In its 2008 Report to the Nation on Occupational Fraud and Abuse, the Association of Certified Fraud Examiners has once again revealed how fraud and abuse is most commonly detected. The answer? Tips from employees, vendors and customers. More specifically, a confidential fraud hotline that permits the reporter to remain anonymous is the best method for generating tips, especially when the hotline is available 24/7/365 and is answered by a trained professional.
Fraud Hotline Reporting
The 2006 Corporate Governance and Compliance Hotline Benchmarking Report indicated that 71 percent of those making a hotline report had not previously reported the issue to management. The majority of the reports (65 percent) were serious enough to warrant investigation and 46 percent resulted in corrective action. Typically, trained interviewers work with the reporter to develop all the relevant facts to ensure proper follow-up on the tip. Tips can be made about suspected fraud or other employment abuse, sex or employment discrimination, violations of the law, employee relations, wage and hour issues. You insure your inventory, fixed assets and other aspects of your business. Doesn’t it make sense to invest a modest sum to help protect your cash, accounts receivable, and even your most important asset – your company’s reputation and goodwill? If you don’t already subscribe to a fraud hotline, it’s time to consider one.
This article was originally published in Illuminations: Facts & Figures from people with a brighter way, a Rea & Associates enewsletter, March 18, 2009.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.