Insights on Fraud – COVID Impact

August 24, 2022

The Association of Certified Fraud Examiners (ACFE) recently released its Occupational Fraud 2022: A Report to the Nations. Based on a polling of its members, the study presents a variety of statistics on based on reported cases of occupational fraud investigated between January 2020 and September 2021. Among the interesting statistics reported is the pandemic-related factors and the significance in the reported frauds. The chart below from the report summarizes the following pandemic-related factors:

  • Organizational staffing changes
  • Operational process changes
  • Internal control changes
  • Shift to remote work
  • Changes to strategic priorities
  • Technology challenges
  • Changes to anti-fraud program
  • Supply chain disruptions

The factors were ranked by significance they had on the reported occupational frauds with organizational staffing changes having the most significant impact (42%) to supply chain disruptions having the least significant impact (30%).

Circumstances that may be contributing to the significance of the pandemic on organizational staffing changes might include:

  • Less segregation of duties
  • Underqualified staff
  • Increased management override of controls
  • Lack of training for staff
  • Lack of job rotation/mandatory vacations

The pandemic has impacted business on several fronts so one change to the elements of Dr. Donald Cressey’s famous “fraud triangle” (pressure, opportunity, and rationalization), allows for fraud to occur. The above listed pandemic impacts are only a few of the changes to businesses and as time elapses more may emerge while these continue to evolve. As noted in the Report to the Nations, the reported cases were investigated between January 2020 and September 2021 so the frauds that occurred during the pandemic may be reflected in the next report planned for 2024.

To learn more about Aronson’s fraud investigation capabilities, or if you feel that your organization may be the victim of a fraud, contact Brittany Arnold at 240-364-2607 or Bill Foote at 301-231-6299.