Small businesses are especially likely to fall victim to occupational fraud, according to a new report released by the Association of Certified Fraud Examiners.

The study of occupational fraud was based on data compiled from 959 cases that were investigated between January 2006 and February 2008. It found that the median loss suffered by organizations with fewer than 100 employees was $200,000, which was higher than the median loss in any other category, including the largest organizations. The most common fraud schemes at small businesses were check tampering and fraudulent billing.

Occupational fraud schemes tend to be very costly. The report estimates that U.S. organizations lose 7 percent of their annual revenues to fraud, or approximately $994 billion. The median loss caused by occupational fraud in organizations of all sizes was $175,000. More than a quarter of the frauds involved losses of at least $1 million.

Occupational frauds were most often committed by the accounting department or upper management. Occupational fraudsters are generally first-time offenders. The most commonly cited behavioral red flags were perpetrators living beyond their apparent means or experiencing financial difficulties at the time of the fraud.

However, implementation of anti-fraud controls appears to have a measurable impact on an organization's exposure to fraud. Organizations that conducted surprise audits suffered a median loss of $70,000, while those that did not had a median loss of $207,000. Nevertheless, tips from employees, vendors, customers or other sources seem to be more effective than audits and controls at uncovering fraud.

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