Page 345 - ACFE Fraud Reports 2009_2020

Impact of Hotlines

Tip 50.9% Organizations
34.6%
With Hotlines
Internal Audit 16.3%
12.8% Organizations
Management Review 13.8% Without Hotlines
16.5%
4.5%
Account Reconciliation 3.0%
4.8%
Detection Method Surveillance/Monitoring 1.5% 11.3%
Document Examination
5.8%
2.8%
By Accident
2.4%
1.7%
Notified by Police
3.7%
Confession 1.3%
1.8%
1.3%
IT Controls 0.5%
External Audit 1.0% 5.7%
Other 1.0%
1.0%
0% 10% 20% 30% 40% 50% 60%
Percent of Cases

Initial Detection of Frauds in Small Businesses
Compared to large organizations, small businesses (those with fewer than 100 employees) differ widely in orga-
nizational structure and availability of resources. Our data suggest that small organizations tend to have far fewer
anti-fraud controls in place than larger organizations (see page 34). Furthermore, small organizations in our study
were victimized by fraud more frequently than larger organizations and they suffered a disproportionately large
median loss of $147,000 (see pages 26-27).

The difference in levels of control could explain some of the discrepancies between detection methods observed
in small and large organizations, as illustrated in the chart on the following page. Note that smaller companies
are substantially less likely to detect fraud based on tips or internal audits, while they are more likely to uncover
fraud by accident, external audit or police notification. 2012 REPORT TO THE NATIONS on occupational FRAUD and abuse |

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