Page 362 - ACFE Fraud Reports 2009_2020

Anti-Fraud Controls at Small Businesses
Due to their limited resources, small businesses can be especially devastated by a loss of funds to fraud.
Unfortunately, however, resource restrictions in most small organizations often mean less investment in
anti-fraud controls, which makes those organizations more susceptible to fraud.

To help illustrate this problem, we broke down the frequency of anti-fraud controls between small companies
— those with fewer than 100 employees — and their larger counterparts. As shown in the chart below, there
is a dramatic disparity in the implementation of controls between these two groups. Admittedly, several of the
controls analyzed, such as a dedicated internal audit or fraud examination department, do require a significant
amount of resources that likely would not provide an appropriate cost/benefit balance for small companies.
However, other anti-fraud measures — such as a code of conduct, anti-fraud training programs and formal
management review of controls and processes — can be implemented at a marginal cost in many small
organizations and can greatly increase the ability to prevent and detect fraud.

Frequency of Anti-Fraud Controls by Size of Victim Organization

External Audit of F/S 55.7% 91.4% <100 Employees
Code of Conduct 50.1% 89.8%
Internal Audit/FE Department 31.6% 85.0% 100+ Employees
38.0%
External Audit of ICOFR 81.4%
Management Certification of F/S 42.7% 80.8%
Independent Audit Committee 27.2% 36.0% 72.0%
75.7%
Anti-Fraud Control Employee Support Programs 19.8% 27.5% 69.5%
Management Review
69.8%
Hotline
Fraud Training for Employees
20.4%
Fraud Training for Managers/Executives 18.5% 59.4%
59.0%
Anti-fraud Policy 20.4%
58.3%
| 2012 REPORT TO THE NATIONS on occupational FRAUD and abuse
Formal Fraud Risk Assessments 12.3%
46.5%
Surprise Audits 14.6% 40.2%
Job Rotation/Mandatory Vacation 8.1%
20.5%
4.0%
Rewards for Whistleblowers 11.1%
0% 20% 40% 60% 80% 100%
Percent of Cases

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