you know, what were the most common controls that were
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adjusted or updated after a fraud occurred.
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So you can look at some of that information to maybe try
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and accelerate your learning curve if you're at a,
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a younger organization.
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So, you know, there's a a million different variables
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that, uh, go into an organization's, you know,
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fraud risk profile,
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and we try to capture as much information
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as we can in this report to kind of inform, uh,
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people about their specific organization's risk profile.
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Um, but you know, there's really an unlimited amount
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of variables, so you can't capture everything.
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Yeah. But, but to your point, I mean, uh, the, the
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overarching benefit of all
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of this is becoming better educated,
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whether it's about your particular industry
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or better educated and able to, uh, be able
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to better inform management and,
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and sell them on the benefits of, of, uh,
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effective controls.
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Uh, and, and clearly this is what is, is the great benefit
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of the report itself is that it's, uh, there to educate, uh,
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folks about, uh, the different aspects of it
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and the different, uh, ways that they can, uh,
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put in effective, uh, deterrence and, and,
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and, uh, prevention, uh, controls.
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So obviously we've covered lots of ground here, uh,
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but we're really just sort of scratching the surface, uh,
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on all the details in the report, uh, itself.
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But is there anything you, you want to touch on
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that we haven't talked about
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that is important, do you think?
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Yeah, you know, there is one thing,
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and I think it really dovetails with
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what you were just saying really nicely.
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Um, this, this report is about education.
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And, you know, especially if you're just for auditors
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that are, you know, now being maybe asked,
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there's more being asked from them with regards
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to detecting fraud, uh, and, you know, they're curious
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and want to be able
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to do more from like a fraud detection perspective.
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This is a really valuable, uh, resource for you to learn
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so much about how fraud is committed, how it's detected,
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um, and much, much more.
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But also I think this can be a really great asset
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for something that we highlight
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for the first time in this report.
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We really, you know, dug deep into the value
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of fraud awareness training.
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And so this really fits.
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So we're not just trying to, um,
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we're not just trying to promote the education of people
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that might have some kind of anti-fraud responsibility
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or role, but we also tried to illustrate the value
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of educating all your employees about fraud.
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And so there's a really cool infographic
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about fraud awareness training for your employees
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that I really encourage people to take a look at.
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Uh, and, you know,
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if you don't already have fraud awareness training at your
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organization, I would strongly suggest
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that you consider implementing it
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because we're able to capture some, some data that
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illustrates how effective it can be in
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limiting your fraud losses.
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This also ties into what we started this conversation out
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with, uh, talking about tips.
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Uh, people that know more about fraud
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and have more fraud awareness are going
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to be much more likely to use that reporting mechanism
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or, or call that hotline and report something suspicious.
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And again, your employees, I think, are your more,
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most valuable asset in the fight against fraud.
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So, if I had one kind of closing piece of advice, it would,
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uh, be for our audience here today to check out
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that fraud awareness training infographic to really see
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how valuable that can be.
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And if you don't have it at your organization,
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I strongly suggest, uh, implementing it.
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Well, that insight brings us very nicely back around to,
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to where we started, to your point.
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So again, I'd like to thank, uh, my guest, uh, Mason Wilder,
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a CFE research director for joining me today.
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It's been fascinating.
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Well, thank you for having me once again
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and, um, you know, you can feel free
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to make my contact information available to the audience.
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Uh, happy to do anything I can to help people, uh,
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help people out, whether they're I I a members,
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A CFE members, or just members of the general public
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that are curious about fraud.
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Excellent. So indeed. So, if, if our listeners
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found this podcast topic as fascinating as I did,
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I encourage, uh, you to go to ffe.com
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where you can download occupational fraud in 2024,
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a report to the nations.
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I'd also encourage you to subscribe to, you know,
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things internal audit fraud podcast.
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It's, uh, publishing collaboration
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with the Internal Auditor Magazine and the a FE.
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And finally, you can also find more information@the.org
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slash acfe fraud.
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Thanks for listening.
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The Institute of Internal Auditors presents all
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things internal audit.
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In this episode, Mason Wilder, research director
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of the Association of Certified Fraud Examiners discusses
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the findings and implications
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of the occupational fraud 2024, A report to the nations.
