Fraud is continuing to increase this year, in part due to the COVID-19 pandemic, according to a new survey by the Association of Certified Fraud Examiners.
The report found that 79 percent of anti-fraud professionals have seen an increase in the overall level of fraud as of November, compared to 77 percent in August and 68 percent in May. Thirty-eight percent of the respondents said in November the increase has been significant, compared to 34 percent in August and 25 percent in May.
Smadar Rinat, CPA, CFE, is a principal in the international and audit and accounting departments of Prager Metis CPAs, a member of Prager Metis International Group. She has over 25 years of experience in the accounting industry. She specializes in providing audit, review, compilation, and accounting services to clients in a wide range of industries, including media and entertainment, technology, not-for-profit, professional services, manufacturing and distribution, and real estate. She is also the leader of the firm's Israel group. In this role, she offers financial and business strategy consultancy to Israeli companies working in or looking to develop operations in the U.S., as well as domestic companies interested in expanding their businesses into Israel.
Mark S. Bonta is the Executive Director of the Recovery Jobs Foundation, an initiative focused on reintegrating individuals in recovery into the workforce. With 20 years of experience as a Plant Director and 6 years of experience as a recovery-friendly employer, he pioneered the New Hampshire Recovery Friendly Workplace Initiative (NH-RFWI) as one of the first RFW's in the nation. Mark's leadership has been recognized with several awards, including the 2022 Littleton Area Chamber of Commerce Citizen of the Year Award and the 2023 White Mountains Community College President's Community Partner Award. Currently formalizing the Recovery Jobs Foundation, he also serves on the NH-RFWI Advisory Council, and as Secretary of the Florida Recovery-Friendly Workplace Coalition.
Alex Konanykhin is the co-founder and CEO of Unicoin.
Cyber fraud, payment fraud (such as schemes with debit and credit cards) and identity theft are the three top fraud schemes seeing increases, according to anti-fraud professionals.
The largest increase in observed fraud was in financial statement fraud, with 7 percent more anti-fraud professionals reported seeing financial statement fraud in November, compared to August. That could be because as companies continue to see their profits drop, they feel more pressure to cook the books.
The survey also found 77 percent of anti-fraud professionals report that investigating and preventing fraud is more challenging now, while 71 percent said detecting fraud is more challenging as a result of the pandemic.
ACFE members anticipate the fraud trend will continue, even as vaccines have begun rolling out this week in the U.S. Ninety percent of the survey respondents expect a further increase in the level of fraud over the next 12 months, with 44 percent predicting the change is likely to be significant.
Nearly half (48 percent) of the organizations polled expect to increase their investments in anti-fraud technology, and 38 percent intend to raise the use of fraud-related consultants or other external resources. Budgets for anti-fraud training and professional development are experiencing a similar increase (according to 37 percent of the organizations polled), but nearly one-quarter (24 percent) anticipate a decrease in this area. The budget component most likely to see decreases is travel for anti-fraud staff, which shouldn’t be surprising given the plunging levels of air travel in general over this past year, with 38 percent of the survey respondents expecting a reduction in funds for travel in the year ahead.
