In this article, Michael Pakter, a Certified Fraud Examiner, shares several of the findings contained in the 2026 ACFE Report to the Nations; this report analyzes 2,402 occupational fraud cases investigated in 143 countries and territories and documents losses exceeding $3.4 billion. There are many constants and the author shares his views on why that remains so.
For three decades, the Association of Certified Fraud Examiners (ACFE) has published what has become a definitive benchmark study of occupational fraud. In 2026, the ACFE released the 14th edition of its landmark research publication, Occupational Fraud 2026: A Report to the Nations, representing 30 years of accumulated knowledge and nearly 25,000 analyzed fraud cases.[1]
I became a Certified Fraud Examiner (CFE) in 1994, two years before the inaugural Report to the Nations was issued. Recently, I was honored to receive my ACFE 25-year membership pin. During my professional career, I have read almost every edition of the report and virtually all 13 prior editions for purposes of my continuing education. The report has had a significant impact on the practice of fraud examination.
The 2026 edition analyzes 2,402 occupational fraud cases investigated in 143 countries and territories, and documents losses exceeding $3.4 billion.[2] While technology, business practices, and fraud schemes have evolved dramatically since 1996, many of the fundamental lessons remain remarkably constant.
30 Years of Research
According to ACFE Chief Executive Officer John Warren, JD, CFE, the first study was undertaken because ACFE Founder Dr. Joseph T. Wells recognized the need for rigorous research devoted to understanding occupational fraud and its impact on organizations.[3]
Thirty years and 14 editions later, the study has aggregated data from more than 24,000 cases and over $65 billion in fraud losses.[4] It is my understanding that it is one of the largest and most comprehensive studies of occupational fraud ever conducted.
One of the most striking findings from the report’s retrospective analysis is that corruption has become increasingly prevalent. In the first edition, corruption schemes represented only 10% of reported cases. By 2026, corruption appeared in 45% of cases.[5] Corruption is worsening globally, with even established democracies experiencing rising corruption amid a decline in leadership.[6]
Another trend is that fraudsters have moved up the organizational hierarchy. In 1996, employees accounted for 58% of perpetrators, while owners and executives represented only 12%. By 2026, employees accounted for 41% and owners and executives accounted for 16%; demonstrating the increasing importance of management-level misconduct.[7]
The 30th anniversary retrospective also shows that the burden of occupational fraud has shifted toward smaller organizations. In 1996, organizations with 10,000 or more employees reported the highest median loss of any size category at $126,000, with organizations of fewer than 100 employees close behind at $120,000. By 2026, the smallest organizations had become the costliest category at $126,000, while the largest reported $123,000.[8]
The Persistent 5% Estimate
Perhaps no statistic associated with the ACFE is more widely cited than the estimate that organizations lose approximately 5% of revenue annually to fraud.[9] Importantly, this estimate is not derived from the 2,402 cases included in the current study. Rather, it reflects the collective experience and judgment of CFEs worldwide. Projected against 2024 world gross product of approximately $111 trillion, the estimate implies global fraud losses exceeding $5.5 trillion annually.[10]
One of the most remarkable aspects of this estimate is its consistency. While individual fraud patterns, detection methods, and organizational environments have evolved over the last 14 editions, the estimated percentage of revenue lost to fraud has remained substantially unchanged. This suggests that occupational fraud is not an episodic problem but rather a persistent business risk affecting organizations of every size, industry, and geography.
