This is a course on fraud. Shockingly, few senior finance people I talked to spend any time at all, even considering this topic, I'll admit it. I didn't think of it all that much either until I was engaged a few years ago to develop a fraud awareness course from one of the big public accounting firms. It wasn't until I sat down with the experts and read the statistics that struck me that this was something that every senior financial professional should have on their radar. We all have a predisposition to believe that fraud can happen in our house, that our co workers and employees are all honest people that can be trusted to do the right thing. Tell me I'm wrong.

And that's not the thought you're having at this very instant. I was presenting this topic recently. And one participant shared an experience that I thought was very enlightening. He told me that on a salespersons very first day, the sales manager taught the new salespeople how to have their attention. accounts. Now you tell me, how hard is it gonna be for that new recruit, who may have never even dreamed of committing a fraud in his life to not commit fraud, his supervisors training him on how to do it.

So the new recruit may not even recognize that he is committing a fraud. So pull your head out of the sand and pay attention to this topic. It matters and it's important for you and your entire staff to understand. To prepare you for this course, I have consulted the experts, professionals who see fraud day in and day out, including retired police officers and certified fraud examiners. I will your purchase statistics throughout this course because you've got to see it to believe it. For example, the experts estimate that 5% of revenues are lost to fraud each and every year, and that is to each and every organization in the world today.

Cumulatively, the cost of fraud is estimated at $3.7 trillion a year. That number is so big, he can't even wrap your mind around it. The experts publish a study every two years of the cases they were working on. So we're going to look at the most recent study in the later lessons of this course, you'll be astounded. But of all these cases, the average loss of the organization is $145,000. For each incident of fraud reported, perhaps in a multinational company, that doesn't mean much, but consider for a moment that fraud is disproportionately skewed to small organizations.

Also, keep in mind that one of your employees just doesn't walk in and steal $145,000 from you in one day. The average duration of a fraud is 18 bucks, which means that you're stealing from the organization in little unnoticeable chunks. This course is about occupational fraud. You can think of occupational fraud as an inside job that is your own trusted, hand picked, loved, adored, appreciated employees, but maybe No mistake, that occupational fraud is an intentional act of deception, which is often coupled with an attempted concealment by one or more employees. The more employees involved, the easier it is to bypass the system of internal controls to obtain an unjust advantage, which leaves it wide open to everything from stealing cash or inventory to getting special trips from a supplier to getting promotions to conferring benefits to your brother in law. It's all fraud.

But keep in mind that occupational fraud is not an accidental mistake. For instance, if an employee mistakenly miscalculates a covenant on a loan, or accidentally brings home the daily deposit intent is by definition, one of the key distinguishing elements which is hard to determine in certain cases. Secondly, in this course, we are intentionally only focusing in on the inside jobs. This isn't a course about how to keep the fees out of your warehouse. Or how to stop shoplifters or hackers or or anyone else along these lines. And that's a very important topic, but beyond the scope of what we're going to talk about in this hour, so let's be clear on what you're going to get from this course.

First, we'll raise your awareness of various types of fraud schemes. There are so many schemes out there that is impossible to tell you about each and every one of them. But we will talk about enough of them to hopefully solidify in your mind that you should be prepared for anything. Secondly, we'll look at the psychology of fraud, as well as looking at the profile of the fraudster. Third, we will look at the different anti fraud controls. But because we have statistical studies, we will back up the theory with actual data on which ad fraud controls you need to consider to protect your organization.

And finally, we will discuss detection, prevention and prosecution of fraud using best practices in the statistics. So I urge you to take the course become enlightened subject matter is not technically challenging. What is challenging is changing our perception of fraud and recognizing that our own predisposed notion that fraud will happen in our organization. So I hope to see you in the next lesson. That's all for now.