In 2008, companies collectively lost more than $994 billion due to fraud and more than one- quarter of U.S. businesses experienced losses of at least $1 million each, according to a recent survey by the Association of Certified Fraud Examiners (ACFE).
What’s more, ACFE found that typical fraud incidents lasted two years, and that most often, it’s a lack of internal controls that allows the fraud to occur.
Statistics like these are staggering, and they’re the impetus behind International Fraud Awareness Week, an initiative designed to cast a spotlight on this massive –and urgent –problem.
Of course, when it comes to fraud, the bottom line isn’t the only thing at risk. Fraud also threaten intellectual property, reputation, warranties and returns, security, and in some cases, even the end users’ health and safety, as well.
But, what can companies do to reduce their risk of fraud? For starters, the ACFE suggests these basic steps:
- Establish and communicate a fraud policy
- Identify and evaluate your fraud risks
- Establish an anti-fraud hotline
- Utilize anti-fraud resources, such as the sample fraud policy , the fraud prevention check-up , and others available at the ACFE website.
For other suggestions pertaining specifically to counterfeit parts in the supply chain, see this earlier post.