What the Numbers Reveal
The median loss per case in the 2026 study was $104,000, while the average loss exceeded $1.4 million.[11] Twenty percent of cases involved losses exceeding $1 million.[12]
Asset misappropriation schemes remained the most common category of fraud, occurring in 90% of cases, although they produced the lowest median losses.[13] Corruption schemes appeared in 45% of cases and generated median losses of $150,000.[14] Financial statement fraud occurred in only 6% of cases, but these cases produced median losses of $1 million, making them the most costly category of occupational fraud.[15] More than one-third of cases involved multiple categories of occupational fraud.[16]
Internal Controls Matter
More than half of all frauds occurred because of either a lack of internal controls or management override of existing controls.[17] The report provides compelling evidence that anti-fraud controls are associated with lower losses and faster detection. Organizations employing management review experienced 55% lower losses and detected frauds 44% more quickly.[18] Proactive data monitoring and analysis were associated with 53% lower losses and 44% faster detection.[19] Fraud awareness training and surprise audits also demonstrated measurable benefits.[20]
These findings reinforce a lesson forensic accountants have preached for decades: controls matter, and tone at the top matters even more. One finding has remained constant over every edition of the study: tips continue to be the most common method of detecting occupational fraud and external audits continue to be one of the least common methods of detecting occupational fraud.[21]
Detection: Whistleblowers Still Reign Supreme
43% of frauds were detected through tips; nearly three times the next most common detection method.[22] More than half of those tips originated from employees, while customers and vendors together accounted for nearly one-third.[23] Interestingly, technology has altered reporting channels. E-mail and web-based reporting mechanisms now exceed traditional telephone hotlines.[24] These findings emphasize the importance of maintaining anonymous reporting mechanisms and fostering ethical cultures that encourage reporting.
Behavioral Red Flags
84% of perpetrators displayed at least one behavioral warning sign before detection.[25]
Among the most observed red flags include:
- Living beyond one’s means
- Financial difficulties
- Unusually close relationships with vendors or customers
- Excessive control issues
- Refusal to take vacations
- Irritability or defensiveness
- Human-resources-related problems[26]
Behavioral indicators are not proof of fraud. Nevertheless, they can provide important clues warranting further inquiry.
Tenure, Position, and Collusion Are a Bad Fraud Risk Combination
Median losses increase dramatically with authority and tenure. Frauds committed by owners and executives resulted in median losses of $475,000, compared with $50,000 for employees.[27] Individuals employed for more than 10 years caused median losses of $200,000, four times the losses caused by employees with less than one year of service.[28]
Collusion magnifies losses. Cases involving three or more perpetrators produced median losses approaching six times those involving a single perpetrator.[29] Age also matters. Older perpetrators continue to produce larger losses, with fraudsters over the age of 60 causing median losses of $850,000.[30]
Education and gender complete the picture. More than 60% of occupational fraudsters held a university degree or higher, and those perpetrators caused median losses of $150,000 compared with $89,000 for perpetrators without a degree, while men accounted for 71% of cases at a median loss of $125,000 and women for 28% at $90,000.[31]
Small Businesses Bear the Heaviest Losses
Small businesses necessitate particular attention from practitioners who serve closely held companies. Organizations with fewer than 100 employees suffered the highest median losses of any organization size, averaging $126,000 per case.[32] Potential reasons for this include that small businesses implement anti-fraud controls at markedly lower rates than larger organizations, and while 85% of larger organizations maintain an established whistleblowing mechanism, only about one-quarter of small businesses do.[33]
Obtaining the Report
One of the most commendable aspects of the ACFE’s work is that the Report to the Nations is made available free of charge. Readers do not need to be ACFE members to obtain a copy. The report, supporting infographics, charts, and presentation materials may be downloaded directly from the ACFE website. The report’s graphics and findings are specifically intended to be used by anti-fraud professionals, management teams, and educators in presentations, training sessions, newsletters, and fraud risk assessments.[34]
Conclusion
The Report to the Nations reminds us that no single characteristic identifies a fraudster. Fraudsters come from every demographic group and occupational level.
Nevertheless, if one were to assemble a hypothetical “perfect storm” profile using many of the risk factors identified in the study, it might involve a 65-year-old male owner or executive with postgraduate education who has worked for the organization for more than 10 years and possesses authority over accounting and purchasing functions. He (the fraudster is more likely to be a “he”) has a history of prior disciplinary problems and prior fraud-related misconduct, enjoys unusually close relationships with vendors, lives beyond his known sources of income, never takes vacations, gets defensive and antagonistic when questioned, and colludes with two or three other senior executives.
