International Fraud Awareness Week is coming: Here’s what you need to know

Written on Nov 14, 2019

By Nicole Fracasso, OSCPA communications intern

Accounting departments have one of the highest susceptibility rates to occupational fraud, according to an expert with the Central Ohio Association of Certified Fraud Examiners (ACFE) Chapter.

“Each instance of fraud in that department equates to a median loss of $212,000,” said James Rumph, CFE, CPA, CAMS, CIA, and current president of the Central Ohio ACFE Chapter.

That number is based on the ACFE’s findings in the 2018 Report to the Nations on Occupational Fraud and Abuse. The ACFE estimates that overall a typical organization loses about 5% of its revenue each year to fraud. To help combat this, the Central Ohio ACFE Chapter has been hard at work on their Cost of Fraud campaign, a part of International Fraud Awareness Week beginning on Nov. 17, where they are educating the public on the consequences of fraud, when lies turn into fraud, and how to help raise awareness.

“With our campaign, we’re focusing on what would happen to you if you commit fraud, and making sure the public understands fraud is a crime,” Rumph said. “It can actually cause you to go to prison and lose your career.”

The Central Ohio ACFE Chapter has provided a basic fraud definition of “any intentional manipulation of the truth for financial or personal gain.” People often use the phrase “little white lie” to justify their actions; however, if the little white lie is purposeful, it could result in a prison sentence and the loss of your career.

“There are different fraud laws applicable both locally and nationally that clarify what is and isn’t fraud,” Rumph said. “It really goes back to the definition. If it wasn’t intentional, if it was a mistake, it’s not fraud.”

Rumph said fraud can have a direct impact on the financial wellbeing of the company, but its impact isn’t only internal. In any type of organization, it can have a negative impact on customers (e.g., through increased product and service costs) and other outside stakeholders as well.

To better protect your organization, Rumph recommends starting by conducting a fraud risk assessment. This will allow the company to identify and prioritize areas of opportunity to strengthen protection against fraud. It’s also important for leadership to educate employees on fraud and display an ethical tone from the top.

“Organizations should conduct training to make sure their employees are aware of the risks specific to their organization. Our chapter hosts a number of training events, including the Emerging Trends in Fraud Investigation & Prevention Conference held annually in May.”

To learn more about fraud and what you can do to protect your company's profits, attend our Fraud & Forensic Accounting Summit on Dec. 19.

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  1. Central Ohio ACFE Chapter | Nov 18, 2019
    Thank you, Ohio Society of CPAs and Nicole Fracasso! We appreciate your support in spreading the Central Ohio ACFE Chapter's Cost of Fraud campaign and awareness of International Fraud Awareness Week. #FraudWeek #COSTofFRAUD #BigConsequences #ACFE #Ohio #Columbus #CPA #CFE #OhioSocietyofCPAs

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