Public Companies Lose 2.5% of Revenue to Fraud, Survey Finds

A new survey by the Association of Certified Fraud Examiners and the Anti-Fraud Collaboration estimates that public companies lost an average of 1.06% of their revenue to known fraud in 2024, replicating the previous year's average. However, unknown fraud may be multiple times more expensive, with an estimated real cost of 2.5% of revenue. Participants expect an increase in overall fraud levels over the next two years and recommended more proactive and continuous monitoring to deter and detect fraud.

A new survey by the Association of Certified Fraud Examiners (ACFE) and the Anti-Fraud Collaboration (AFC) estimates that U.S. public companies lost an average of 1.06% of their revenue to known fraud in 2024, mirroring the previous year's average. However, the report suggests that the real cost of fraud—both detected and undetected—may be significantly higher, with an estimated real cost of 2.5% of revenue [3]. The survey involved 369 participants, including employees, governance officials, consultants, and external auditors.

The report highlights that half of internal frauds last more than 12 months before being detected, indicating that some frauds from 2023 and 2024 may not yet be included in the known fraud losses for those years. Cyberfraud was identified as the most significant and likely type of fraud, followed by fraud by vendors and sellers, and customer payment fraud. Financial statement fraud was the least likely but had the second-worst consequences.

Participants in the survey were pessimistic about the future, with two-thirds expecting an increase in overall fraud levels over the next two years. The top recommendation to better deter and detect fraud was more proactive and continuous monitoring, followed by new or improved use of technology or AI, and enhanced efforts related to fraud awareness training and an anti-fraud culture.

The survey findings underscore the persistent threat of fraud and the need for robust internal controls and monitoring mechanisms to mitigate its impact on public companies.

References:
[1] https://www.infosecurity-magazine.com/news/ai-fuels-record-number-of-fraud/
[2] https://www.morningstar.com/news/pr-newswire/20250807la46375/lmt-investors-have-opportunity-to-join-lockheed-martin-corporation-securities-fraud-lawsuit-with-the-djs-law-group
[3] https://www.cfo.com/news/fraud-costs-public-companies-revenue-acfe-cfo-cybersecurity-finance-deepfake-crime-/756864/