Which of the following was the most frequent anti-fraud control identified in the 2014 ACFE Global Fraud Survey?

• A. External audit of financial statements
• B. Code of conduct
• C. Internal audit department
• D. External audit of internal controls over financial reporting

Answer: (A)

Independent verification of financial information is a widely used anti-fraud control. An external audit of the financial statements provides objective assurance from an independent party that the reported numbers reflect what actually happened and that any material misstatements or fraud risks are more likely to be detected. This type of audit is common across many organizations, often mandated by law, regulation, or professional standards, which means more firms implement it than some other controls. In the 2014 ACFE Global Fraud Survey, this external financial statements audit was reported most frequently as an anti-fraud control in place, reflecting its broad adoption and the credibility it lends to financial reporting. While tools like a code of conduct or an internal audit department are essential and widely used, they don’t surpass the pervasiveness of external financial statement audits, which is why they didn’t top the list. The external audit of internal controls over financial reporting is more specialized and typically less universally applied than the broad external audit of the financial statements, helping explain its lower frequency in the survey.