Asia Pacific Fraud

REPORT TO THE NATIONS
O N O C C U PAT I O N A L F R A U D A N D A B U S E
2016 ASIA-PACIFIC EDITION
Contents
Introduction.............................................................................................................. 3
How Occupational Fraud Is Committed.........................................................................5
Frequency and Median Loss of Occupational Fraud Schemes............................................................................ 5
Detection of Fraud Schemes................................................................................... 8

Initial Detection of Occupational Frauds............................................................................................................... 8
Formal Reporting Mechanism Used by Whistleblower........................................................................................ 9
Party to Whom Whistleblower Initially Reported................................................................................................ 10
Impact of Hotlines............................................................................................................................................... 11
Victim Organizations.............................................................................................. 12
Type of Organization........................................................................................................................................... 12
Size of Organization............................................................................................................................................ 13
Industry of Organization...................................................................................................................................... 14
Anti-Fraud Controls at the Victim Organization.................................................................................................. 16
Effectiveness of Controls................................................................................................................................ 17
Internal Control Weaknesses That Contributed to Fraud......................................................................................... 19
Perpetrators............................................................................................................ 20
Perpetrators Position.......................................................................................................................................... 21
Perpetrators Department................................................................................................................................... 22
Perpetrators Gender........................................................................................................................................... 23
Perpetrators Criminal and Employment History................................................................................................ 25
Perpetrators Criminal Background................................................................................................................. 25
Perpetrators Employment History.................................................................................................................. 25
Behavioral Red Flags Displayed by Perpetrators................................................................................................ 26
Case Results........................................................................................................... 27
Criminal Prosecutions and Civil Suits................................................................................................................. 27
Recovery of Losses............................................................................................................................................. 28
Action Taken Against Perpetrator........................................................................................................................ 29
Methodology.......................................................................................................... 30
Analysis Methodology........................................................................................................................................ 30
About the ACFE...................................................................................................... 31
REPORT TO THE NATIONS: ASIA-PACIFIC EDITION
Introduction
Fraud is a global issue, but the way it affects organizations in different geographical regions can vary. While the
ACFEs 2016 Report to the Nations on Occupational Fraud
and Abuse contains several comparisons of fraud data
based on region, we wanted to provide a more robust
analysis of occupational fraud trends in these areas. Consequently, we present this regional report that provides a
closer view of the cases from the Asia-Pacific region that
were included in our global study.
Introduction
For this report, we looked at 221 cases of occupational fraud against victim organizations in the Asia-Pacific region
that were investigated between January 2014 and October 2015. Figure 1 shows the breakdown of these cases by the
country in which the fraud occurred.
Figure 1: Breakdown of Cases by Country

Country
Australia
Number of Cases
26
1
Cambodia
China
64
East Timor
Fiji
Indonesia
42
3
Japan
Laos
Malaysia
11
New Zealand
10
Philippines
29
3
Samoa
Singapore
14
Solomon Islands
South Korea
Taiwan
Thailand
Vietnam
This report contains information on the specific fraud schemes, victim organizations demographics and controls,
detection techniques, fraud perpetrators, and case results.1 (Readers should note that analyses involving fraud losses
are presented in terms of U.S. dollars [USD], which is how respondents reported this information in our Global Fraud
Survey.) Our hope is that readers will use this and our other regional reports to help tailor fraud prevention, detection,
and investigation strategies to the risks in their respective regions.
For a glossary of terms used in this report, please see page 90 of the 2016 Report to the Nations on Occupational Fraud and Abuse.
How Occupational
Fraud Is Committed
Frequency and Median Loss of

Occupational Fraud Schemes
Occupational fraud schemes can be broken down into three
involved the misappropriation of organizational assets;

however, these schemes also caused the smallest median
loss of the three categories, at USD 200,000 per case.
primary categories: asset misappropriation, corruption, and
In contrast, financial statement frauds were the costliest
financial statement fraud. Of these, asset misappropriation
type of occupational fraud by far, with a median loss of
schemes were by far the most common form of occupational
USD 2,000,000, but were the least common, occurring in
frauds among the cases in the Asia-Pacific region, which is
fewer than 11% of cases. Corruption schemes fell in the
consistent with both our previous findings and our global
middle in both measures, at 48.4% of cases and with a
data for 2016. More than 80% of the Asia-Pacific cases
median loss of USD 285,000.
median loss for All

