2006 ACFE Report Reveals $652 Billion Lost to Fraud; Certified Fraud Examiners in High Demand.

AUSTIN, Texas -- The Association of Certified Fraud Examiners, the leading provider of anti-fraud training and education worldwide, announced today findings from the 2006 Report to the Nation on Occupational Fraud and Abuse, which will be printed in July 2006.

According to the Report, Certified Fraud Examiners (CFEs) estimate that the typical organization loses 5% of its annual revenues to fraud. If multiplied by the US Gross Domestic Product of $13.037 trillion (based on U.S. Commerce Department first quarter 2006 GDP growth estimate), that would translate to $652 billion lost to fraud.

The report also reveals fraudulent financial statements were the costliest form of occupational fraud, with a median loss of $2 million. Asset misappropriation was the most common type of occupation fraud, occurring in 91.5 percent of all reported cases, with a median loss of $150,000. Corruption occurred in 30.8 percent of all reported cases, with a median loss of $538,000.

Members of the media may download an online version of the complete 2006 Report to the Nation (PDF) here: http://www.acfe.com/about/press-release-06-20-2006.asp.

The findings come months after the founder and chairman of the ACFE, Joseph T. Wells, CFE, CPA, expressed fears that our nation's CPAs are not trained to fight what may seem to be an intractable battle against accounting fraud.

"As a group, CPAs are neither stupid nor crooked. But the majority are still ignorant about fraud," explains Wells, considered an international authority on the topic. "That's because for the last 80 years, untrained accounting graduates have been drafted to wage war against sophisticated liars and thieves. And as multi-billion dollar accounting failures have shown, it hasn't been much of a fight."

Although the Report's estimate of overall fraud losses is based on the collective insight of hundreds of anti-fraud professionals, the true amount of fraud taking place in U.S. businesses cannot really be known. "Fraud, by its nature, is hidden, and so the true amount of fraud taking place in U.S. businesses at any one time cannot be calculated," explains John Warren, General Council, ACFE. "Even attempts to measure the amount of fraud that has already been detected will lead to incomplete results."

Warren explains that many fraud cases go unreported, either because the victim organizations do not recognize that they have been defrauded, because they choose not to report the crimes for fear of bad publicity or simply because they do not want to deal with the repercussions. He also cites the lack of a central repository for collecting fraud-related data as an impediment to determining precisely how big the problem is. "The one thing we do know for certain," says Warren, "is that occupational fraud imposes tremendous costs on U.S. organizations."

With the cost of fraud on the rise, the demand for anti-fraud professionals continues to grow. In a recent interview, Chris Swecker, assistant director for the Criminal Investigative Division (CID) of the FBI, explained why CFEs are in high demand. "There is a lot of need for the Certified Fraud Examiner credential because it is a sophisticated certification used to unravel very complex schemes," he said. "Since the CFE skill set cuts across all of our disciplines we can place a CFE can in any area -- counter intelligence, cyber financial frauds, terrorism funding -- and be confident they will succeed.

Download a copy of the complete 2006 Report to the Nation (PDF) here: http://www.acfe.com/about/press-release-06-20-2006.asp.

Largest-ever anti-fraud conference in July

In an effort to combat fraud worldwide, more than 2,000 professionals are expected to gather at the largest anti-fraud event in the world, the 17th Annual ACFE Fraud Conference & Exhibition, July 9-14 at the Venetian Resort Hotel Casino in Las Vegas.

For more information about the ACFE's flagship conference, including the complete list of renowned speakers and information about sessions, highlights, workshops and exhibitors, visit: www.FraudConference.com.

National Fraud Awareness Week

The conference also marks the kick-off of National Fraud Awareness Week, bringing fraud awareness to the global fight against fraud. Official Supporters receive practical anti-fraud resources, including information on how to prevent fraud and a sample fraud policy for business, agencies or organizations. Visit www.FraudWeek.com for more information.

About the ACFE

The ACFE is the world's premier provider of anti-fraud training and education. Together with more than 37,000 members, the ACFE is reducing business fraud world-wide and inspiring public confidence in the integrity and objectivity within the profession. Certified Fraud Examiners (CFEs) on six continents have investigated more than 2 million suspected cases of civil and criminal fraud. For more information about the ACFE and the 2006 Report to the Nation, visit www.ACFE.com.