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In fraud & corruption, organisations prone to believe ‘alternative facts’

2017 Fraud Survey from ACL showed that business leaders are running their organisations in an ‘alternate reality,’ with a shockingly inaccurate perception of their fraud environment. More than 80 percent of respondents said their organization has “medium to no” exposure to fraud, despite industry research showing that fraud occurs in nearly every organisation, with more than 2,300 studied losing over $6.3 billion.[1] 

ACL survey & results

ACL, a risk management software provider helping governments and companies around the world stamp out fraud and corruption, polled more than 500 audit, compliance and risk management professionals on their attitudes toward and knowledge of fraud risk and anti-fraud practices. Infographic of survey results:

Source & Copyright©2017 - ACL

ACL and other comments:

  • “As the phenomena of ‘fake news’ and ‘alternative facts’ permeate the U.S. landscape, it is interesting to see how disconnected many executives are from the true prevalence of fraud and corruption in their organizations,” commented Dan Zitting, chief product officer at ACL. “It is not uncommon for our team to run simple data analytics for a client and find numerous instances of potential fraud to be investigated.” (Nearly two-thirds of respondents (63 percent) reported that a majority of fraud committed in their organisations is not detected, and more than 75 percent said that at least some of the fraud that is detected goes unreported.)
  • “If senior management thinks fraud, waste or abuse is non-existent in their company, they are probably kidding themselves,” noted Steve Hummer, director of internal audit for Farm Bureau Insurance of Michigan. “By conducting a thorough, retroactive audit using modern data analytics tools, we uncovered more than a million dollars in losses from claims that had been incorrectly processed—or not processed at all. At some companies, they could even be fraudulently processed.”

Disturbing pressure

Respondents also echoed recent findings that fraud professionals can feel pressure to suppress or alter fraud findings from senior leadership, direct managers and even peers. The existence of this internal pressure is not a surprise to most, as it has been revealed quite often in recent studies. However, the survey confirmed that this pressure comes from all sides, including coworkers and audit committees, making it that much harder to overcome.

“As long as companies refuse to admit that fraud exists, the fraud will continue,” added Zitting. “As unscrupulous employees and vendors realize the company’s ignorance, the problem has great potential to grow.”


[1] “Report to the Nations on Occupational Fraud and Abuse.” Association of Certified Fraud Examiners (ACFE). 2016.

CTMfile take: Trump isn’t the only one to favour ‘alternative facts’, but accepting this behaviour hurts everyone in the long run. Surely this doesn’t happen in your organisation?

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This item appears in the following sections:
Fraud Prevention
ID Systems & Services in Fraud Prevention
Minimizing Fraud Procedures
Minimizing Payment Fraud

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