ASIA-PACIFIC Cases
USD 245,000
median duration for
All ASIA-PACIFIC Cases
12 months
How Occupational Fraud Is Committed
TYPE OF FRAUD
Figure 2: Occupational Frauds by CategoryFrequency
80.1%
Asset
Misappropriation
48.4%
Corruption
10.9%
Financial
Statement Fraud
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PERCENT OF CASES
TYPE OF FRAUD
Figure 3: Occupational Frauds by CategoryMedian Loss
Asset
Misappropriation
$200,000
Corruption
$285,000
Financial
Statement Fraud
$2,000,000
$0
$400,000
$800,000
$1,200,000
MEDIAN LOSS
$1,600,000
$2,000,000
How Occupational Fraud Is Committed

To expand the analysis of the types of occupational frauds that affect organizations in the Asia-Pacific region, we further
broke down the asset misappropriation cases into nine sub-categories; Figure 4 illustrates the frequency of these fraud
schemes along with the other two primary categories (corruption and financial statement fraud). When compared in this
way, our data illustrates the relatively high risk of corruption for organizations in the Asia-Pacific region; corruption was
more than twice as common as any other sub-scheme type among the Asia-Pacific cases in our study.
Figure 4: Frequency of Fraud Schemes
Corruption
48.4%
Non-Cash
22.2%
Billing
20.4%
SCHEME TYPE
Expense Reimbursements
18.1%
Financial Statement Fraud
10.9%
Cash on Hand
10.4%
Check Tampering
10.0%
Skimming
9.0%
Cash Larceny
Register Disbursements
Payroll
7.7%
4.5%
2.7%
0%
10%
20%
30%
40%
50%
60%
PERCENT OF CASES
Concealment of Fraud Schemes

In addition to gathering information about how the frauds were perpetrated, we also asked survey respondents how the perpetrators
attempted to conceal their schemes. While the sample size of cases from the Asia-Pacific region in which concealment methods
were provided was quite small, illustrated below are the six most common methods used by the perpetrators in our study.
Altered Physical
Documents
Destroyed Physical
Documents
Created Fraudulent
Transactions in the
Accounting System
Created Fraudulent
Physical Documents
Created Fraudulent
journal entries
altered electronic
documents or files
Detection of Fraud Schemes
Initial Detection of Occupational Frauds

We asked respondents to identify how occupational
fraud schemes were initially detected, and the results are
shown in Figure 5. The most common detection method
among cases in the Asia-Pacific region was tips (45.2%)
almost three times more common than the next detection

method, internal audit (15.8%). Management review was
the initial detection method for 13.1% of cases. These
were also the three most common methods of detection
in our global study.
Figure 5: Initial Detection of Occupational Frauds
Tip
45.2%
Internal Audit
15.8%
DETECTION METHOD
Management Review
13.1%
External Audit
5.9%
Account Reconciliation
5.0%
Notified by Law Enforcement
4.5%
Other
4.1%
By Accident
Document Examination
2.7%
1.4%
IT Controls
0.9%
Surveillance/Monitoring
0.9%
Confession
0.5%
0%
10%
20%
30%
PERCENT OF CASES
40%
50%

Formal Reporting Mechanism Used by Whistleblower
By understanding the methods whistleblowers use to report fraud, organizations can help optimize their own formal
reporting mechanisms. In the Asia-Pacific region, the majority of whistleblowers (51.9%) used an email reporting
mechanism, while 37% used a web-based/online form. While telephone hotlines were the most common reporting
mechanism in our global data, they were used in just 27.8% of Asia-Pacific cases.
FORMAL REPORTING MECHANISM USED
Figure 6: Formal Reporting Mechanism Used by Whistleblower
Email
51.9%
Web-Based/Online Form
37.0%
Telephone Hotline
27.8%
Mailed Letter/Form
22.2%
Other
Fax
11.1%
1.9%
0%
10%
20%
30%
40%
50%
60%
PERCENT OF TIPS
Top Three Sources of Tips

Understanding where tips about fraudulent conduct tend to originate helps organizations tailor their anti-fraud reporting and training
programs to be more effective. In cases that were detected by tip, we asked survey respondents to identify the source. The infographic below shows the top three identified sources in Sub-Saharan Africa, which include employees (45.3%), customers (28.3%),
and anonymous parties (12.3%). The data indicates that while employees are the single largest source of tips, more than half of whistleblowers in Sub-Saharan Africa were from other sources. Given that customers and anonymous sources also provided a significant
number of tips, organizations should consider promoting reporting hotlines to external parties
45+55+O 28+72O 12+88O

