Page 504 - ACFE Fraud Reports 2009_2020

Detection of Fraud Schemes

Most fraudsters do not undertake their schemes ex- anti-fraud professionals to enhance fraud detection at
pecting they will get caught. When people choose to their own or their clients’ organizations. For instance, by
engage in occupational fraud, they typically know that comparing the magnitude and duration of fraud schemes
they are risking their careers, reputations, and freedom to the detection method, we determined that some
by engaging in such misconduct. Therefore, increasing detection methods tend to be associated with less costly
the likelihood that a scheme will be detected is a pillar of frauds. Additionally, we found evidence that organiza-
fraud prevention. tions can benefit from being proactive in detecting fraud.

In addition to identifying patterns in how fraud is commit- Initial Detection of Occupational Frauds
ted, we analyzed how occupational fraud schemes were
initially detected. The overall frequency with which each de- Figure 21 shows the overall frequency of how schemes
tection method uncovered a fraud was generally consistent were initially detected, including a comparison from our
with previous reports, though we found that the frequency 2014 and 2012 reports. As in previous years, tips were
tended to vary based on an organization’s size and location. the most common detection method by a wide margin,
accounting for 39.1% of cases. In the 2016 data, internal
Also, by examining the relationship between detec- audit (16.5%) edged out management review (13.4%) as
tion methods and other factors, we identified ways for the second-most common detection method.

20 REPORT TO THE NATIONS ON OCCUPATIONAL FRAUD AND ABUSE