Report: Jump in Fraud Reporting

A new report released by the Network Inc., a provider of corporate compliance solutions including the prevention, detection, management and analysis of fraud, and BDO Consulting  says that in-house fraud is on the rise as economic conditions lead to stress and fear about the financial future.

The Corporate Governance and Compliance Hotline Benchmarking Report’s key findings include:

•    Fraud-related incidents, including reports on corruption and fraud, misuse of assets, conflicts of interest and Foreign Corrupt Practices Act (FCFA) violations, from first quarter 2006 to first quarter 2009, surged from 10.9% to 21%

•    The industries with the highest overall incident reports were retail trade; service industries; and transportation, communication and utilities

•    When case outcome was provided, 71% of reports warranted an investigation with 38% resulting in corrective action taken in 2008

•    For the last five years, the majority of participants remained anonymous when submitting an incident via hotline; however, fewer respondents opted to remain anonymous in 2008 as compared to 2007

"Our goal for this benchmarking study was to identify a starting place for companies to evaluate their own ethics and compliance programs, particularly fraud prevention, detection and investigation," said Timothy Mohr, CFE and partner at BDO Consulting. "Organizations will find benchmarking data a valuable tool in determining if changes are needed to their program, if investigations should be utilized and what should be done to build an ethical culture within their organization."