45%
EMPLOYEE
28%
Customer
12%
OTHER

Party to Whom Whistleblower Initially Reported
Another point of interest regarding the initial detection of fraud by tip is to whom the whistleblower reported.
Understanding where whistleblowers tend to report fraud within an organization can help anti-fraud professionals
develop more effective and efficient reporting programs. In the Asia-Pacific region, the direct supervisor of the
whistleblower was the most commonly identified party reported to (20.9%), followed by executives (18.6%) and
internal audit teams (16.3%).
PA R T Y R E P O R T E D TO
Figure 7: Party to Whom Whistleblower Initially Reported
Direct Supervisor
20.9%
Other
20.9%
Executive
18.6%
Internal Audit
16.3%
Coworker
11.6%
External Audit
9.3%
Fraud Investigation Team
7.0%
Board or Audit Committee

Law Enforcement or Regulator
0%
4.7%
2.3%
5%
10%
15%
PERCENT OF TIPS
10
20%
25%

Impact of Hotlines
We also analyzed how the presence of a reporting hotline affected the method by which fraud was initially detected;
the results of this analysis are shown in Figure 8. There was a substantial contrast between how organizations with and
without hotlines initially detected fraud. More than half of the cases in organizations with a hotline were detected by a
tip, compared to only 35.2% of cases in organizations without a hotline in place.
Figure 8: Impact of Hotlines on the Top Six Detection Methods
51.5%
DETECTION METHOD
Tip
13.2%
35.2%
20.6%
Internal Audit
8.5%
9.6%
Management Review
21.1%
3.7%
1.4%
By Accident
Organizations
With Hotlines
3.7%
External Audit
8.5%
Organizations
Without Hotlines
3.7%
4.2%
Notified by Law Enforcement

0%
10%
20%
30%
40%
50%
60%
PERCENT OF CASES
11
Victim Organizations
As part of our survey, we asked respondents to provide

information about the organization that was victimized by
the fraud scheme, including the entitys type, size, and
industry, as well as the mechanisms the organization had
in place to help prevent and detect fraud.
Type of Organization
Figure 9 depicts both the median loss and percent of cases
based on the type of organization that was victimized. Publicly and privately held companies combined represented
nearly 80% of the cases reported to us. Although government agencies represented only 14% of the cases, they
suffered the highest median loss of USD 500,000 per case.
Figure 9: Type of Victim OrganizationFrequency and Median Loss
$600,000
50%
44.8%
MEDIAN LOSS
40%
34.4%
$400,000
35%
30%
25%
$300,000
20%
$205,000
$200,000
14.0%
10%
$100,000
$0
15%
3.6%
Public Company
Private Company
Government
Other*
3.2%
Not-for-Profit*
5%
0%
T Y P E O F V I C T I M O R G A N I Z AT I O N
Median Loss
*Not-for-Profit and Other categories had insufficient responses for median loss calculation.
12
Percent of Cases
PERCENT OF CASES
$400,000
45%
$500,000
$500,000
Size of Organization
As reflected in Figure 10, the cases in the Asia-Pacific region were fairly evenly distributed based on the size of the victim
organization. However, the largest organizations (i.e., those with more than 10,000 employees) suffered the highest
median loss by far, at USD 700,000almost three times higher than the median loss in any other category.
Figure 10: Size of Victim OrganizationFrequency and Median Loss

30%
$800,000
26.6%
$700,000
$700,000
25.7%
22.0%
25.7%
25%
MEDIAN LOSS
20%
$500,000
15%
$400,000
$300,000
$200,000
$250,000
5%
$100,000
$100,000
$0
10%
$200,000
<100
100999
PERCENT OF CASES
$600,000
1,0009,999
10,000+
0%
NUMBER OF EMPLOYEES
Median Loss
Percent of Cases
13
Industry of Organization
Figure 11 categorizes the cases reported to us by industry of the victim organization. Manufacturing, banking and financial
services, and retail were the most represented sectors in the fraud cases we examined. However, while this data shows
the distribution of cases from our survey, it does not necessarily suggest that certain industries are more at risk of fraud
than others. Our data was collected through a survey of Certified Fraud Examiners (CFEs), so this distribution primarily
reflects the industries for which CFEs typically provide services in the Asia-Pacific region.
Figure 11: Industry of Victim Organization
Manufacturing
17.2%
Banking and Financial Services
12.2%
Retail
10.0%
Government and Public Administration
8.1%
Technology
6.8%
Other
6.3%
Services (Other)
4.5%
Agriculture, Forestry, Fishing, and Hunting
3.6%
Insurance
3.6%
INDUSTRY
Health Care
3.2%
Utilities
3.2%
Education
2.7%
Mining
2.7%
Oil and Gas
2.3%
Real Estate
2.3%
Transportation and Warehousing
2.3%
Construction
1.8%
Telecommunications
1.8%
Arts, Entertainment, and Recreation
1.4%
Communications and Publishing
1.4%
Services (Professional)
Wholesale Trade
Religious, Charitable, or Social Service
0%
1.4%
0.9%
0.5%
2%
4%
6%
8%
10%
12%
PERCENT OF CASES
14
14%
16%
18%
20%
In Figure 12, industries with more than ten cases reported to us are sorted by median loss. Government and public
administration suffered the highest median loss of USD 1,000,000. Other industries with significant median losses
included technology and manufacturing (USD 600,000 and USD 500,000, respectively).
Figure 12: Industry of Victim Organization (Sorted by Median Loss)

