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.
Ellen Choi is the CEO of Edgefield Group, a consultancy that offers services at the intersection of AI, technology, and business transformation to solve Top 500 CPA firms' biggest challenges. She is the Co-Founder and Advisor at Aiwyn, a technology company helping accounting firms streamline their practice management. Aiwyn has been recognized with Forbes 100 Rising Stars, Boomer Visionary Award, and AccountingToday's Award. Her past includes working in Google' Finance team, Stanford engineering, and Harvard MBA. She is a serial entrepreneur with a passion for driving innovation in the accounting profession.
Jonathan Steele is the director of product management at Motus, the mobile workforce solution simplifying the reimbursement and management of all vehicle and device costs through personalized calculations.
Allison Henry serves as the vice president of professional and technical standards at the Pennsylvania Institute of CPAs. She oversees the PICPA's peer review and ethics programs, while facilitating the operation of eight state-wide technical committees.
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.
