Accountants' perceptions regarding fraud detection and prevention methods

James L. Bierstaker (Department of Accountancy, College of Commerce and Finance, Villanova University, Villanova, Pennsylvania, USA)
Richard G. Brody (School of Business, University of South Florida, St Petersburg, Florida, USA)
Carl Pacini (Department of Accounting and Finance, College of Business, Florida Gulf Coast University, Ft Myers, Florida, USA)

Managerial Auditing Journal

ISSN: 0268-6902

Publication date: 1 June 2006

Abstract

Purpose

The purpose of this study is to examine the extent to which accountants, internal auditors, and certified fraud examiners use fraud prevention and detection methods, and their perceptions regarding the effectiveness of these methods.

Design/methodology/approach

A survey was administered to 86 accountants, internal auditors and certified fraud examiners.

Findings

The results indicate that firewalls, virus and password protection, and internal control review and improvement are quite commonly used to combat fraud. However, discovery sampling, data mining, forensic accountants, and digital analysis software are not often used, despite receiving high ratings of effectiveness. In particular, organizational use of forensic accountants and digital analysis were the least often used of any anti‐fraud method but had the highest mean effectiveness ratings. The lack of use of these highly effective methods may be driven by lack of firm resources.

Practical implications

Organizations should consider the cost/benefit tradeoff in investing in highly effective but potentially underutilized methods to prevent or detect fraud. While the costs may seem prohibitive for small organizations, substantial cost savings from reduced fraud losses may also be significant.

Originality/value

By identifying methods that work well for fraud detection and prevention, prescriptive information can be provided to accounting practitioners, internal auditors, and fraud examiners.

Keywords

Citation

Bierstaker, J., Brody, R. and Pacini, C. (2006), "Accountants' perceptions regarding fraud detection and prevention methods", Managerial Auditing Journal, Vol. 21 No. 5, pp. 520-535. https://doi.org/10.1108/02686900610667283

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited

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