Number of Cases
Percent of Cases
Government and Public Administration
Industry
18
8.1%
Median Loss
$1,000,000
Technology
15
6.8%
$600,000
Manufacturing
38
17.2%
$500,000
Services (Other)
10
4.5%
$275,000
Banking and Financial Services
27
12.2%
$220,000
Retail
22
10.0%
$150,000
15
Anti-Fraud Controls at the Victim Organization
We asked survey respondents which, if any, of several anti-fraud controls were in place at the victim organization at the
time the fraud occurred. External audits of the organizations financial statements were the most commonly implemented
control. As reflected in Figure 13, 88.2% of victim organizations in the Asia-Pacific region in our study had their financial
statements audited by an independent auditor. Other common controls among these organizations were a formal code
of conduct, an internal audit department, and management certification of the financial statements.
Figure 13: Frequency of Anti-Fraud Controls

External Audit of F/S
88.2%
Code of Conduct
85.2%
Internal Audit Department
83.6%
Management Certification of F/S
80.2%
ANTI-FRAUD CONTROL
External Audit of ICOFR
74.5%
Management Review
72.3%
Independent Audit Committee
68.1%
Hotline
65.7%
Fraud Training for Employees
53.3%
Fraud Training for Managers/Executives
50.8%
Employee Support Programs
48.3%
Anti-Fraud Policy
46.8%
Dedicated Fraud Department, Function, or Team
44.4%
Surprise Audits
41.8%
Proactive Data Monitoring/Analysis
34.4%
Formal Fraud Risk Assessments
32.6%
Job Rotation/Mandatory Vacation

Rewards for Whistleblowers
0%
24.6%
7.8%
10%
20%
30%
40%
50%
60%
70%
PERCENT OF CASES
Key:
External Audit of F/S = Independent External Audits of the Organizations Financial Statements
Management Certification of F/S = Management Certification of the Organizations Financial Statements
External Audit of ICOFR = Independent External Audits of the Organizations Internal Controls Over Financial Reporting
16
80%
90%
100%
Effectiveness of Controls
To explore the effectiveness of various anti-fraud controls, we compared cases where a certain control had been in
place at the time of fraud versus cases where the control was not in place. We then measured the size of the loss and
the duration of the fraud in each group. As shown in Figure 14, the presence of many controls was associated with a
lower median loss. It is worth noting that in our global data, every control was associated with a lower median loss,
whereas in the Asia-Pacific region four controls showed a negative correlation. It is unclear why we see this result in our
Asia-Pacific data but not in our global study. Similarly, ten of the 18 controls corresponded with quicker fraud detection
(see Figure 15).
Figure 14: Median Loss Based on Presence of Anti-Fraud Controls

