Discussion Papers

Early this year the Association of Certified Fraud Examiners (ACFE) published the results of a study that included data from 2410 fraud cases between Jan '14 and Oct '15. The total loss by cases in the study exceeded $6.3B which is an average of $2.7m per case. Respondents estimate typical organization loses 5% of their revenues in a given year as a result of fraud.

Early detection of economic crime is critical and the longer these crimes are undetected the financial impact increases. Tip-offs are the primary source for detection (40%) and organizations that are serious about detection will most likely have a Hotline service - and this definitely works but it's not enough.

When you consider employees make up only 50% of the Tips and the rest come from external parties such as customers, contractors etc. you need to consider a multi-channel strategy for whistleblowers that includes internet sources such as web and email to encourage all reporting.

Most employees know that reporting a wrongdoing is the right thing to do, but cultural factors come into play and the organizations don’t do enough to protect the individual and peer pressure in the workplace can easily get the better of most people. Any solution for whistleblowers should offer anonymity and ideally be two-way communications to support the investigation and protection of the individual.

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