Occupational fraud is defined by the Association of Certified Fraud Examiners (ACFE) as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets”. This means that the perpetrator of the fraud steals assets from the employer, in contrast to financial fraud in which the firm’s financial statements are misrepresented. For example, the Enron case is a case of financial fraud, while the theft of the company’s inventory by an employee would be occupational fraud. The ACFE completed a study of 508 cases of occupational fraud reported in 2004 (www.acfe.com/documents/2004RttN.pdf). The study shows some distinct patterns to these fraud cases.

Required
Go to the ACFE link shown above and review the study to determine the following.
1. Are first time offenders more likely or less likely to commit fraud?
2. Most frauds are detected by audit, revealed by the perpetrator, or exposed by a tip from another employee?
3. Does or does not a fraud hot line which employees can use to report suspected fraud help in reducing the cost of fraud?
4. Is the cost of fraud higher in small companies or larger companies?
5. Is age or gender of the perpetrator associated with the cost of fraud?
6. What do these results tell you about the incidence of fraud and how a company can best protect itself from occupational fraud?