Control
Percent of Cases
Control Not
in Place
Control in Place
Percent Reduction
7.8%
$120,000
$300,000
60.0%
External Audit of Financial Statements
88.2%
$210,000
$447,000
53.0%
24.6%
$192,000
$310,000
38.1%
48.3%
$202,000
$325,000
37.8%
Surprise Audits
41.8%
$200,000
$320,000
37.5%
34.4%
$200,000
$300,000
33.3%
53.3%
$200,000
$300,000
33.3%
Anti-Fraud Policy
46.8%
$220,000
$285,000
22.8%
32.6%
$215,000
$260,000
17.3%
Management Review
72.3%
$215,000
$260,000
17.3%
83.6%
$240,000
$270,000
11.1%
50.8%
$220,000
$245,000
10.2%
Hotline
65.7%
$240,000
$245,000
2.0%
Management Certification of Financial Statements
80.2%
$218,000
$220,000
0.9%
68.1%
$245,000
$205,000
-19.5%
Code of Conduct
85.2%
$250,000
$205,000
-22.0%
44.4%
$300,000
$245,000
-22.4%
External Audit of Internal Controls over Financial Reporting
74.5%
$250,000
$200,000
-25.0%
17
Figure 15: Median Duration of Fraud Based on Presence of Anti-Fraud Controls
Control
Control in Place
Control Not
in Place
Percent Reduction
External Audit of Financial Statements
88.2%
12 months
25 months
52.0%
83.6%
12 months
21 months
42.9%
Code of Conduct
85.2%
12 months
21 months
42.9%
34.4%
10 months
15 months
33.3%
24.6%
9 months
12 months
25.0%
Hotline
65.7%
12 months
16 months
25.0%
External Audit of Internal Controls over Financial Reporting
74.5%
12 months
16 months
25.0%
Surprise Audits
41.8%
12 months
15 months
20.0%
68.1%
12 months
15 months
20.0%
Management Review
72.3%
12 months
13 months
7.7%
7.8%
12 months
12 months
0.0%
32.6%
12 months
12 months
0.0%
44.4%
12 months
12 months
0.0%
Anti-Fraud Policy
46.8%
12 months
12 months
0.0%
50.8%
12 months
12 months
0.0%
53.3%
12 months
12 months
0.0%
48.3%
12 months
12 months
0.0%
Management Certification of Financial Statements
80.2%
12 months
12 months
0.0%
18
Percent of Cases
Internal Control Weaknesses That Contributed to Fraud
Survey respondents also provided information about the internal control breakdowns that contributed to the fraud.
A straightforward lack of controls was primarily to blame in more than one-quarter of cases in the Asia-Pacific region,
making this the top contributing factor. In another 24.1% of the frauds, existing controls were overridden by the perpetrator,
and in nearly 17% of cases, a poor tone at the top was the main factor contributing to the scheme.
Figure 16: Primary Internal Control Weakness Observed by CFE

Lack of Clear Lines of Authority
1.8%
Other
3.6%
Lack of Employee Fraud Education
3.6%
Lack of Independent Checks/Audits

1.8%
Lack of Competent Personnel in Oversight Roles

6.4%
Lack of Internal Controls

25.9%
Lack of Management Review

15.9%
Override of Existing Internal Controls

24.1%
6.6%
2.9%
Poor Tone at the Top
16.8%
19
Perpetrators
We asked survey respondents to provide information

about the fraud perpetrators they investigated, including
the fraudsters level of authority, the department where
he or she worked, the perpetrators gender, and the be-
20
havioral signs that the fraudster had exhibited prior to or

during commission of the fraud.2
2
In cases where more than one perpetrator was involved, the data on perpetrators relates to the
principal perpetrator, which we defined as the person who worked for the victim organization and
who was the primary culprit.
Perpetrators
Introduction
Perpetrators Position
Occupational fraud losses are strongly correlated with the fraudsters level of authority, as seen in Figure 17. The median
loss in frauds committed by owners/executives was USD 1,125,000, which was more than three times higher than losses
caused by managers and more than 14 times higher than losses caused by employees. High-level fraudsters tend to have
greater ability to override internal controls and greater access to organizational assets than their lower-level counterparts,
which might explain why their frauds tend to be so much larger.
Figure 17: Position of PerpetratorFrequency and Median Loss
$1,200,000
42.1%
45%
$1,125,000
40%
$1,000,000
35%
33.6%
MEDIAN LOSS
30%
25%
$600,000
20%
20.6%
$400,000
15%
$350,000
PERCENT OF CASES
$800,000
10%
$200,000
5%
$78,000
3.7%
$0
0%
Employee
Manager
Owner/Executive
Other*
P O S I T I O N O F P E R P E T R ATO R
*Other category had insufficient responses for median loss calculation.
Median Loss
Percent of Cases
21
Perpetrators
Perpetrators Department
Figure 18 shows the departments where the fraudsters in the Asia-Pacific region worked within their organizations.
When combined, the seven most common departments (sales, operations, purchasing, executive/upper management,
finance, accounting, and customer service) accounted for 76.3% of all cases. These seven departments also made up
76% of all cases in our global study.
Figure 18: Department of PerpetratorFrequency
Sales
16.3%
Operations
14.9%
D E PA R T M E N T O F P E R P E T R ATO R
Purchasing
13.0%
Executive/Upper Management
9.8%
Finance
8.8%
Accounting
8.4%
Other
7.4%
Customer Service
5.1%
Warehousing/Inventory
4.2%
Marketing/Public Relations
3.3%
Manufacturing and Production
3.3%
Information Technology
1.4%
Human Resources
1.4%
Board of Directors
1.4%
Legal
0.5%
Research and Development
0.5%
Internal Audit
0.5%
0%
2%
4%
6%
8%
10%
12%
PERCENT OF CASES
22
14%
16%
18%
Perpetrators
Perpetrators Gender
Approximately 73% of occupational frauds in our Asia-Pacific cases were committed by males, as shown in Figure 19.
The gender distribution in the Asia-Pacific region was similar to that of our global study, which found that males committed
69% of occupational frauds worldwide.
Figure 19: Gender of PerpetratorFrequency
Female
26.9%
Male
73.1%
Since we first began tracking data on gender, we have consistently found that males tend to commit larger frauds than
females. This was true in the Asia-Pacific region, where the median loss caused by males (USD 320,000) was about
52% larger than the median loss caused by females (USD 210,000).
G E N D E R O F P E R P E T R ATO R
Figure 20: Gender of PerpetratorMedian Loss
$320,000
Male
$210,000
Female
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
MEDIAN LOSS
23
Perpetrators
PROFILE OF OCCUPATIONAL FRAUDSTERS IN ASIA-PACIFIC REGION
Median Age:
40
22+78
Education:
University
degree or
higher
78%
Tenure:
More than
5 years
Collusion:
cases with
2 or more
perpetrators
+54 57+43
46
54%
57%
MEDIAN LOSS IN COLLUSION CASES

