Page 148 - ACFE Fraud Reports 2009_2020

Limiting Fraud Losses

Internal Audits Median Loss Based on Whether
Internal audits also had a positive correlation with both Organization had Internal Audits
time to detection and median loss. Fifty-nine percent of
victim organizations we reviewed had an internal audit or
fraud examination department at the time of the fraud. No $218,000
Those organizations had median losses of $120,000, as
opposed to $218,000 for organizations without an inter- Internal Audits
nal audit function. Similarly, organizations with internal $120,000
audit departments detected their frauds in 18 months, as Yes
opposed to 24 months for those without internal audit
departments. $0 $50,000 $100,000 $150,000 $200,000 $250,000
Median Loss
External Audits
The data from our study on the effectiveness of external
audits was counter-intuitive. Although external audits
were the most common anti-fraud control among the Median Number of Months to Detection Based on
organizations in our study, we found organizations that Whether Organization had Internal Audits
utilized external audits had higher fraud losses than those
that did not. No 24

Similarly, we found no connection between the use of ex- Internal Audits
ternal audits and the length of the scheme. Organizations
that had external audits saw fraud schemes with a median Yes 18
length of 23 months, while those with no external audits
experienced schemes with a median length of 18 months. 0 5 10 15 20 25

Months to Detection

ACFE Report to the Nation on Occupational Fraud & Abuse