In the ACFE Insights article “Catching What Prevention Misses: The Case for Detective Controls” by Min Peng, the central message is clear. Fraud prevention alone cannot protect organizations from the full spectrum of threats, because determined insiders and agile schemes find ways around even well designed safeguards. Peng argues that durable antifraud programs require a balanced portfolio in which detective controls complement prevention and close the operational gaps that periodic audits cannot cover.
The piece explains that many companies invest heavily in segregation of duties, access controls, training and third party due diligence, yet still leave blind spots in day to day operations. Preventative measures are essential, but on their own they create a false sense of security when collusion, privilege abuse or subtle process workarounds occur. Peng stresses that internal audits provide valuable assurance at intervals, while detective controls provide continuous feedback that surfaces problems early enough to reduce losses and reputational harm.
Peng defines detective controls as the operative layer that validates whether prevention is working as intended. Routine reconciliations align bank statements and ledgers to reveal discrepancies before they compound. Exception reporting highlights outliers so managers can investigate unusual trends and variances. Management reviews test the economic logic of performance and cost patterns and surprise checks confirm that policies are followed when no one is looking. When these activities are embedded in the business rather than outsourced to audit alone, they become a living sensor network that accelerates detection and response.
Technology now amplifies these practices. The article describes how analytics and AI powered monitoring can examine large transaction flows in real time and flag behavior that deviates from established norms. This capability does not eliminate the need for human judgment, but it reduces manual workload and improves precision so investigators can prioritize the signals that matter. The combination of automated detection and thoughtful review turns detective controls into an engine for continuous risk learning across finance, operations and compliance.
Implementation remains the hard work. Peng notes that resource constraints, change resistance and skills gaps often impede progress and that an overreliance on internal audit can leave organizations with episodic checks rather than true operational vigilance. The remedy is a governance approach that assigns business leaders ownership for both preventive and detective measures, invests in staff training on red flags and safe reporting, builds feedback loops so findings improve the control design and schedules internal audit to test how the combined system actually performs. For boards and audit committees this translates into concrete oversight questions about coverage, exception handling, data pipelines, and the speed and fairness of investigations.
The takeaway for internal audit and corporate governance is a practical one. Effective fraud risk management is not only about keeping bad acts from occurring but also about learning to see quickly when they do. This blog reflects on Min Peng’s “Catching What Prevention Misses: The Case for Detective Controls,” published in August 2025 here.