Companies Big and Small Face Asset Misappropriation Risks


Andi McNeal, CFE, CPA
ACFE Research Director

We all know that the specific risks faced by organizations vary as much as the nature of the organizations themselves. This is true for many fraud risks, as well. Financial reporting fraud is probably not a significant risk in a sole proprietorship that does not issue financial statements to external parties. Corruption risks are much less likely in small, service-based businesses, such as doctors’ offices, than in large, multinational manufacturing companies. But all entities that have employees — from mom-and-pop retail stores to government agencies to high-tech, global conglomerates — face the risk that those employees will misappropriate organizational resources. In fact, ACFE research shows that asset misappropriation schemes account for more than 85 percent of all occupational frauds, a finding that underscores the likelihood, significance and universal nature of this risk.

For years, we have included information on how to prevent, detect and investigate asset misappropriations as part of our various training offerings. But because all companies — of all sizes, in every industry and in every country — are at risk for asset misappropriation schemes, we decided the topic merited its own course that focuses specifically on this threat to organizations. Our new two-day seminar in Las Vegas, Controlling the Risk of Asset Misappropriation, dives deeper into how you can protect youself from these schemes than any of our other course offerings have previously done.

In this new course, you will walk through numerous business processes common in most companies, from selling goods and collecting customer payments to paying vendors and processing payroll, and learn how to identify and assess weaknesses that could leave those processes vulnerable to dishonest employees. You will also learn about specific internal controls to help protect all organizational assets — cash, inventory, equipment, trade secrets and proprietary information — from being misappropriated. And, through the use of several video case studies, you will explore real-life asset misappropriation cases, discuss the contributing factors, and determine techniques that would have been helpful in deterring, detecting and examining those schemes.

Although asset misappropriations don’t make front-page headlines as often as financial statement shenanigans or FCPA violations, the potential impact of these schemes should not be. Controlling the Risk of Asset Misappropriation is designed to help you identify and protect against common pitfalls that expose company assets to misappropriation — long before the wrong employee exploits such weaknesses.