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Welcome to the All Things Internal Audit podcast.
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I'm Robert Perez. In this episode,
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we are diving into the occupational fraud in 2024,
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A report to the nations from the Association
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of Certified Fraud Examiners, A CFE.
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This publication produced every two years,
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provides an impressive look at fraud globally
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from its financial impacts to how perpetrators
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of fraud are most likely to operate.
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I am quite pleased to have with me today, Mason Wilder,
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the AFEs Research Director will help us dissect some
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of the more intriguing parts of the report.
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Mason, thank you so much for joining me.
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Thank you so much for having me.
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Um, you know, I I appreciate the opportunity
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to talk about one of the most important things that we
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as an organization do,
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and that has been, you know, just such an important, uh,
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piece of work for us for, um,
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going on almost 20 years now. I think,
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Uh, according to the, uh, this year's,
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this year's occupational report, fraud losses
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topped 3 billion globally.
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Look, one question is, is that figure, um,
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based on the survey responses that you've received,
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or is that extrapolated based on what we know about, uh,
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how often fraud occurs typically in an organization?
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Sure. So that figure, uh, was directly, uh,
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taken from the sum of the losses
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for all of the cases that we used in this year's report.
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So that was not, uh, there was no kind of guesswork
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or extrapolation involved in that figure.
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Now, there is a figure that is probably the most
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quoted part of the report that is an extrapolation,
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and that is, you know, every, every survey we ask CFEs to
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estimate how much of their organization's revenue
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is lost to fraud on an annual basis.
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And so it's always,
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or, you know, it's regularly at 5%.
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And we, uh, take that
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and use a World Bank estimate for
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how much the global economy, uh, includes.
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And so, uh, which was 101 trillion, it was the figure
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that we use this this year.
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And so that means, you know, we have this figure
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of an estimated $5 trillion lost globally
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to fraud each year.
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And, uh, that's probably the piece of this report
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that gets quoted the most in news articles.
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Uh, but we feel like that's just, you know, there's
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so much more value in this report than that number.
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And, you know, since it does involve some extrapolation,
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it's maybe not necessarily our favorite figure
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to highlight from this.
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But, um, those are the differences
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between those two, two figures.
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But, but to your point, the,
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the report does include a lot more precise
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and sort of fascinating information.
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For example, one of the things I wanted to point out,
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that one of the data points that continues to grow
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is the number or the percentage of frauds
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detected by whistleblowers.
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Uh, indeed, this survey found that tips were three times
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more common and the next most common, uh, detection method.
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Uh, tell me more about that and,
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and how the value maybe of hotlines
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or other anonymous reporting methods is growing when it
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comes to, uh, occupational fraud detection.
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Sure. So, uh, that, that figure, the fact
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that tips are the most common detection method, uh,
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for all the cases submitted,
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this is a pretty consistent finding from all
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of the re reports that we've done.
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So, uh, and you know, in our opinion as an organization, uh,
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I think it's probably one of the most important highlights
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or takeaways from this report.
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It really illustrates
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that your an organization's employees are its most
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important fraud prevention asset, um,
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or the most important asset that you have at your disposal
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for preventing fraud.
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And so this hasn't necessarily grown, uh, in importance.
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It's always been the top detection method.
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Um, one thing that has changed
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with it is the reporting mechanisms.
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Uh, for example, in this year's report, the most
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commonly used reporting mechanism
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or format for reporting, if you will, was, uh, online
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or web-based reporting mechanisms rather than, you know,
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the last report, I think it was, um, email,
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uh, was the most common.
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Uh, and prior to that it was always hotlines.
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So, you know, I think what we hope that organizations
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take away from that is that it is critical to have,
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uh, not just a hotline
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or some kind of a reporting protocol in place at your
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organization, but, um,
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offering a couple different options to your employees so
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that you can kind of meet your employees where they are, uh,
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and what it suits them best.
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You know, maybe for older employees, uh, they'd prefer
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to use a hotline, whereas younger Gen Z employees
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that you have might prefer to have web-based reporting
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or be more likely to use that.
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So, you know,
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and, uh, so we recommend having several options available.
