Compliance loont: dit zijn de harde feiten!

Every two years, the ACFE conducts a survey among its 90,000 members about workplace fraud. The good news: compliance PAYS OFF! Thanks to a clear code of business conduct, a safe Speak Up culture, training, and an anonymous web-based reporting option, the extent and duration of fraud can be reduced by almost half!

The data below will hopefully convince your CFO and CEO to elevate your compliance program. The study is based on nearly two thousand fraud cases in 138 countries, contributed by forensic accountants (42%), internal auditors (23%), compliance professionals (6%), and other professionals. Below are the highlights summarized for you, along with my TIPS.

Highlights:

43% of all fraud cases were discovered thanks to tips: reports from employees (over half) or third parties such as customers (21%), anonymous reporters (15%), and suppliers (11%). External hotlines ensure that fraud is discovered twice as often. TIP: make sure your Reporting Procedure is also available to read on the internet and the web reporting line is accessible to third parties, preferably through an external website (and please do avoid the terrible word ‘whistleblower’);
reports were over 3 times more often the reason for discovering fraud than internal audits, management reviews, and other methods! TIP: promote a speak-up culture;
reports via website and emails have become much more important than via phone (a quarter to a third more often);
the damage per fraud case was around $145,000 (this is the median, very small and very large amounts are excluded); that equates to about 5% of their revenue (note: the average loss was much, much higher: $1.6m);
almost half of all cases involved corrupt behavior in the broadest sense of the word, such as bribery, falsified purchasing or sales practices, unauthorized discounts, false claims, and the like; 22% of all fraud cases involved theft, 5% falsified accounting; falsification and forged documents and emails were the main methods to try to conceal the fraud;
it takes about 12 months before fraud is discovered (note, this is an average: so some fraud cases can continue for many years); TIPS: some measures should not be absent in your compliance program: a clear anti-fraud policy (employees must report; see my PREVIOUS BLOG ABOUT IT); training (because it reduces fraud size and leads to more reports); reporting via the direct supervisor and regular risk analyses; add an email address, such as Reports@ABC.com, SpeakUp@ABC.com or Compliance@ABC.com;
for compliance professionals, the report also contains interesting details about those who committed fraud; the most harmful were (older) executives, owners, and executives with many years of experience in the same organization; men committed fraud 3 times more often than women; two-thirds had a university degree or higher;
interesting are also the red flags that should make you think: an exorbitant spending pattern; employees in financial trouble; too intimate relationship with a supplier or customer; unwillingness to share tasks with colleagues; quickly irritated or defensive; intimidating. A poor annual review, missing a promotion, and fear of losing their job also increased the risk of fraud.

Want to read more? CLICK HERE for the full report from the ACFE (Association of Certified Fraud Examiners): Report to the Nations 2024.

Or do call me to discuss further your compliance challenges (always free of charge) at 0654914377

Compliance loont: dit zijn de harde feiten!

Recente Blogs

Heb Je Vragen?

Meld je aan voor de maandelijkse nieuwsbrief

Informatie

Handige Links

Contact

Korte Vraag