In 2024, U.S. public companies lost an average of 1.06% of their revenue to known fraud, according to a new survey by the Association of Certified Fraud Examiners (ACFE) and the Anti-Fraud Collaboration. That virtually replicated the previous year’s 1.07% average. 

However, unknown fraud may be multiple times more expensive, according to the survey, whose 369 participants estimated that the real cost of fraud — detected and undetected — is actually 2.5% of revenue. 

Half of the study participants were current employees of U.S. public companies in roles such as fraud examiner, internal auditor, compliance or ethics professional, risk management professional and financial statement preparer. 

Additionally, 29% of those surveyed were in governance roles (i.e., board of directors or audit committee members), 14% were external consultants or advisers, and the rest were external auditors or employees of a government agency with regulatory or investigative authority. 

What is causing fraud today? 

The biggest factors depend on who is being asked. 

Public company employees 

1. Regulatory environment 

2. Economic conditions/environment 

3. Organizational culture/tone at the top 

Board of directors and audit committee members 

1. Quality of external audits 

2. Technological advancements 

3. Maturity of anti-fraud program 

External advisers 

1. Economic conditions/environment t 

2. Organizational culture/tone at the top 

3. External pressures 

“Even for frauds that do come to light, the full amount of the loss might not be determinable,” the report said. ACFE research also shows that about half of internal frauds last more than 12 months before being detected, “Meaning some frauds that were occurring in 2023 and 2024 were likely not yet included in the known fraud losses for those years.”  

The survey asked participants to rate both the likelihood and significance of six categories of fraud. Cyberfraud was the worst offender in both senses by a substantial margin. Financial statement fraud was the least likely to occur but had the second-worst consequences. Customer payment fraud was the second-most likely but had the least significance. 

All three of the most likely types of fraud were external in nature. In addition to cyberfraud, they included fraud by vendors and sellers and customer payment fraud. 

The sixth type of fraud, asset misappropriation/embezzlement, was second-lowest in significance and the middle of the pack in likelihood. 

The responsibility for an anti-fraud program or function varies among U.S. public companies. 

As dire as survey participants were about the current specter of fraud, they’re also pessimistic about the future. Two-thirds (66%) of them said they expect an increase in the overall level of fraud over the next two years, compared to only 17% who forecasted decreased fraud. 

Company employees and governance officials were asked what could be done differently to better deter fraud or detect it sooner at their company. The runaway top response could hardly be more straightforward: More than half (56%) simply recommended more or improved proactive and continuous monitoring for fraud. 

Fifteen percent advocated for new or improved use of technology or AI, and 13% suggested enhanced efforts related to fraud awareness training and an anti-fraud culture.