WAS 182% HIGHER THAN IN
SINGLE-PERPETRATOR SCHEMES.
Perpetrators Criminal and Employment History

Perpetrators Criminal Background
The vast majority (87%) of fraud perpetrators in the Asia-Pacific region had never been charged or convicted of a
fraud-related offense prior to the cases in our study. This is consistent with data from our global report, as well as our
past research. Most occupational fraudsters tend to have no record of criminal conduct.
Figure 21: Criminal Background of Perpetrator
Other
1.4%
Charged But Not Convicted

6.2%
Had Prior Convictions
6.2%
Never Charged or Convicted

87.0%
24
Perpetrators
Perpetrators Employment History
Nearly 80% of occupational fraudsters in the Asia-Pacific region had never been terminated or punished for a fraud-related
offense prior to the cases in our study.
Figure 22: Employment Background of Perpetrator

Other
1.5%
Previously Terminated
6.7%
Previously Punished
13.4%
Never Punished or Terminated

79.1%
6.6%
2.9%
25
Perpetrators
Behavioral Red Flags Displayed by Perpetrators
OCCUPATIONAL FRAUD PERPETRATORS OFTEN EXHIBIT

CERTAIN BEHAVIORAL CHARACTERISTICS ASSOCIATED
WITH THEIR CRIMES.
The following behavioral red flags were identified in at least 20% of
asia-pacific fraud cases in our study:
Living Beyond Means
financial difficulties
Unusually Close Association

with Vendor or Customer
40%
24%
24%
APPROXIMATELY 30% OF OCCUPATIONAL FRAUDSTERS

IN THE ASIA-PACIFIC REGION HAD COMMITTED SOME
FORM OF NON-FRAUD WORKPLACE VIOLATION PRIOR
TO OR DURING THEIR FRAUDS.
The most common non-fraud violations were:
Bullying or Intimidation
15%
26
Excessive Absenteeism
7%
Excessive Tardiness
7%
Case Results
Case Results
Criminal Prosecutions and Civil Suits
Asia-Pacific region were referred to law enforcement,

which is notably lower than the rate in our global study
We asked respondents about the outcome of their fraud

cases, including whether the cases were referred to
law enforcement for criminal prosecution or pursued in
civil court. Figure 23 shows that 45.9% of cases in the
(59.3%). Victim organizations were even less likely to

seek relief through civil litigation, with only 26.2% of
cases resulting in a civil suit.
L E G A L A C T I O N TA K E N
Figure 23: Cases Resulting in Referral to Law Enforcement or Civil Suit
45.9%
Referral to
Law Enforcement
26.2%
Civil Suit
0%
54.1%
73.8%
Yes
No
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PERCENT OF CASES
27
Case Results
Recovery of Losses
Detecting and investigating fraud is crucial to mitigate current losses and to serve as a deterrent against future frauds.
However, our study suggests that organizations are not typically made whole through fraud recovery efforts, even when
the perpetrator is identified. In 58.1% of cases in the Asia-Pacific region, the victim organization recovered no losses
resulting from the fraud. Only 11% of organizations obtained a full recovery.
PERCENT OF LOSS RECOVERED
Figure 24: Recovery of Victim Organizations Losses
No Recovery
58.1%
125%
17.4%
2650%
8.4%
5175%
2.6%
7699%
2.6%
100%
0%
11.0%
10%
20%
30%
40%
PERCENT OF CASES
28
50%
60%
70%
Case Results
Action Taken Against Perpetrator
Recovering assets is not the only goal of a fraud examination. It is also important to identify perpetrators at the organization
and take appropriate disciplinary action against them. As shown in Figure 25, approximately 64% of organizations in the
Asia-Pacific region terminated the perpetrator, and 10.3% of perpetrators were either suspended or placed on probation.
A C T I O N TA K E N A G A I N S T P E R P E T R ATO R
Figure 25: Action Taken Against Perpetrator
Termination
63.5%
Probation or Suspension
10.3%
No Punishment
9.4%
Perpetrator Was No Longer

