Page 144 - ACFE Fraud Reports 2009_2020

Detecting Occupational Fraud

Detecting Fraud in Government Detecting Fraud in Publicly Traded
Agencies Companies

Generally speaking, government agencies were much less Publicly traded companies had a higher rate of detection
likely to rely on accidental detection of fraud, whereas through tips, internal audits and internal controls than was
their rates of detection through tips, external audits and found overall. This may be due to the impact of Sarbanes-
notification by law enforcement each exceeded the rates for Oxley, which mandates that publicly traded companies
all cases. establish anonymous reporting mechanisms and places a
strong emphasis on enhanced internal controls to detect
Detecting Fraud in Privately Held fraud. However, the data in this respect are inconclusive,
Companies as the rates of cases detected by tips and through internal
controls in public companies are both lower in the present
Privately held companies had the lowest rate of detection study than they were in our 2004 Report.
through tips of any organization type in our study. Less than
25% of cases in private companies were detected through
tips, whereas nearly 35% were detected by accident. Rates of
detection by internal audit and internal controls also lagged
behind the overall rate, whereas private companies were
more likely to detect frauds through external audits.

Detection of Frauds in Government Agencies

39.7% Government
Tip 34.2%
By 16.0% All Cases
Accident 20.5% 25.4%
Detection Method Controls 15.4% 19.2%
Internal
Audit
20.2%
19.9%
Internal
External
Audit
Notified by 7.1% 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