Fraud Detection
Detect Fraud and Increase your Bottom Line
Organisations lose up to 7% of their annual revenue to fraud. Therefore detecting and addressing internal corruption is an effective way of improving the bottom-line and workplace culture. Despite this Australian corporations lag behind world standards when it comes to detecting fraud.
The Australian Institute of Criminology in 2008 puts the cost of fraud at $8.5 billion p.a., making it the single largest category of crime, representing 40% of all offences. This equates to $2400 for every man, woman and child in Australia.
How can you detect fraud?
KPMG´s 2008 Fraud Survey of Australian and New Zealand organisations found that of all frauds and thefts investigated, 42% of detected fraud cases were uncovered by internal control processes, with notification from external parties (23%) and employee reporting (22%) constituting the other major means by which organisations detect fraud.
Whistleblowing accounted for 47% of all frauds and thefts uncovered in the workplaces of the respondents.
Two other key findings of the survey found that i) fraud was usually detected by a workplace colleague but almost 12 months after it started and ii) the average fraud was $1.5 million.
Fraud is based on trickery and deceit. The statistics demonstrate that it is particularly difficult to detect fraud when it is committed by employees at work.
It is particularly difficult to detect fraud in Australia because of an institutionalised culture that sees whistleblowing as “dobbing”. From the highest levels of leadership in this country, the concept of “mateship” is a defining characteristic of our culture.
Our resistance to reporting the questionable behaviour of those in our networks has resulted in a poor appreciation of what whistleblowing really means, how it can help organisations to detect fraud, and how people can securely and anonymously report fraud.
In many cases of fraud, blatant warning signs or red flags go unnoticed by managers and employees. This is frustratingly illuminated too often in post fraud investigations. Thus, training employees to identify early warning signs or indicators of possible fraud is vital to enhancing your ability to detect fraud.
Predominantly, it´s your employees and external third parties who witness the initial fraud so it´s in the best interests of leaders to encourage whistleblowing and provide a trusted mechanism by which detected fraud can be reported.
People need to be encouraged to report information even if they may perceive it to be small or inconsequential as it may, particularly in cases of fraud, add to the bigger picture or to the jigsaw puzzle often needed to unravel and detect fraud.
The risk is at many levels in the organisation. The further up the hierarchy, the longer it takes to detect fraud. The “period to detect” fraudulent activities of directors and senior managers is often twice that of their subordinates.
The power of these leaders often results in a reluctance of employees to report wrongdoing by their superiors. To trust existing internal controls and reporting systems without developing an external element to a whistleblower program overlooks the fact that despite one´s best efforts some people have unfortunately an inherent distrust of their employer.
People want the security and protection offered by an independent service, not burdened by any potential conflicts of interest, where they can safely and anonymously blow the whistle on corrupt activity or perceived weaknesses in the systems. This will assist organisations to detect fraud sooner and as a result, minimise the risk of lost revenue and potential damage to the company.
Your-Call has developed a new approach to detect fraud and receive information from whistleblowers. This approach blends traditional telephone-based reporting with powerful web-based reporting.
Your-Call´s online reporting solution, Your-Alert, allows directors, officers and executive managers to access disclosure management by tapping into real-time 24/7, live information on matters of concern in 4 key areas: dishonesty; behavioural issues; regulation; and safety.
While the Your-Say solution enables employees, customers, vendors and suppliers to have their say on a range of matters concerning the organisation´s policies and procedures, identification of risks and suggestions for improvement.
Get Started?
If you´re looking to implement a means by which your company can benefit from acting swiftly to combat problems identified by the people who know your organisation best, click here to email us and download our FREE The Ultimate Whistleblowing Checklist on how to establish a best-practice whistleblowing program, or simply call us on 1300 798 101 to discuss how Your-Call can benefit your organisation by helping you, your employees and stakeholders to detect fraud.