Fraud statistics give the appearance of definitiveness but only indicate what is known, recorded and/or reported.
Reported Fraud Tells Only Part of the Story
The Canadian Anti-Fraud Centre (CAFC) reports that Canada experienced fraud losses exceeding $704 million in 2025. Total fraud losses reported to the CAFC since 2022 exceeded $2.4 billion. Additionally, federal agencies estimate that less than 5% to 10% of all frauds ever result in any type of report.
This difference is significant.
While reported fraud losses provide an excellent illustration of the scale of fraud, they are only representative of those instances where the victim(s), organization(s) and/or authority(ies) became aware of the alleged fraud.
Reported fraud losses fail to account for each instance of fraudulent activity that was never discovered, each unresolved concern that never resulted in a resolution and each organization that addressed allegations of fraud or misconduct internally instead of reporting them externally.
Furthermore, reported fraud losses typically do not provide an accurate representation of the breadth of potential damage to businesses caused by fraudulent actions.
For example, potential costs to businesses may include disruptions to operations, external legal fees, compromised business relationships, decreased employee confidence in the company, increased exposure to regulators and reputational damage. In certain situations, the actual monetary loss associated with fraud may represent only a fraction of the overall problems created.
Serious Misconduct Often Develops Gradually
Based on more than three decades of combined investigative experience, my colleagues and I have observed that serious wrongdoing is rarely presented as a singular, identifiable act of dishonesty. Serious misconduct tends to develop over time through various, seemingly disparate indicators.
These can include unusual transactions, unexplained relationships among employees, repeated overrides of system controls, conflicts of interest among employees or other stakeholders, changes to records, irregularities in purchasing activities or transactions, unexplained payments and behaviour that is inconsistent with existing policies and procedures.
While individually insignificant, when taken collectively, these types of events can demonstrate a pattern worthy of greater scrutiny.
Fraudulent and corrupt activity extends far beyond the theft or misappropriation of funds.
Corrupt and fraudulent activity can include influence, unauthorized access to confidential data or information, obstruction or concealment of wrongdoing, collaboration or collusion and abuse of position or title.
Corrupt or fraudulent activity may arise from employees or trusted insiders acting outside the parameters of approved authority. It may also result from inadequacies within internal processes that allow suspicious activity to occur without appropriate scrutiny.
When Questionable Conduct Becomes Normalized
In some companies, corrupt or fraudulent activities can evolve into accepted behaviours. Employees may refrain from questioning activity because it has occurred previously. Senior personnel may participate in inappropriate behaviour, and subordinates may avoid challenging that behaviour because doing so may disrupt long-established relationships.
Behaviour that would normally warrant immediate disciplinary action could potentially be viewed as “acceptable” within a company simply because it has evolved into an expected norm.
This is another reason why identifying suspected wrongdoing early in the life cycle of fraudulent activity can be challenging.
Early Warning Signs Can Be Easy to Overlook
Potential early warning signs of suspicious activity within a company may appear innocuous or even benign. Examples may include accounting discrepancies, missing approvals, operational failures or isolated policy violations.
Complaints regarding suspicious activity may be so vague that further inquiry appears unnecessary. Employees may notice an abnormal occurrence but lack sufficient knowledge or context to understand why the situation merits investigation.
Additionally, there are likely numerous complaints or observations involving suspicious activity that are never formally documented or brought forward to management.
Employee fears regarding retaliation, perceptions that management will disregard legitimate concerns or beliefs that someone else has already reported similar concerns are just a few reasons why complaints related to suspicious activity may never reach management’s desk.
Internal Responses Can Create Additional Risk
Companies may also seek to handle complaints related to possible fraudulent activity internally before assessing the full extent of the problem.
Such approaches can present additional risks, including the destruction or deletion of documents related to investigations, the influencing or coercion of witnesses and investigations that focus too narrowly on specific people, entities or activities.
However, an anomaly is not necessarily indicative of wrongdoing.
An anomaly should be evaluated objectively in relation to the available evidence and placed in context with the normal functioning of the company. Investigations are conducted to evaluate facts, not to confirm preconceived notions.
Reporting Mechanisms Help Reveal Patterns
Properly developed reporting mechanisms can assist companies in recognizing concerns earlier and provide a better understanding of interdepartmental, regional or business relationships that may be affected by potential wrongdoing.
Reporting mechanisms can also help investigators make connections between seemingly unrelated events.
For example, a questionable invoice may not mean anything by itself. Multiple questionable invoices referencing the same vendor, employee or approval process may convey a very different message.
By preserving documentation relating to reports or complaints received by your company and investigating them using a properly defined scope, you can assess whether a complaint represents an isolated event, a systemic weakness in internal controls or intentional wrongdoing.
What Organizations May Be Missing
Therefore, corporate leaders must ask themselves more than how much wrongdoing has already been identified or reported.
They should also ask:
What are our systems, processes and internal culture missing?
Measuring fraud risk depends on more than what is apparent. For many companies, some of the greatest vulnerabilities may arise from fraudulent activity that remains unknown, unidentified or unreported.
If your organization is facing suspected fraud, corporate misconduct, financial irregularities, regulatory concerns, or simply needs to verify critical information before making an important business decision, we are here to help.
Contact us today for a free, confidential consultation. We’ll discuss your concerns, explain how our investigative process works, and help you determine the most effective path forward.