Introduction:
In this crucial presentation to the Phoenix, AZ Chapter of The Financial Executives Networking Group, we had the privilege to learn from Tim Tribe, a seasoned expert in forensic accounting, with extensive experience in dissecting occupational fraud. Holding numerous prestigious credentials such as Certified Public Accountant, Certified Fraud Examiner, and more, Tribe brings over 27 years of unique expertise to the table.
Presentation Overview:
Tribe’s presentation was a window into the complex world of occupational fraud, focusing on three main types of fraud: Asset Misappropriation, Corruption, and Financial Statement Fraud. He presented alarming statistics, revealing the harsh realities and the high prevalence of such fraudulent activities within organizations.
Breakdown of Key Points:
- Tribe begins by diving into Asset Misappropriation, citing that an astonishing 89% of fraud cases involve this particular aspect, with a median loss of $120,000. He elaborates that this primarily involves theft of cash, checks, and inventory.
- Next, Tribe highlights Corruption, noting its presence in 48% of fraud incidents and its hefty median loss of $200,000. He explains that corruption primarily involves individuals misusing their positions for selfish gains.
- Lastly, Tribe discusses Financial Statement Fraud. Though this type of fraud only constitutes 5% of cases, it leads to a significantly higher median loss of an eye-watering $766,000. This fraud occurs when companies manipulate their accounting records to portray an inaccurate financial status.
Participant Interactions:
During the course of the presentation, participants launched several inquiries, one of the most notable being regarding the recidivism rate in financial fraud cases. Tribe responded that the rate is worryingly high, standing at more than 80% – indicating many culprits, though often without a criminal record, repeatedly carry out fraudulent activities within various organizations.
Conclusion and Takeaways:
As a whole, Tribe’s presentation shed light on the often overlooked prevalence and critical impact of occupational fraud. His insights into the subject brought forth the significance of early detection mechanisms and robust internal controls. For CFOs, Controllers, and Treasurers, Tribe’s message is clear – vigilance against fraudulent activities is paramount to safeguarding the financial health of any organization.
Acknowledgment:
Our sincere thanks to Tim Tribe for his invaluable insights and leadership in forensic accounting, greatly enriching our understanding of the complexities of occupational fraud and its potential consequences on businesses.
About Tim Tribe
Tim D. Tribe, CPA/CFF, CFE, CICA is the founder and Managing Member of Ingen Financial Forensics. He holds degrees from Arizona State University and Brigham Young University. He has approximately twenty-seven years of experience as a Big 4 auditor, as an adjunct college instructor, and as a forensic accountant. He has spoken on fraud throughout the U.S., in London, U.K. and in Melbourne, Australia. His practice focuses on fraud examinations, litigation and expert witness services, and insurance claim support.
