By Paul K. Graser, CFE
Sr. Investigative Specialist
Edward Jones
St. Louis, Missouri

Although fraud does not discriminate, it has a heavier impact on smaller businesses (companies with fewer than 100 employees). Larger businesses have the luxury of implementing more complex procedures and audit controls. They may even set up a fraud hotline for employees to report any internal issues.  

An Association of Certified Fraud Examiners (ACFE) study in 2018 concluded that 30 percent of fraud cases occurred in small businesses, and 60 percent of those did not recover their losses. Those losses were in addition to the regular things that can affect productivity and profits, such as employee morale, brand image, reputation and unforeseen issues like global pandemics. Fraud in small businesses can have a more damaging effect because of smaller scales and profit margins.  

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