Page 436 - ACFE Fraud Reports 2009_2020

Anti-Fraud Controls at Small Businesses
The limited financial and human resources at most small organizations make them uniquely susceptible to fraud;
they often lack the means to enact sophisticated anti-fraud controls, and they can be particularly devastated by
the fallout from any fraud that does occur. As noted in Figure 20 on page 25, the median loss per fraud scheme at
small businesses is $154,000 — an amount that represents a significant portion of many small businesses’ budgets.
In Figure 27, we compared the frequency of anti-fraud controls at entities with fewer than 100 employees to the
frequency of those controls at their larger counterparts. Across the board, the larger organizations had a substan-
tially greater implementation rate than did the small businesses. Although some of the controls analyzed require a
significant investment and likely are not feasible for many small businesses to implement, many of the controls —
such as a code of conduct, an anti-fraud policy, management review procedures and anti-fraud training programs
— can be enacted with relatively little cost and could greatly enhance small businesses’ ability to protect their
resources from fraud.

Figure 27: Frequency of Anti-Fraud Controls by Size of Victim Organization

External Audit of F/S 55.6% 91.5%
Code of Conduct 48.0%
88.2%
Internal Audit Department 29.9% 86.7%
Management Certification of F/S 41.3%
80.7%
External Audit of ICOFR 33.6%
77.6%
Independent Audit Committee 26.7%
75.8%
Management Review 33.6% 73.8%

Hotline 18.4% 24.7% 67.8%
ANTI-FRAUD CONTROL Fraud Training for Employees 21.8% 57.7% 62.4%
Employee Support Programs
Fraud Training for
Managers/Executives
58.0%
21.8%
Anti-Fraud Policy
Dedicated Fraud Department, 11.7% 18.5% 55.6%
Function or Team 48.3%
Proactive Data Monitoring/Analysis 15.8%
41.9%
Formal Fraud Risk Assessments 10.8%
41.6%
Surprise Audits 16.4% 39.6% <100
Job Rotation/Mandatory Vacation 9.6% 23.9% Employees

Rewards for Whistleblowers 4.6% 12.6% 100+
Employees
0% 20% 40% 60% 80% 100%
PERCENT OF CASES

32 REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE