Small businesses taking the hit with fraud - Small Business Association of Michigan

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Small businesses taking the hit with fraud

Small businesses taking the hit with fraud

Article courtesy Rehmann

Is it surprising that when small businesses suffer a fraud, they lose twice as much as larger businesses? In its 2018 Global Study on Occupational Fraud and Abuse, the Association for Certified Fraud Examiners (ACFE) reports businesses with 100 or fewer employees suffer median losses per fraud incident of $200,000, whereas larger businesses (100 or more employees) suffer median losses per incident of $100,000. Half of the cases studied for the report were the result of internal control weaknesses, which explains some of the big business/small business disparity. Small businesses often lack the resources to implement oversight, dual controls and other fraud prevention strategies. Other findings include:

  • Tipsters report 40 percent of all frauds
  • Employees provide more than half of all tips
  • The longer an employee stayed at a company, the more they took
  • Owner- and executive-level frauds result in median losses of $850,000

 

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