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A hotline or reporting protocol, um, is a,
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a type of anti-fraud control that can be incredibly valuable
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to any organization in any industry of any size,
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in any jurisdiction.
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I think this is, you know, probably the,
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like most universally applicable and
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therefore probably the most important
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anti-fraud control an organization can have.
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And, and to that point, what does this mean for,
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for internal, from an internal audit perspective?
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How can internal auditors leverage whistleblower tips?
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Well, since, uh, that is the most common method
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of detection, I mean, I would encourage all auditors to, uh,
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if they are not directly involved in the hotline
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or reporting protocols at their organization,
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learn about them and, you know, understand how they work,
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the different options available to employees.
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Um, and I think it's also really important to
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not just have these in place, but, um, test
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and evaluate how they function.
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Make sure that, uh,
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and this is something where auditors are going
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to be more likely to be involved than other
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personnel at the organization.
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I think, um, just, you know, testing
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and evaluating the reporting mechanisms, ensuring that
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all reports received are taken seriously and followed up on,
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and, you know, again,
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and not just doing that once in a while,
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I would recommend regularly testing that hotline
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because it is where the majority
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of your fraud cases are going to come from.
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Great insights on that. Excellent.
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So another benefit of the report is
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that it builds some pretty robust profiles
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on typical frauds, fraudsters, methods, duration, and more.
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Tell, tell me a little bit more about that.
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Sure. So this is really, I think what, you know,
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could be considered the meat of the report
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or the real substance of the report.
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And, you know, we really hope that
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the readers of this report, uh, use that information to,
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or translate that information into improvements
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for their anti-fraud programs.
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So for example, you know, the, for typical frauds
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and characteristics of fraudsters, uh, especially within an
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industry, you know, we, we hope that readers are able
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to take that information
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and incorporated into their fraud risk assessments
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or their fraud risk management programs, uh,
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to make sure you're prioritizing, you know, uh,
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the most significant risks
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or the departments where fraud is more common
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or, you know, uh, things like that.
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And for like methods that are used to commit fraud, we hope
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that, you know, organizations take that, or fraud examiners
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or anti-fraud professionals take
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that information into consideration, um,
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when they're developing their kind of investigation
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procedures or their controls, you know, to,
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to frame those controls so that they are designed to detect
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the more common methods of carrying out fraud.
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Um, and for things like, you know, duration,
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I know you mentioned that that's, you know, not necessarily,
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we don't necessarily hope that you take that information
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and turn it into some kind of control
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or procedure, uh, that's maybe designed more
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to illustrate the importance
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or emphasize the importance of detecting frauds early,
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because every study has shown, of course, um, you know,
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the longer a fraud goes on, the higher the losses are.
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And so, uh, another thing
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that's not really captured in the report,
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but I can say, you know, from working at the A CFE
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for a while now and having a lot of conversations
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with anti-fraud professionals, uh, that, you know,
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it's generally once fraudsters decide
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to commit fraud, they do not stop until they are caught.
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So, you know, it's incredibly rare
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that somebody just commits a one-off fraud.
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So, you know, that's for, um, duration we're,
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when we present information related to the duration
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of frauds, uh, you know, we're really trying
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to emphasize the importance of catching them early.
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Excellent point. So an interesting twist or, or,
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or detail of this year's report is that
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for the first time it really reflects frauds that occurred
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during the global pandemic.
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Uh, tell me why we're, we're only now seeing that
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and, uh, what the impact was
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As far as the impact of covid,
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what we've really focused on collecting, uh, in last year
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or last report, and this one is more, um,
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you know, coverage of the, the factors related
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to the pandemic that impacted the fraud, rather than trying
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to quantify how much the fraud was impacted by
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covid or those factors.
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So according to our data in this year's report,
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more than half of the cases in the study had at least one
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pandemic related factor that contributed to the fraud.
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Um, so, you know, it's really difficult to try
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and quantify that the, the
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impact on these frauds from covid, uh, apart from just kind
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of saying they were impacted, um, you know, there,
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there was a relatively significant increase in median losses
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in this report after, you know, four reports in a row,
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the median fraud losses were decreasing
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as were median durations of fraud.
