Board directors least likely to receive fraud training

According to the ACFE’s recently published Fraud Awareness Training Benchmarking Report, 14 percent of respondents said board members receive no fraud training – the poorest result for any organisational role.

One of the most important components of any effective anti-fraud program, states the Association of Certified Fraud Examiners (ACFE) report, is fraud awareness training for an organisation’s employees, officers and directors. Effective fraud awareness training can help an organisation better mitigate fraud risks, increase the effectiveness of other anti-fraud controls, and ensure that anti-fraud policies and reporting protocols are followed.

While there is no one-size-fits-all approach to fraud awareness training, understanding how organisations approach this component of their anti-fraud program can help them benchmark such initiatives and identify best practices. To assist with this, the report’s survey of ACFE members, explored the way organisations develop, implement, evaluate, and support their programs.

In late January 2021, the ACFE sent a 19-question survey to 81,256 members across multiple industries, with respondents asked to share information about their organisation’s fraud awareness training programs and policies. Survey responses were collected anonymously, and 1,706 were usable for the purposes of this report .

The report found that 14 percent of board members receive no fraud training – eight percentage points higher than for any other role type within an organisation. The ACFE’s research director Andi McNeal, CFE, CPA, says this can be a costly oversight.

“The board of directors plays an important role in an organisation’s fraud risk governance,” she said. “To effectively discharge this responsibility, the board needs to be educated on the organisation’s specific fraud risk profile and committed to discussing fraud risks as part of their oversight agenda.”

While organisations may want to re-evaluate offering more training specifically to their board members, they appear to understand the importance of training overall. The report shows that the majority of organisations provide fraud awareness training for all employees, and 66 percent make the training mandatory.

The most common topic covered in training is red flags of fraud, with 91 percent of organisations including it and 6 percent planning on including it in the future. The least common topic covered is past fraud cases or issues. While 69 percent of organisations discuss previous fraud occurrences in their training, 17 percent do not currently include this topic or plan to do so in the future.

“Reasons for not including it in future trainings are likely related to organisations not wanting to give employees any ideas, not wanting to admit shortcomings in controls or not trying to acknowledge failures to prevent fraud,” said ACFE senior research specialist Mason Wilder, CFE.

Wilder, the author of the report, said that this avoidance to discuss real fraud cases means that organisations are missing out on important and effective lessons. “Highlighting actual cases illustrates to employees that the risks are very real and can impact the organisation in significant ways. Plus, depending on how those prior incidents were handled, covering them in training can show employees that the organisation takes fraud seriously, is actively looking for it and will punish anyone who commits fraud.”

The Fraud Awareness Training Benchmarking Report also has benchmarking data about who conducts the training, what formats are most popular, sizes of training budgets and more.