In its 2016 Report on Occupational Fraud and Abuse, the Association of Certified Fraud Examiners (ACFE) reported that the cost of fraud to U.S. organizations averages 5% of revenues each year. For the cases in the ACFE’s 2016 Report, the total loss caused by fraud exceeded $6.3 billion, with an average loss of $2.7 million per case.

According to the Report, the most common occupational fraud by far was asset misappropriation, occurring in more than 83% of cases. In 94.5% of all cases, the perpetrator made some effort to conceal the fraud, with creating/altering physical documents the most common method. Within organizations, the most prominent weakness contributing to frauds was a lack of internal controls, followed by overrides of existing controls.

Detecting fraud requires special abilities and procedures; regular financial statement audits are not specifically designed to uncover such activity. Identifying fraud and determining its cost to an organization are an essential first step. Once the impact of fraud and risks of further fraud are understood and quantified, management can make sound decisions to counter the fraud and invest appropriately in efforts to prevent it from happening again. 

Who performs a fraud investigation?

A Certified Fraud Examiner, a Certified Forensic Consultant or a trained CPA is competent to conduct a fraud investigation. Examiners must fully comprehend how to address and interpret accounting records when searching for concealment efforts.

Mr. Kasoff is a Certified Fraud Examiner (CFE) and a Certified Forensic Consultant (CFC). RSI’s staff includes highly trained professionals who have the skills, experience and background that are necessary to detect the various types of fraud.

A CFE is an anti-fraud expert, with demonstrated skills and knowledge in various critical areas. A CFE can handle the full range of tasks and issues, including fraudulent financial transactions, fraud investigations, the legal elements of fraud, and criminology and ethics. A CFC is a professional who has received intensive education in the application of forensics within the context of the American legal system. The CFC has received specific training in forensic examination and analysis as they relate to litigation; testifying in court and rendering reports to be used in court; and in applicable legal doctrines and principles.

RSI, under Mr. Kasoff’s direction, has successfully detected fraud in numerous engagements, in each case within one month of beginning the assignment.