Tracy Coenen talks to a group of CPAs about the top ways fraud is detected within companies. The Association of Certified Fraud Examiners (ACFE) conducts a survey of its members every two years. It consistently finds that the most common way fraud is found within companies is through tips from employees, customers, and vendors.
Next, management review of financial statements and account balances and reconciliations is a very effective technique. The internal audit function can also be very effective at helping to uncover fraud at companies. Sadly, many internal frauds are also uncovered by accident.