Fraud, corruption, and other types of economic crimes are a serious challenge for organizations of all sizes worldwide. According to PwC’s Global Economic Crime and Fraud Survey 2022, 46% of surveyed organizations had suffered some form of fraud or economic crime within the previous 24 months. The Association of Certified Fraud Examiners, in its 2022 report on occupational fraud, determined that a typical fraud case lasts 12 months before detection, and that organizations lose 5% of revenue to fraud each year. The 2,110 cases their report covered caused total losses of $3.6 billion.
In the face of these sobering statistics, organizations need to identify the most effective tools at their disposal for identifying and stopping fraud and corruption as quickly as possible. One key method is facilitating safe, anonymous employee reporting through #NotMe.
Fraud is the intentional use of deception for financial or personal gain. The three primary forms of occupational fraud are asset misappropriation, such as misuse of employer resources or employee theft; financial statement fraud, in which the perpetrator falsifies the organization’s financial statements or makes deliberate omissions; and corruption, like bribery, extortion, and similar crimes. When individuals exploit or abuse their positions for their own benefit, the organization can suffer both financial and reputational damage.
Strong anti-fraud controls aligned with clearly articulated ethical guidelines are essential for reducing instances of fraud and more quickly detecting incidents. However, the ACFE report highlights the essential role of employee reporting in stopping fraud. Their survey revealed that 42% of frauds were detected by tips, nearly three times as many as the next most common method of detection. Over half of all tips received came from employees. Organizations without clear means for reporting took six months longer to detect fraud and incurred double the median loss.
When potential reporters feel unprotected by their organization, or when they think that perpetrators won’t be punished for acts of corruption, they often fail to share what they know. Giving employees a fast, safe way to report what they’ve witnessed encourages them to disclose vital information before your organization suffers further harm. It also gives you the opportunity to discover and root out misconduct before regulators do, helping you avoid costly fines and negative publicity.
#NotMe puts the means for every member of your organization to submit a private, secure report to the relevant stakeholders at their fingertips. With optional anonymity, your employees will feel empowered and safe to do the right thing. Unfortunately, even strict internal controls and a reputation for fair dealing can’t prevent every instance of economic crime in an organization. However, a modernized, easy-to-use reporting system can greatly reduce the odds that crime will go undetected.
To find out more about how #NotMe can help your organization eliminate fraud and corruption, or to request a demo, contact us here.