Fraud incident reporting accounted for 20.2 percent of all compliance reporting activity from more than 1,000 organizations worldwide in the first quarter of this year.
"While still high, this is a promising sign that fraud reports have stopped climbing in the past year," said Luis Ramos, chief executive officer of The Network, Inc. "Recent data shows that employees are comfortable with and consistently utilizing whistleblower reporting systems, and, as a result, we are starting to see more companies successfully implement and communicate their GRC programs."
The Network, a provider of governance, risk and compliance (GRC) solutions, and BDO Consulting, a division of BDO Seidman, LLP, released the first quarter 2010 findings of its Quarterly Corporate Fraud Index.
The average company lost $8.2 million to fraud over the past three years, according to a recent Kroll Global Fraud Report. "The speed and accuracy of reporting fraud-related tips and closing investigations can have a huge financial impact on the organization. The near misses from the downturn need to be more closely examined to prevent fraud in the future," said Timothy Mohr, Certified Fraud Examiner and partner at BDO Consulting.
Nine out of 10 larger frauds are not reported to authorities, according to a recent report by BDO LLP. As Timothy Mohr, Certified Fraud Examiner and partner at BDO Consulting, explained, "Companies need to continue to protect themselves from fraud regardless of where the fraud incident reporting percentages fall. This will build a stronger ethical foundation that will pay off for companies as the economy recovers."
The Quarterly Corporate Fraud Index is a comprehensive examination of incident report activity from 12 million employees worldwide. The data is compiled from actual incidents reported by clients of The Network and was analyzed by The Network and BDO Consulting. Fraud-related incidents include reports on corruption and fraud, misuse of assets, conflicts of interest, and Foreign Corrupt Practices Act (FCPA) violations.
About The Network, Inc.:
The Network, Inc. provides solutions to help clients foster an ethical culture and mitigate risk. Through a holistic integration of information capture, incident and case management, business intelligence, analytics, and employee communications, The Network serves thousands of organizations in every industry, including nearly 50 percent of the Fortune 500.
About BDO Consulting:
BDO Consulting, a division of BDO Seidman, LLP, provides litigation, investigation, restructuring, and risk advisory services to major corporations, law firms, insurance companies, financial services entities, and government organizations.