An analysis of the victims of occupational fraud: a Canadian perspective

Abstract

Purpose This paper aims to describe and explain characteristics of organizations that are victims of occupational fraud. Design/methodology/approach This study is based on a 2006 occupational fraud web survey conducted in Canada by the Association of Certified Fraud Examiners (ACFE). Findings The analysis shows that occupational fraud losses are quite large, accounting for a median loss of C$187,500 and a mean loss of C$1,142,494. These losses represent, respectively, 0.3 percent (median) and 9 percent (mean) of the victim organization's annual sales. Private companies, not‐for‐profit organizations and small businesses are particularly vulnerable to relatively larger fraud losses. It is also shown that the smaller the organization the more likely fraud losses will be relatively larger. Research limitations/implications This study contributes to academia by measuring the statistical significance of the cost of occupational fraud per various organizational characteristics. Practical implications This study is useful to regulatory agencies and anti‐fraud professionals because it provides information about what types of organizations are more vulnerable to fraud, thus indicating where prevention and detection efforts should be directed. Originality/value This paper is based on proprietary data owned by the ACFE and is the first to analyze the statistical significance of the consequences (cost) of occupational fraud in Canada.

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