Blowing the whistle: a well-designed, accessible whistleblower hotline can be a powerful tool in the fight against fraud.
Internal Auditor › Vol. 63 Nbr. 3, June 2006
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Blowing the whistle: a well-designed, accessible whistleblower hotline can be a powerful tool in the fight against fraud.
FOR MOST BUSINESSES, fraud represents a significant threat to the organizational coffers. Nearly half of all companies worldwide have been victims of economic crime in the past two years, costing them an average of US $1.7 million, according to Pricewaterhouse-Coopers' Global Economic Crime Survey 2005. In fact, the Association of Certified Fraud Examiners (ACFE) estimates that U.S. businesses lose 6 percent of their revenue--more than US $600 billion--to fraud annually. Since the U.S. Sarbanes-Oxley Act of 2002, Canadian MI 52-110, and UK Combined Code on Corporate Governance were introduced, most public corporations and many private organizations have implemented a whistleblower hotline to help curtail this loss. For internal auditors, this may be the most beneficial aspect of the entire governance reform movement, because an effective hotline is a powerful tool for fighting fraud.
[ILLUSTRATION OMITTED] Hotlines repeatedly have proven their ability to detect and deter illegal behavior. According to th...See the full content of this document
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