Building effective internal detection controls for better fraud risk management
Occupational fraud and corruption have become increasingly prevalent and require industries to consider and emphasise the importance of fraud prevention within their organisations in order to better manage this issue. One of the key obstacles in eliminating occupational corruption and fraud is providing a safe, trusted platform for employees to anonymously report their concerns. Individuals are often too fearful to speak out due to fears of potential victimisation, intimidation or perceived disloyalty to their peers.
Based on the Association of Certified Fraud Examiners (ACFE) 2016 Report to the Nations on Occupational Fraud and Abuse, the typical organization loses 5% of revenue each year to fraud. If the same ratio is applied to the 2015 estimated Gross World Product, this translates to a potential projected global fraud loss of nearly $3.7 trillion.
An anonymous hotline service, such as Deloitte Tip-offs Anonymous provides a low-cost, effective detection mechanism for combatting fraud and corruption in the workplace. Anonymous hotlines are consistently recognised as the most common detective tool for occupational fraud and corruption, and are associated with reduced fraud losses and shorter fraud durations.
One of the key success factors of a hotline service is assuring the anonymity of reporters and the confidentiality of information that they provide. Gaining employee confidence and buy-in often requires extensive and ongoing communication and orientation, driven by a suitable organisational champion, with full executive buy-in and support. Ideally the purpose behind introducing such a facility should link to an organisational culture in which employees feel and are valued, the reporting of any form of unethical activity is understood and encouraged, and in which whistle-blower retaliation is not practiced nor tolerated.
Deloitte Tip-offs Anonymous has been a pioneer in the field of whistleblowing hotline provision since 1999 and has built robust best-practice operating processes, systems and standards to ensure the protection of reporter identity and the integrity of the tip-offs made. We have also gathered a wealth of knowledge and unique insights into successfully implementing and embedding an independent hotline facility within organisations, which we share with our clients in supporting them to effectively raise awareness of their respective hotline facilities.