acfe fraud prevention check-up - BKD

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ACFE Insights - ACFE Insightshttp://www.acfeinsights.com/acfe-insights/2012/8/10/the-most-effective-controls-in-limiting-fr...Page 2 of 35/15/2013The key information in thistable is contained in the yellow shaded columns at the right, where we have combined the resultsfrom all three editions of the Report. This data comprises more than 4,100 total cases of occupationalfraud. The two bold columns show the average loss reduction and overall ranking of each control forthe three combined studies. We see here that hotlines have ranked No.1 among all anti-fraudmeasures in this analysis, typically being associated with a 54.5 percent reduction in fraud losses.Hotlines were followed by employee support programs, surprise audits, fraud training for managersand executives, job rotation/mandatory vacation, and fraud training for employees. Every one ofthose six anti-fraud controls was associated with at least a 45 percent reduction in fraud losses, andall six controls ranked in the top 8, respectively, in each edition of the Report.In the two far-right columns of the table above, we have presented the average rate ofimplementation for each control. In other words, this shows what percentage of victim organizationswere utilizing each control at the time the frauds occurred. We can clearly see that the six mosteffective anti-fraud measures all scored poorly in terms of implementation. With one exception,these controls all ranked 9 th or lower in terms of implantation rate, and only two of them were usedby more than half of the organizations in our studies.What this data seems to indicate is that the anti-fraud measures which tend to have the greatestimpact on fraud losses are being under-utilized. Every control in the table above is important andthey all have an impact not only in limiting fraud losses but also in preventing them. But the sixhighest ranking anti-fraud controls, according to our study, are utilized by an unacceptably lownumber of companies and agencies.Every organization is, at some point, vulnerable to occupational fraud. Ideally we would prevent allsuch frauds from ever occurring, but sooner or later a fraud will occur, and when it does, the bestthing we can do is catch it as quickly as possible and limit the financial impact of the crime. Wehope organizations that are serious about reducing their exposure to occupational fraud will considerthis data and in future studies we will see the implementation rates for hotlines, support programs,surprise audits, fraud training and job rotation increase substantially.[1] “Formal Fraud Risk Assessments” was not a category prior to the 2012 Report.Article originally appeared on ACFE Insights (http://www.acfeinsights.com/).
ACFE Insights - ACFE Insightshttp://www.acfeinsights.com/acfe-insights/2012/8/10/the-most-effective-controls-in-limiting-fr...Page 3 of 35/15/2013See website for complete article licensing information.
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ACFE FRAUD PREVENTIONCHECK-UP
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ACFE FRAUD PREVENTIONCHECK-UPThe Be
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ACFE FRAUD PREVENTIONCHECK-UPACFE F
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Sponsored by:The Institute of Inter
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Team Members:Toby J.F. Bishop, CPA,
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Managing the Business Risk of Fraud
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establish their own fraud risk mana
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Fraud risk identification may inclu
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Thus, to properly address fraud ris
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The board also has the responsibili
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• Implementing adequate internal
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Fraud Risk Management Program Compo
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ecently been hired in the purchasin
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Organizations can identify and asse
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The Risk Assessment TeamA good risk
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This also involves understanding th
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- Invoices for goods not received o
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Other RisksRegulatory and Legal Mis
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SECTION 3: FRAUD PREVENTIONPrincipl
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An organization’s HR group is oft
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SECTION 4: FRAUD DETECTIONPrinciple
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Process ControlsProcess controls sp
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keep such information confidential.
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will vary depending on the nature,
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Conducting the InvestigationPlannin
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• Extended investigation — Cond
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Fraud ControlsDeloitte Forensic Cen
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APPENDIX B: SAMPLE FRAMEWORK FOR A
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APPENDIX C: SAMPLE FRAUD POLICY 41N
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CONFIDENTIALITYThe ______________ U
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Sample Fraud Policy Decision Matrix
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Identified Fraud Risksand Schemes (
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2) Misappropriation of:a) Tangible
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) Embezzlement(1) False accounting
Page 75 and 76: Fraud Prevention Area, Factor, or C
Page 83 and 84: O-Organization / PersonnelO1-Leader
Page 85 and 86: O4.3 Enhance Operational Skills & C
Page 87 and 88: PR-Prevent, Protect & PreparePR1-Ge
Page 89 and 90: E-Periodic EvaluationE1-Evaluation
Page 91 and 92: I2-CommunicationI2.1 Develop Commun
Page 93 and 94: CriminologyFraud Prevention Program
Page 117 and 118: Sample Fraud PolicyAssociation of C
Page 119 and 120: Sample Fraud PolicyCONFIDENTIALITYT
Page 121 and 122: Sample Fraud PolicyFraud Policy Dec
Page 123 and 124: Fraud’s Worst Enemyhttp://www.fra
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