Page 592 - ACFE Fraud Reports 2009_2020

DETECTION

How are fraud schemes

initially detected?

Understanding the methods by
which occupational frauds are

detected is critical for both investi-
gating schemes and implementing
effective prevention strategies. We
asked survey participants to tell us
how the frauds they investigated

were initially detected, which helps
us understand how organizations
are most likely to discover frauds

in the future. This data also shows
how organizations can take steps
to detect fraud proactively, rather
than passively.

Initial Detection of
Occupational Frauds

Figure 9 shows that the leading detection
methods are tips, internal audit, and man-
agement review. This finding is not surpris-
ing, as these have been the three most com-
mon means of detecting occupational fraud
in every edition of the report since 2010.
Collectively, these three detection methods
were cited in 68% of the cases in our current
study. Tips were by far the most common
means of detection at 40% of cases—more
than internal audit (15%) and management
review (13%) combined.

16 Detection Report to the Nations