Managing Fraud Risk: A Practical Guide for Directors and Managers

Specific Anti-Fraud Prevention Controls

Introduction

One of the main conclusions in the ACFE's 2008 RTTN is: “The implementation of anti-fraud controls appears to have a measurable impact on an organisation's exposure to fraud.” The ACFE examined a number of specific anti-fraud controls and measured the median loss in the fraud cases reported in its survey, depending on whether organisations did or did not have a given control in place at the time of the fraud. It concluded: “In every comparison, there were significantly lower losses when the controls had been implemented.”

One important observation in the ACFE's 2008 RTTN was that the two controls associated with the largest reduction in median losses were among the least well-used controls in those organisations included in the survey. The two key controls highlighted by the ACFE in this section of their report are: first, surprise audits; and secondly, job rotation and/or mandatory vacations. We cover surprise audits in Chapter 8 and look at job rotation and mandatory vacations below.

Directors and managers need to be aware of the specific anti-fraud controls that are available and also which of those are likely to prove the most effective in their own organisations, in practice. These anti-fraud controls aim specifically to minimise the opportunities both to commit fraud and to conceal it successfully. There are both preventative and detective controls to manage fraud risk. The prevention controls focus on policies, procedures, ...