By Chrissie A. Powers, CPA/CFF, CFE, CVA
Most frauds are detected via tips from employees, vendors, customers, and other sources. Your company should develop methods to encourage reporting of suspicious activity which should extend beyond your employee base. The Association of Certified Fraud Examiners has reported that fraud is discovered 34 percent of the time via tips. A hotline is a cost effective way for the company to identify and investigate allegations of wrongful misconduct. To reap the most rewards, the hotline should be confidential, anonymous and answered 24 hours a day by a third party.
It is important to communicate the hotline through numerous means. Most callers (39%) acknowledged awareness of the hotline through posters/signs, according to the 2007 Corporate Governance and Compliance Benchmarking Report (The Study). The Study showed that 65% of the tips were serious enough to warrant an investigation and 46% resulted in corrective action taken by management. If you believe that the concerned individual will notify management of the issue and you don't need a hotline, you are wrong! 71% of callers did not notify management of the issue before making a report via a hotline (2007 Study). If you are ready to take action and deter fraud at your company, we are ready to help.
If your client's organization suspects fraud, Powers Forensic Accounting, LLC can investigate the allegations. If you have additional questions or concerns regarding fraud, don't hesitate to contact us at 614-745-5192.