EY Study: Workers Speak Out on How to Stop Fraud
Investors may have been shocked by corporate fraud, but not workers. Results of a recent study by Ernst & Young show workers are aware of workplace fraud and they have some pretty good ideas about how to stop it.
The study, which was conducted between June 3rd and 6th, found employers lose 20% of every dollar earned to some type of workplace fraud. Examples of types of fraud and the percentages of employees who knew about them:
Theft of office items (37%)
Claiming extra hours worked (16%)
Inflating expense accounts (7%)
Taking kickbacks from suppliers (6%)
Almost half of those surveyed (44%) felt their employer could do more to reduce fraud in the workplace. Examples of actions and the percentages of workers who advocate them:
Tougher sanctions for employees caught in the act (59%)
Better role models and leadership from management (58%)
Better communication to employees (56%)
Better investigation of suspected problems (56%)
Improved screening of new employees (54%)
Another way to stop fraud is to encourage whistle-blowing. EY found fully 80% of employees surveyed are willing to report a problem. A significant portion (39%) said they would be less likely to report fraud if they needed to identify themselves. The preferred ways to blow the whistle to management, and the percentages of workers who prefer them:
Anonymous phone call (30%)
Confidential hotline managed by an outside party (27%)
Anonymous letter (20%)
Anonymous use of a company website (16%)
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.