Page 149 - ACFE Fraud Reports 2009_2020

Of course, there are other reasons why external audits can Median Loss Based on Whether
be valuable to organizations, and with the increased focus Organization had External Audits
on fraud in external audits that is mandated by SAS 99,
we would hope to see these numbers trend up in future
reports, but in our current study we did not find data to No $125,000
indicate that external audits were particularly effective at
detecting fraud. 12 External Audits

Surprise Audits Yes $181,000
Surprise audits are frequently cited as an effective method
for both fraud prevention and fraud detection. We found $0 $50,000 $100,000 $150,000 $200,000
that surprise audits were the least commonly utilized anti- Median Loss
fraud control among those we tested for.

Only 29.2% of the victim organizations regularly conducted Median Number of Months to Detection Based
surprise audits, yet those organizations had median losses on Whether Organization had External Audits
of $100,000, as opposed to a median loss of $200,000 for
organizations that did not conduct them. Organizations
that used surprise audits also had fraud schemes with a No 18
median length of 15 months; nine months less than in or-
ganizations where surprise audits were not conducted. External Audits Yes 23

0 5 10 15 20 25
Months to Detection

Median Loss Based on Whether Median Number of Months to Detection Based on
Organization had Surprise Audits Whether Organization Conducted Surprise Audits

Surprise Audits No $100,000 $200,000 Surprise Audits Yes 15 24
No

Yes

$0 $50,000 $100,000 $150,000 $200,000 0 5 10 15 20 25
Median Loss Months to Detection

12 As we stated on pg. 28 of this Report, external audits ranked fifth out of six detection methods and were credited with identifying only 12% of the
cases in our study.

ACFE Report to the Nation on Occupational Fraud & Abuse