Fraud Triangle Analytics

[Figures referenced in this article are no longer available. — Ed.]

A well-known statistic from the 2008 ACFE Report to the Nation on Occupational Fraud & Abuse says that 66 percent of occupational fraud is detected by anonymous tips or by accident rather than by internal audit, internal controls, or other measures. Internal audits discover only 19.4 percent of occupational fraud, according to the report. 

These statistics challenge the profession. Why isn't internal audit - often the focus of a large amount of time and money in organizations - at the top of the list for detecting incidences of fraud? Part of the answer could be right in front of many CFEs.

The Gartner Research Group, in its May 2005 study, "Introducing the High-Performance Workplace: Improving Competitive Advantage and Employee Impact," states that 80 percent of enterprise content - such as e-mails, user documents, presentations, and Web material - is unstructured in nature. Yet, most internal audit and anti-fraud testing only focuses on the remaining 20 percent of data that's structured, like financial accounting systems or transactional databases.