Page 143 - ACFE Fraud Reports 2009_2020

Detecting Fraud in Small departments can be effective in detecting fraud when they
Businesses are utilized by small businesses. We also found that frauds
in small businesses were much more likely to be detected
Frauds in small businesses (those with fewer than 100 em- by accident, suggesting that these organizations do not do
ployees) were less likely to be detected by a tip than occu- a good job of proactively detecting fraud.
pational frauds in general. They were also less likely to be
detected by internal audit or internal controls, which may Detecting Fraud in Not-for-Profit
be because many small organizations often lack strong Organizations
internal control structures or any type of internal audit
department. For example, only 73 of the 381 small busi- The data for detection of fraud in not-for-profit organiza-
nesses in our study had internal audit departments, yet in tions was largely consistent with the data resulting from
34 cases, small business frauds were detected by internal all cases. Tips were again the most common detection
audit. This translates to an adjusted rate of detection by method, followed by accidents.
internal audit of 46.6%, which suggests that internal audit

Detecting Fraud in Not-for-Profit Organizations

34.4% Not-for-Profit
Tip 34.2%
All Cases
By 28.7%
Accident 16.4% 25.4%
Detection Method Controls 14.8% 19.2%
Internal
Audit
20.2%
Internal
19.7%
External
Audit
Notified by 4.9% 12.0%
Police 3.8%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Percent of Cases

ACFE Report to the Nation on Occupational Fraud & Abuse 1