Sex in Fraud? Well sex and fraud, or more correctly, sexual equality in fraudulent activity. I thought that Sex in Fraud was a good lead into an mostly otherwise not-so-exciting topic of the latest update on profiling frauds as detailed in the 2010 ACFE Report to the Nations.
Every two years the Association of Certified Fraud Examiners (ACFE) produces a report on occupational fraud drawn from information supplied by the base of 50,000 CFEs worldwide. The 2010 report has recently been released.
Flipping through the 83 page report, the issue of sex struck me – as it does.
Of the frauds examined in the report worldwide, 66.7% were committed by males with the balance of 33.3% being committed by females. This represents an increase of 6.8% (up from 59.1%) in frauds committed by males from 2008 and a corresponding decrease in those committed be females.
This in itself did not really catch my attention, but for the first time the report broke down the gender spread across geographical regions, and that was interesting.
Now let me ask a large question here: Does the breakdown of gender in fraud represent the level of gender equality in the workplace? Or put another way, does the number of females committing fraud, represent the number of females in positions within business (gender equality) with the opportunity to commit fraud?
The data sourced from frauds investigated shows:
- Asia region (including the Middle Eastern countries) 86.7% of occupation fraud was committed by males – only 13.3% committed by females.
- In Europe – 82.1% by males and 17.9% by females
- Central/ South America – 80.9% by males and 19.1% by females
- Africa – 75.7% by males and 24.3% by females
- Oceania (including Australia) – 67.5% by males and 32.5% by females
- Canada – 58% by males and 41.9% by females
- The US – 57.2% by males and 42.8% by females
The difference in the percentages from top to bottom surprised me and raised a number of questions.
Were males in Asia and Europe significantly more likely to commit fraud, or females significant less likely to commit fraud than their US counterparts, or were the figures distorted because Asian and European women were just so much better at it than their US counterparts and have not been caught? Or do these figures represent the gender equity in the workforce in these areas? If so, what does that say about Australia? And should we mention these figures in a month that will have a national election?
Add to this – of the global breakdown – for fraudsters at employee level about 50% were male and 50% were female; at manager level only about 26% were female; and at executive level only 12.5% were female. Does this represent gender equity in the workplace?
These are all questions that I cannot answer – but I bet some has done a study somewhere.
What were the other highlights of the report?
1. The median loss from Financial Statements has more than doubled from $2,000,000 to $4,100,000.
2. Tips still account for over 40% of all initial detection of occupational frauds. Of these tips, almost half came from other employees in the vcitim business. The next best detection technique is management reviews which accounted for (only)15.4% of detections.
3. The most frequent fraud in all areas expect the US and Canada was Corruption. Billings schemes were the most popular in the US and Canada with Corruption a close second. Billing schemes were a close second in nearly all other areas.
4. Just over 60% of businesses surveyed for the report thought that internal audits were very important in controlling or preventing fraud, but internal audits only detected 13.9% of the frauds examined. Only 41% of businesses thought that having a Hot Line for tips was very important even though over 40% of frauds are detected that way.
There is one thing that I can say with certainty. If you have read this far, Sex in Fraud was a good title.