Page 262 - ACFE Fraud Reports 2009_2020

Detection of Fraud schemes

Impact of Hotlines

Tip 33.8% 47.1% Organizations With Hotlines
Internal Audit 16.5%
11.2% Organizations Without Hotlines
Management Review 15.7%
15.7%
Account Reconcilliation 4.7% 7.8%
Detection Method Surveillance/Monitoring 6.5% 11.9%
4.6%
By Accident
3.7%
Document Examination
3.0%
2.2%
External Audit 1.4%
7.3%
IT Controls 1.4%
0.4%
Notified by Police 1.0%
2.3%
Confession 0.9%
1.1%
0% 10% 20% 30% 40% 50%
Percent of Cases

Detection Methods Based on organization type

The chart on page 19 shows how frauds were detected based on the victim’s organization type. We see that privately
owned companies tended to have the fewest frauds detected by tip and the most frauds caught by accident, both of
which were also true in our 2008 study. Publicly held companies tended to detect more frauds by management review
and internal audit than their counterparts. Government agencies had the highest rate of detection by tips and had a pro-
portionately high rate of frauds caught through external audit.

Detecting Fraud in small Businesses
Small businesses historically tend to suffer disproportionately high occupational fraud losses, according to our previ-
ous reports. The trend was not as pronounced in this study as in past years, but we still saw that 31% of all occupa-
tional frauds were committed against small businesses (the highest rate of any category) and the median loss in those
schemes was $155,000 (see page 29). One reason that small businesses are particularly good targets for occupational
fraud is that they tend to have far fewer anti-fraud controls than larger organizations (see page 39).

18 | 2010 RepoRt to the NAtioNs ON OccuPATIONAl FRAUD ANd AbuSE