Real cases rarely match the composite in every particular. Russell R. Wasendorf, Sr., owner and chief executive officer of Peregrine Financial Group, was 64 years old when he was sentenced in 2013 for stealing more than $215 million from over 13,000 customers across roughly two decades. He held sole authority over the firm’s bank reconciliations, forged bank statements, and maintained a post office box to intercept correspondence from regulators.[35] He matched the prior hypothetical regarding age, position, tenure, and control of the accounting function, but departed from it in one telling respect: he acted alone. His scheme surfaced not through a tip but through a change in controls; when account confirmations moved to an electronic platform he could not forge.
None of these characteristics alone proves wrongdoing. However, collectively they represent a concentration of risk factors that should cause management, auditors, and investigators to exercise heightened professional skepticism.
One last thought, the reader should give some consideration to what future reports may say regarding artificial intelligence (AI). AI may affect occupational fraud in two competing ways. It can give fraudsters increasingly sophisticated tools to create false documents, communications, and transactions at scale, while also giving organizations more powerful means to analyze data, identify anomalies, and detect suspicious patterns. As AI becomes more widely embedded in business processes, the importance of strong internal controls, human oversight, and professional skepticism may become even greater.
Announcing the study, Warren framed the response in collective terms: “Prevention is so valuable in combatting any type of fraud, and within workplaces, fraud prevention must be a collaborative effort across employee levels.”[36] Thirty years after the first Report to the Nations, perhaps its most important lesson remains unchanged: occupational fraud is not rare and organizations cannot assume that “it cannot happen here.”
[1] Association of Certified Fraud Examiners, Occupational Fraud 2026: A Report to the Nations (Austin, TX: ACFE, 2026), p. 10.
[2] Ibid., pp. 4, 7.
[3] Ibid., p. 2.
[4] Ibid., p. 10.
[5] Ibid.
[6] Transparency International’s February 10, 2026, which CPI report says that conclusion is supported by its 2025 data: only five countries scored above 80 on the CPI, versus 12 a decade earlier; the global average fell to 42, and 122 of 182 countries scored below 50 (Transparency.org).
[7] Ibid.
[8] Association of Certified Fraud Examiners, “30 Years of the Report to the Nations,” infographic accompanying Occupational Fraud 2026: A Report to the Nations (Austin, TX: ACFE, 2026).
[9] Association of Certified Fraud Examiners, Occupational Fraud 2026: A Report to the Nations, p. 9.
[10] Ibid.
[11] Ibid., p. 4.
[12] Ibid., p. 9.
[13] Ibid., p. 12.
[14] Ibid.
[15] Ibid.
[16] Ibid., p. 14.
[17] Ibid., p. 5.
[18] Ibid.
[19] Ibid.
[20] Ibid., pp. 39, 42–43.
[21] Ibid.; see also p. 24.
[22] Ibid., p. 4.
[23] Ibid.
[24] Ibid.
[25] Ibid., p. 5.
[26] Ibid., pp. 68-71.
[27] Ibid., p. 5.
[28] Ibid., p. 54.
[29] Ibid.
[30] Ibid., p. 11.
[31] Association of Certified Fraud Examiners, “Profile of a Fraudster,” infographic accompanying Occupational Fraud 2026: A Report to the Nations (Austin, TX: ACFE, 2026).
[32] Association of Certified Fraud Examiners, Occupational Fraud 2026: A Report to the Nations, p. 5.
[33] Ibid., p. 44.
[34] Ibid., p. 6.
[35] U.S. Department of Justice, U.S. Attorney’s Office, Northern District of Iowa, “Peregrine Financial Group CEO Sentenced To 50 Years for Fraud, Embezzlement, and Lying to Regulators,” press release, January 31, 2013.
[36] Association of Certified Fraud Examiners, “Report: 84% of fraudsters show at least one behavioral red flag,” press release, May 12, 2026.
Michael D. Pakter, CPA, CFF, CGMA, CFE, CVA, MAFF, CA, CIRA, CDBV, has more than 45 years of experience in forensic accounting, investigations, and litigation services, including more than 25 years of experience in economic damages and business valuations. State, federal, and bankruptcy courts have recognized him as an expert in forensic accounting, economic damages, business valuation, alter ego, marital dissolution, and bankruptcy core proceedings.
Mr. Pakter can be contacted at (773) 671-1950 or by e-mail to mpakter@litcpa.com.
