Pub. 4 2015 Issue 1

The CommunityBanker 14 I nternal controls are not needed to only appease auditors and regulators. Effective operational controls prevent and mitigate occupational fraud risk. Occupational fraud can be defined as “the use of one’s occupation for personal enrichment through the deliberate misuse or misapplica- tion of the employing organization’s resources or assets.” The Association of Certified Fraud Examiners (ACFE) estimates that five percent of U.S. organizations’ annual revenues are lost due to fraud. Categories of Fraud All instances of occupational fraud can be classified into one of three major categories: • Asset Misappropriations – any scheme that involves the theft or misuse of an organization’s assets • Corruption – any scheme in which a person uses his or her influence in a business transaction to obtain an unauthor - ized benefit contrary to that person’s duty to his or her employer Take Control: Don’t Become Involved In Occupational Fraud By DoriAnn F. Hoffman