Page 153 - ACFE Fraud Reports 2009_2020

Service (general) Anti-Fraud Measures in Small Businesses
Overall, there was a low rate of anti-fraud measures em- One of the reasons small businesses tend to suffer dispro-
ployed by the general service organizations in our survey. portionately large fraud losses may be because they tend
External audits were utilized by 63% of service organiza- not to have many established anti-fraud measures. A little
tions, but no other anti-fraud control was reported in even less than half of small businesses we examined had exter-
half of the cases from this industry. nal audits and no other anti-fraud measure was cited in
even 20% of small business cases. This may help explain
Service (general) — 60 Cases why more small business frauds are detected by accident
than by any other means.
Control Cases %
External Audit 38 63.3% Small Business
Internal Audit 24 40.0% (<100 Employees) — 381 Cases
Fraud Training 18 30.0%
Control Cases %
Surprise Audits 17 28.3%
External Audit 184 48.3%
Hotline 9 15.0%
Internal Audit 73 19.2%
Fraud Training 55 14.4%
Service (professional, scientific or technical) Surprise Audits 38 10.0%
Professional service organizations were even less likely
than general service organizations to have established anti- Hotline 31 8.1%
fraud measures. Less than 40% of these organizations had
external audits (the lowest rate for any industry) and each Anti-Fraud Measures in Not-for-Profit Organizations
of the other control mechanisms was cited in less than Tips were the most common means by which frauds were
one-third of our cases. detected in not-for-profit organizations, yet less than one-
third of the not-for-profits in our study had an established
Service (professional, scientific anonymous reporting mechanism. Fraud training and the
or technical) — 58 Cases use of surprise audits were also ignored by the majority of
not-for-profits.
Control Cases %
External Audit 23 39.7% Not-for-profit Organizations
Internal Audit 19 32.8% — 147 Cases
Fraud Training 17 29.3%
Control Cases %
Surprise Audits 15 25.9%
External Audit 104 70.7%
Hotline 12 20.7%
Internal Audit 67 45.6%
Fraud Training 50 34.0%
Surprise Audits 47 32.0%
Hotline 33 22.4%

ACFE Report to the Nation on Occupational Fraud & Abuse 1