The Association of Certified Fraud Examiners’ (ACFE’s) Report to the Nations: 2020 Global Study on Occupational Fraud and Abuse provides ample evidence that some fraud detection methods are better than others. In general, passive methods, such as accidental discovery or notification by police, coincide with longer-running schemes and higher financial costs. To nab dishonest employees quickly and limit losses, your company needs to be proactive. Shorten time, minimize costs Active methods include IT controls, data monitoring and analysis, account reconciliation, management review, surprise audits and internal audit. These methods can significantly lower fraud durations and losses. For example, frauds detected by IT controls had a median duration of six months and a median loss of $80,000. Those found through account reconciliation ran for a median of seven months...

Fraud tends to flourish during periods of prosperity. The reason is simple: When companies experience fast-growing revenues and rising net profits, they may lack a strong incentive to divert resources to preventing and detecting fraud. Fraud schemes can go undetected for months, even years. Furthermore, the sheer volume of legitimate transactions during thriving economic times makes it harder to detect fraudulent transactions. Normally, an economic slowdown correlates with increased fraud detection. But the COVID-19 pandemic has upended normal expectations. Companies may need to find new methods of unmasking fraud. Fraud continues … and even grows  With millions of employees working from their homes, there are fewer people in the office to notice and report irregularities. And many managers are too distracted with crisis-related activities to perform the proper...