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And then in this, uh, we reversed
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that trend for this report.
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So it's, it's really difficult to say whether
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that in increase was directly correlated
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with the pandemic or not.
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Um, but it is notable, I think, and, um, you know, the,
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but certainly the pandemic caused organizational
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staffing changes, you know, shifts to remote
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or hybrid work, operational process changes, um,
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and you, you know, those three in particular, uh,
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can have a major impact on how controls are implemented
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or how effectively your existing controls are implemented.
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And it might create more opportunities for people
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to circumvent those controls
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or commit fraud in ways that they wouldn't be able
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to if everybody was still in person in the office.
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And so, I mean, I think that's really the,
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the majority of the covid impact on fraud.
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But again, we just, you know, we're only kind of able
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to reliably track whether
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or not covid played a role in these fraud cases more so than
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how much of a role did it play.
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So it, it's easy, it's easy
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to get caught up in all the fascinating details of, uh,
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the data points and how often or how big frauds can get, uh,
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but the real value, at least for me in the report, is
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that it can really teach us a lot about fraud
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detection and prevention.
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And you've already touched on that a little bit,
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but tell me a bit more about that.
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One of the things that we did
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for the first time in this report
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to really drive home the point that you're,
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you're making is we included a bit of a, a guide,
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a kinda one page infographic
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that provides some ideas
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and instruction on how the audience can use the report
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to do things like inform fraud risk assessments,
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like I already kind of mentioned,
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or benchmark their anti-fraud program
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and see how it stacks up against other organizations
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and, you know, determine whether
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or not they need to make any adjustments that can, you know,
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improve your fraud prevention and detection efforts, uh,
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and really use some of the information, especially
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with regard to losses, um,
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to sell fraud prevention
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or fraud risk management programs to management, you know,
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by being able to have a number
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that an average specific type of fraud, uh,
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can cost an organization to really illustrate that.
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Like, if we don't do something
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to address these risks appropriately,
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we could find ourselves facing, you know,
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pretty significant losses.
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Um, a lot of times, you know, the, the cliche,
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an ounce of prevention is worth a pound of cure.
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And, you know, we hope that people are able to use some
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of the statistics in this report to kind of make
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that point when they're talking to management
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or clients about fraud prevention, uh,
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and really, you know, identify the areas of, of risk
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that are, you know, the highest for their type
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of organization based on either size or industry.
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Um, and, you know, there's a lot of different ways
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that you can take the information from this report
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and, um, use it
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to hopefully better protect your organization against fraud.
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Yeah, that, that, that's such a great point
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because it is about your individual organization
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and trying to find out how things operate that, that's one
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of the things that, uh, we talked
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that I was considering in terms of fraud detection
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and prevention is, is how the organization operates itself.
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Tell me generally how different, well,
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how different is in culture differe and industry
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and maturity maybe, uh, and other factors can affect fraud.
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I think of the characteristics that you mentioned,
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the culture, industry maturity
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and other factors, I think industry is going
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to have the biggest impact on your particular fraud
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risk profile.
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Uh, some organizations, uh, that are in certain industries
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like, you know, um, mining or something for example,
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or are going to have different risks than like a
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financial services company.
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Um, you know, the, so for
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that particular example, like a mining company is going
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to face a higher risk of, uh, inventory theft
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or, you know, um, physical asset misappropriation,
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then a financial institution
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or a financial services company.
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And so, you know, we've got information in there that, that
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shows what the most common fraud types
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were for.
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I think it's like 19
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or 20 different industries that we
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slotted each response into.
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And so that can be really useful
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because no, uh, two organizations are going
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to necessarily have the exact same fraud risk profile.
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Um, you know, smaller organizations as far
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so like size of an organization can play a big role
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because smaller organizations generally are not gonna have
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the budget to, uh, implement the same type
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or amount of, uh, anti-fraud controls
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that a larger organization is.
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Um, and organizations that are newer, uh, you know, a lot
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of anti-fraud programs are iterative.
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You know, they've been improved over time
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and often in response to frauds that have occurred.
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You know, a lot of times, uh, organizations only find out
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that they have a particular kind
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of fraud risk when a fraud occurs.
