Managing Fraud Risk: A Practical Guide for Directors and Managers

Answers to the Quiz

Fraud Awareness Quiz – Question 2

What is fraud and what percentage of annual turnover are losses from fraud estimated to cost a typical organisation each year? Give three actions or practices that you consider to be examples of fraud.

We saw at the start of this Chapter that the delegates on my courses generally have a very good awareness of the size of fraud loss relative to an organisation's turnover – it is somewhere in the range 2–5% of turnover. Consequently, the second part of this question is usually answered very well.

The first part of Question 2 (“What is fraud?”) looks simple enough and, having worked through this Chapter, hopefully everyone now has a good idea of what is meant by fraud. As a result no doubt all of us can probably think of a number of different examples of fraud in the workplace that we have come across at various times in our careers.

However, I have to say that the great majority of delegates that I work with on my courses really struggle with this part of the question. Now, it may be related to the fact that I always hand the Quiz out at the start of the day just after the introductions when everyone is settling in and are getting a “feel” for the other delegates in the room. Whatever the cause there is a general reticence in coming forward with answers to this question. I am well aware that the subject matter of the course – fraud and other related financial crime risks – can sometimes act as an inhibitor to general discussion. ...