Page 291 - ACFE Fraud Reports 2009_2020

Modification of Controls Victim Organizations That Modified
In response to the discovery of the fraud, more than 80% of controls After discovery of Fraud
the victim organizations in our study implemented or modi-
fied internal controls. While this percentage is quite high, it Did Not
Modify Controls
indicates that nearly one out of five victims retained the same 19.4%
control system — or lack thereof — that was ineffective in
preventing the reported fraud schemes. Of those organiza-
tions that did implement or modify their internal controls in Did Modify Controls
response to the fraud, more than 60% increased segregation 80.6%
of duties, more than half added formal review of internal con-
trols by management and 23% implemented surprise audits.

Internal controls Modified or Implemented in Response to Fraud 19

Increased Segregation of Duties 61.2%
Management Review 50.6%
Surprise Audits 14.8% 22.5%
Control Implemented/Modified 20 Job Rotation/Mandatory Vacation 7.9% 13.5%
Fraud Training for Employees
16.4%
Fraud Training for Managers/Executives

Internal Audit/FE Department
12.3%
Anti-Fraud Policy
11.7%
Code of Conduct
8.7%
External Audit of F/S
8.7%
Hotline
External Audit of ICOFR
Indpendent Audit Committee
6.0%
Management Certification of F/S
Rewards for Whistleblowers 7.8% 5.9%
4.0%
Employee Support Programs 1.8%
0% 10% 20% 30% 40% 50% 60% 70% 80%

Percent of Cases

19 The sum of percentages in this chart exceeds 100% because many victim organizations modified more than one anti-fraud control in response to the fraud.
20 KeY:
• External Audit of F/S = Independent external audits of the organization’s financial statements
• Internal Audit / FE Department = Internal audit department or fraud examination department
• External Audit of ICOFR = Independent audits of the organization’s internal controls over financial reporting
• Management Certification of F/S = Management certification of the organization’s financial statements

2010 RepoRt to the NAtioNs ON OccuPATIONAl FRAUD ANd AbuSE | 47