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Introduction

Exhibit 1.19

2006 National Fraud Survey: Percent of Cases by Organization Type

Private company

36.8%

Organization Type

Public company

Government

17.6%

31.7%

Not-for-profit

13.9%

0%

10%

20% Percent of Cases

30%

40%

Size of the ictim Organization

The data for median loss per number of employees confirms what we always sus- pected, but did not know quantitatively. Accountants would logically conclude that small organizations, those with 100 employees or less, are particularly vulnerable to occupational fraud and abuse. The results from the National Fraud Survey bear this out, as losses in the smallest companies were larger than those in the organizations with the most employees. We theorize that this phenomenon exists for two reasons. First, smaller businesses have fewer divisions of responsibility, meaning that fewer people must perform more functions. One of the most common types of fraud en- countered in these studies involved small business operations that had a one-person

Exhibit 1.20

2006 National Fraud Survey: Median Loss by Organization Type

Private company

$ 210,000

Organization Type

Public company

Government

$ 100,000

$ 200,000

Not-for-profit

$ 100,000

$0

$ 50,000

$100,000 $150,000 Median Loss

$ 200,000

$ 250,000

35

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