Page 199 - ACFE Fraud Reports 2009_2020

Tips noting that over 30% of tips came from external
sources. While training and educating employees
of the 417 cases in our study in which a tip or about reporting fraud is clearly an important step,
complaint was instrumental in the detection of the organizations should also involve these third par-
fraud, 31% were received via a hotline or other for- ties in their fraud detection programs by making
mal reporting mechanism. This is a relatively high them aware of the organization’s reporting mecha-
number considering that less than half of the victim nism and encouraging them to report improper
organizations in our survey had a formal reporting conduct.
mechanism. The fact that tips continue to be the
most effective means of detecting fraud suggests Percent of Tips by Source 9
that organizations could improve their detection
efforts by establishing formal structures to receive 70%
reports about possible fraudulent conduct.
60% 57.7%

by far, the greatest percentage of tips came from 50%
employees of the victim organization, which is con- 40%
sistent with our findings in 2006. The fact that over Percent of Tip
half of all fraud detection tips came from employ- 30%
ees suggests that organizations should focus on em- 20% 17.6%
ployee education as a key component of their fraud 12.3% 9.2% 8.9%
detection strategies. employees should be trained 10%
1.0%
to understand what constitutes fraud and how it 0%
harms the organization. They should be encour- Employee Customer Vendor
/ Owner
aged to report illegal or suspicious behavior, and Shareholder Anonymous Competitor
they should be reassured that reports may be made
confidentially and that the organization prohibits Source of Tip
retaliation against whistleblowers. it is also worth 9 The sum of percentages in this chart exceeds 100 percent because in some cases
respondents identified more than one source of the initial tip.

23

2008 Report to the Nation on occupational Fraud and abuse