Research conducted by the Association of Certified Fraud Examiners (ACFE) shows that the typical organization loses an estimated 5 percent of its revenues to fraud each year, and more than 85 percent of all occupational fraud cases involve employee theft. The threat of fraud and embezzlement is not only significant; it is universal. Put simply, any company that employs individuals is at risk of losing assets to employee theft. Combating this risk through proactive fraud prevention measures is more cost-effective and reputation-preserving than spending resources on detection, investigation and loss recovery. Therefore, an effective fraud prevention program is crucial to protecting an organization’s assets.
Arguably the most effective mechanism for preventing fraud is convincing employees that attempts to defraud the company will be quickly detected. When deciding to steal, fraudsters typically do not anticipate being caught. In fact, many fraudsters start out believing that they will only steal once and then put the money back as soon as they can, before anyone notices — although most never do. Consequently, increasing the perception of detection — even more than the threat of sanctions — can effectively deter many tempted employees from engaging in that first fraudulent act.