The most common method of fraud detection is a tip or complaint from an employee, vendor, customer or anonymous informant. About 1/5 of all cases are detected by accident, another 1/5 by internal audit, and about 1/8 by external audit.The relatively low detection rate of fraud by audits does not accurately reflect the effectiveness of audits as deterrents to fraud by putting personnel on notice that a theft is likely to be detected.

This report includes a list of practical loss prevention tips designed to prevent fraud from occurring.