CPAs play a crucial role in preventing fraud

By James Rumph, CPA, CFE, CIA, Nationwide’s Enterprise Anti-Fraud Team 

An estimated $41.5 billion of fraud will impact the state of Ohio for one year. This impact estimate is derived from a report by USAFacts that said Ohio’s gross domestic product from earlier this year of $830.6 billion[1] and the ACFE’s Occupational Fraud 2022: A Report to the Nations study that once again estimated organizations lose 5% of revenue to fraud each year.[2] To help put that $41.5 billion impact estimate in perspective, the United States Census Bureau’s July 2022 Ohio population estimate is 11.8 million.[3] That population points to approximately $3,500 lost to fraud per Ohio resident in a single year! 

This week is International Fraud Awareness Week, known commonly as Fraud Week, which was established in 2000 by the Association of Certified Fraud Examiners (ACFE). This week champions the need for organizations and individuals to spread awareness to proactively fight fraud. 

Despite all the advancements in fraud detection techniques and technology, human fraud awareness is still a key component in combating fraud. This is especially true with occupational fraud, which the ACFE defines as, “The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.” The ACFE’s Occupational Fraud 2022: A Report to the Nations also points to humans still being the most common source of occupational fraud discoveries. This study points to employees being the source of over half of all human-detected fraud referrals, also known as tips. Employees make up 55% of human referrals, plus an unknown portion of 16 % of anonymous human-detected fraud referrals. Although human detection by employees is the most common source, these statistics shine a light on the importance of helping spread fraud awareness with outside parties like customers and vendors. In fact, fraud suspicion referrals from outside parties identified by customers and vendors made up 28% of human-detected fraud suspicion referrals. 

Over time, the communication channels in which human-detected occupational fraud referrals are received have evolved as well. In the past, the telephone was the most common channel; however, the ACFE’s Occupational Fraud 2022: A Report to the Nations shares that email and web-based forms now account for more fraud detection referrals. These statistics highlight the importance of making these digital fraud detection reporting channels available to not only employees but also customers and vendors. 

CPAs have unique skill sets and opportunities to help spread fraud awareness. By doing so, we can contribute to a more resilient financial environment. Please visit FraudWeek.com for more information about increasing fraud awareness and access free resources that can be used by you and your employers and/or clients. 

James Rumph is an Ohio-based CPA and Certified Fraud Examiner (CFE) that leads Columbus, Ohio-based insurance and financial services provider Nationwide’s Enterprise Anti-Fraud Team. Nationwide is an official Fraud Week Ambassador.  

[1] What is the current state of Ohio’s economy?, USAFacts, accessed November 9, 2023, at https://usafacts.org/topics/economy/state/ohio). 

[2] Occupational Fraud 2022: A Report to the Nations, ACFE, accessed November 9, 2023, at https://legacy.acfe.com/report-to-the-nations/2022. 

[3] QuickFacts Ohio, United States Census Bureau, accessed November 9, 2023, at https://www.census.gov/quickfacts/fact/table/OH/PST045222.