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Mm-Hmm. So, um, you know,
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we also captured some information in the report about,
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you know, what were the most common controls that were
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adjusted or updated after a fraud occurred.
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So you can look at some of that information to maybe try
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and accelerate your learning curve if you're at a,
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a younger organization.
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So, you know, there's a a million different variables
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that, uh, go into an organization's, you know,
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fraud risk profile,
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and we try to capture as much information
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as we can in this report to kind of inform, uh,
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people about their specific organization's risk profile.
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Um, but you know, there's really an unlimited amount
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of variables, so you can't capture everything.
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Yeah. But, but to your point, I mean, uh, the, the
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overarching benefit of all
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of this is becoming better educated,
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whether it's about your particular industry
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or better educated and able to, uh, be able
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to better inform management and,
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and sell them on the benefits of, of, uh,
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effective controls.
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Uh, and, and clearly this is what is, is the great benefit
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of the report itself is that it's, uh, there to educate, uh,
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folks about, uh, the different aspects of it
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and the different, uh, ways that they can, uh,
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put in effective, uh, deterrence and, and,
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and, uh, prevention, uh, controls.
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So obviously we've covered lots of ground here, uh,
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but we're really just sort of scratching the surface, uh,
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on all the details in the report, uh, itself.
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But is there anything you, you want to touch on
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that we haven't talked about
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that is important, do you think?
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Yeah, you know, there is one thing,
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and I think it really dovetails with
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what you were just saying really nicely.
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Um, this, this report is about education.
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And, you know, especially if you're just for auditors
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that are, you know, now being maybe asked,
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there's more being asked from them with regards
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to detecting fraud, uh, and, you know, they're curious
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and want to be able
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to do more from like a fraud detection perspective.
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This is a really valuable, uh, resource for you to learn
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so much about how fraud is committed, how it's detected,
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um, and much, much more.
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But also I think this can be a really great asset
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for something that we highlight
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for the first time in this report.
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We really, you know, dug deep into the value
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of fraud awareness training.
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And so this really fits.
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So we're not just trying to, um,
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we're not just trying to promote the education of people
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that might have some kind of anti-fraud responsibility
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or role, but we also tried to illustrate the value
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of educating all your employees about fraud.
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And so there's a really cool infographic
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about fraud awareness training for your employees
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that I really encourage people to take a look at.
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Uh, and, you know,
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if you don't already have fraud awareness training at your
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organization, I would strongly suggest
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that you consider implementing it
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because we're able to capture some, some data that
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illustrates how effective it can be in
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limiting your fraud losses.
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This also ties into what we started this conversation out
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with, uh, talking about tips.
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Uh, people that know more about fraud
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and have more fraud awareness are going
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to be much more likely to use that reporting mechanism
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or, or call that hotline and report something suspicious.
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And again, your employees, I think, are your more,
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most valuable asset in the fight against fraud.
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So, if I had one kind of closing piece of advice, it would,
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uh, be for our audience here today to check out
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that fraud awareness training infographic to really see
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how valuable that can be.
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And if you don't have it at your organization,
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I strongly suggest, uh, implementing it.
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Well, that insight brings us very nicely back around to,
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to where we started, to your point.
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So again, I'd like to thank, uh, my guest, uh, Mason Wilder,
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a CFE research director for joining me today.
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It's been fascinating.
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Well, thank you for having me once again
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and, um, you know, you can feel free
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to make my contact information available to the audience.
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Uh, happy to do anything I can to help people, uh,
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help people out, whether they're I I a members,
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A CFE members, or just members of the general public
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that are curious about fraud.
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Excellent. So indeed. So, if, if our listeners
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found this podcast topic as fascinating as I did,
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I encourage, uh, you to go to ffe.com
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where you can download occupational fraud in 2024,
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a report to the nations.
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00:24:27.315 --> 00:24:30.175
I'd also encourage you to subscribe to, you know,
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things internal audit fraud podcast.
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It's, uh, publishing collaboration
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with the Internal Auditor Magazine and the a FE.
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And finally, you can also find more information@the.org
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slash acfe fraud.
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Thanks for listening.
