It is an unfortunate fact of business life today that fraud is on the rise. According to a recent report of the Association of Certified Fraud Examiners:

• An estimated 6 percent of revenues is lost as a result of fraud nationwide. That adds up to losses of approximately $600 Billion for U.S. businesses annually.
• Small businesses are most vulnerable - with average losses of $127,500.
• Fraudulent financial statements are the most costly to businesses, with median losses at $4.25 million per scheme.
• The average fraud scheme lasts 18 months before it is detected.

Who commits fraud?

A number of factors are usually present when a fraud is committed:

• The perpetrator is facing some financial pressure.
• There is a perceived opportunity.
• Most often the perpetrator is in a supervisory position - losses caused by perpetrators older than 60 are 27 times higher than those caused by employees 25 and younger.
• The typical perpetrator is a first-time offender.

Forensic accounting is a company's best defense against lost revenues due to fraud. If you suspect that a partner or employee of your company has committed a malfeasance, rely on GSR to find the truth behind the numbers.