With Organization
9.4%
Permitted or
Required Resignation
9.4%
Other
8.9%
Settlement Agreement
8.4%
0%
10%
20%
30%
40%
50%
60%
70%
PERCENT OF CASES
29
Methodology
This report is based on the results of the 2015 Global

Fraud Survey, an online survey opened to 41,788 Certified
Fraud Examiners (CFEs) from July 2015 to October 2015.
As part of the survey, respondents were asked to provide
a detailed narrative of the single largest fraud case they
had investigated since January 2014. Additionally, after
completing the survey the first time, respondents were
given the option to submit information about a second
case that they investigated. Cases submitted were
required to meet the following four criteria:
1. The case must have involved occupational fraud
(defined as internal fraud, or fraud committed by a
person against the organization for which he or she
works).
2. The investigation must have occurred between January
2014 and the time of survey participation.
3. The investigation must have been complete at the
time of survey participation.
4. The respondent must have been reasonably sure the
perpetrator(s) was (were) identified.
Respondents were then presented with questions regarding
the particular details of the fraud case, including information
about the perpetrator, the victim organization, and the
methods of fraud employed, as well as fraud trends in
general. We received 7,497 total responses to the survey,
2,410 of which were usable for purposes of our global study.
Of these usable responses, 221 involved occupational fraud
cases perpetrated against organizations in the Asia-Pacific
region; the data contained in this report is based solely on
the information provided in these 221 responses.
30
Analysis Methodology
In calculating the percentages discussed throughout
this report, we used the total number of complete and
relevant responses for the question(s) being analyzed.
Specifically, we excluded any blank responses or instances
where the participant indicated that he or she did not
know the answer to a question. Consequently, the total
number of cases included in each analysis varies. In addition,
several survey questions allowed participants to select more
than one answer. Therefore, the sum of percentages
in certain figures throughout the report exceeds 100%.
Additionally, all charts throughout the report include only
those categories for which we received at least one
response from survey participants.
All loss amounts discussed throughout the report are
calculated using median loss rather than mean, or average,
loss. Additionally, we excluded median loss calculations for
categories for which there were fewer than ten responses.
Because the direct losses caused by financial statement
frauds are typically spread among numerous stakeholders,
obtaining an accurate estimate for this amount is extremely
difficult. Consequently, for schemes involving financial
statement fraud, we asked survey participants to provide
the gross amount of the financial statement misstatement
(over- or under-statement) involved in the scheme. All
losses reported for financial statement frauds throughout
this report are based on those reported amounts.
About the ACFE
About the ACFE
Founded in 1988 by Dr. Joseph T. Wells, CFE, CPA, the

ACFE is the worlds largest anti-fraud organization and
premier provider of anti-fraud training and education.
Together with nearly 80,000 members in more than 160
countries, the ACFE is reducing business fraud worldwide
and providing the training and resources needed to fight
fraud more effectively.
The ACFE provides educational tools and practical solutions
for anti-fraud professionals through initiatives including:
Global conferences and seminars led by anti-fraud
experts
Instructor-led, interactive professional training
Comprehensive resources for fighting fraud,
including books, self-study courses and articles
Leading anti-fraud publications, including Fraud
Magazine, The Fraud Examiner and FraudInfo
Local networking and support through more than
170 ACFE chapters worldwide
Anti-fraud curriculum and educational tools for
colleges and universities
The positive effects of anti-fraud training are far-reaching.
The best way to combat fraud is to educate anyone engaged
in fighting fraud on how to effectively prevent, detect and
investigate it. By educating, uniting and supporting the
global anti-fraud community with the tools to fight fraud
more effectively, the ACFE is inspiring public confidence in
the integrity and objectivity of the profession.
Membership
Immediate access to world-class anti-fraud knowledge and
tools is a necessity in the fight against fraud. Members
of the ACFE include accountants, internal auditors, fraud
investigators, law enforcement officers, lawyers, business
leaders, risk/compliance professionals and educators, all of
whom have access to expert training, educational tools and
resources. Members from all over the world have come
to depend on the ACFE for solutions to the challenges they
face in their professions. Whether their career is focused
exclusively on preventing and detecting fraudulent activities
or they just want to learn more about fraud, anti-fraud
professionals turn to the ACFE for the essential tools and
resources necessary to accomplish their objectives. To
learn more, visit ACFE.com or call (800) 245-3321 /
+1 (512) 478-9000.
Certified Fraud Examiners

