Median Loss
Definition
The loss figure at the midpoint of the distribution of cases, used in the ACFE's data because it is more representative of typical cases than the mean, which is skewed by a small number of extremely large frauds.
- Source
- ACFE Report to the Nations data
- Purpose
- Represents the typical occupational fraud case
- Advantage over mean
- Not skewed by rare extremely large frauds
Common questions
Why does the ACFE report median loss alongside total loss figures?+
A handful of very large embezzlement or financial-statement fraud cases can dominate the total and mean loss figures, so the ACFE reports median loss to give a sense of what a typical, more common occupational fraud case actually costs an organisation.
How does median loss vary by fraud scheme type in ACFE data?+
Financial statement fraud schemes consistently show a much higher median loss than asset misappropriation schemes such as skimming or expense reimbursement fraud, reflecting the larger scale of figures involved in accounting manipulation.
Related terms
- Asset Misappropriation
- The largest Fraud Tree branch, covering schemes in which an employee steals or misuses the organisation's assets. Subcategories include cash schemes (skimming,...
- Corruption
- Schemes in which an employee misuses their position to gain a direct or indirect benefit, typically involving a third party. The four...
- Financial-Statement Fraud
- Intentional misstatement or omission in financial reports to deceive users of those reports, typically to inflate earnings, understate liabilities, or maintain a...
- Occupational Fraud Tree
- The ACFE's hierarchical classification of occupational fraud schemes, with three top-level branches (asset misappropriation, corruption, financial-statement fraud) subdividing into dozens of named...
- Skimming
- An off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder...