Developing the entire fraud picture

CFEs should consider all aspects of a fraud case when calculating the impact of fraud.

Here are three primary calculations when reporting the amount of fraud impact: 

Most organizations that have an internal fraud risk management program find themselves playing the loss game. They measure key performance indicators based on how much or little they lose to fraud. However, as they move up the maturity curve, sophisticated organizations understand fraud is about more than loss. To illustrate, ask yourself: Can there be a fraud committed without the presence of a loss? What about a mortgage fraud where counterfeit documents are submitted to the lender inflating their assets? What if the borrower makes all their payments on time for the life of the loan? There is no monetary loss, but the borrower received a loan they would not otherwise be entitled to based upon fraudulent documents.

Here, the primary fraud scheme (the main scheme) is classified as an industry-specific scheme:  Financial institution fraud > lending fraud > loan disbursements > loan origination > overstated assets.

The secondary fraud scheme (a supporting scheme perpetrated so the primary fraud scheme can be more successful) is classified as a core fraud scheme (those all organizations experience risk from, regardless of industry): Fraudulent statements > non-financial > internal documents.