The ACFE offers its members the opportunity for professional certification. The Certified Fraud Examiner (CFE)
credential is preferred by businesses and government
entities around the world and indicates expertise in fraud
prevention and detection.
Certified Fraud Examiners (CFEs) are anti-fraud experts
who have demonstrated knowledge in four critical areas:
financial transactions and fraud schemes, law, investigation,
and fraud prevention and deterrence. In support of CFEs
and the CFE credential, the ACFE:
Provides bona fide qualifications for CFEs through
administration of the CFE Exam
Requires CFEs to adhere to a strict code of professional conduct and ethics
Serves as the global representative for CFEs to business, government and academic institutions
Provides leadership to inspire public confidence in
the integrity, objectivity and professionalism of CFEs
CE RTI F I E D F RAU D E X AM I N E R
31
GLOBAL HEADQUARTERS THE GREGOR BUILDING

716 West Ave Austin, TX 78701-2727 USA
Phone: (800) 245-3321 / +1 (512) 478-9000
Web: ACFE.com info@ACFE.com
2016 Association of Certified Fraud Examiners, Inc.

ACFE, the ACFE Seal, and the ACFE Logo are trademarks owned by the Association of Certified Fraud Examiners, Inc. (ACFE) and
registered in China, Singapore, and Japan. These marks, along with Association of Certified Fraud Examiners, CFE, Certified Fraud
Examiner, Report to the Nations and other related trademarks, names and logos are the property of the Association of Certified Fraud
Examiners, Inc., and are registered and/or used in the U.S. and countries around the world.

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REPORT TO THE NATIONS

Detection of Fraud Schemes................................................................................... 8

About the ACFE...................................................................................................... 31

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Figure 1: Breakdown of Cases by Country

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Frequency and Median Loss of

involved the misappropriation of organizational assets;

primary categories: asset misappropriation, corruption, and

In contrast, financial statement frauds were the costliest

financial statement fraud. Of these, asset misappropriation

type of occupational fraud by far, with a median loss of

schemes were by far the most common form of occupational

USD 2,000,000, but were the least common, occurring in

frauds among the cases in the Asia-Pacific region, which is

fewer than 11% of cases. Corruption schemes fell in the

consistent with both our previous findings and our global

middle in both measures, at 48.4% of cases and with a

data for 2016. More than 80% of the Asia-Pacific cases

median loss of USD 285,000.

median loss for All

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

How Occupational Fraud Is Committed

Figure 2: Occupational Frauds by CategoryFrequency

Figure 3: Occupational Frauds by CategoryMedian Loss

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

How Occupational Fraud Is Committed

Figure 4: Frequency of Fraud Schemes

Financial Statement Fraud

Concealment of Fraud Schemes

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Detection of Fraud Schemes

Initial Detection of Occupational Frauds

almost three times more common than the next detection

Figure 5: Initial Detection of Occupational Frauds

Notified by Law Enforcement

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Detection of Fraud Schemes

FORMAL REPORTING MECHANISM USED

Figure 6: Formal Reporting Mechanism Used by Whistleblower

Top Three Sources of Tips

45+55+O 28+72O 12+88O

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Detection of Fraud Schemes

Figure 7: Party to Whom Whistleblower Initially Reported

Fraud Investigation Team

Board or Audit Committee

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Detection of Fraud Schemes

Figure 8: Impact of Hotlines on the Top Six Detection Methods

Notified by Law Enforcement

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

As part of our survey, we asked respondents to provide

Figure 9: Type of Victim OrganizationFrequency and Median Loss

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Figure 10: Size of Victim OrganizationFrequency and Median Loss

REPORT TO THE NATIONS: ASIA-PACIFIC EDITION

Figure 11: Industry of Victim Organization

Banking and Financial Services

Government and Public Administration

Agriculture, Forestry, Fishing, and Hunting

Oil and Gas

Transportation and Warehousing