The Association of Certified Fraud Examiners has issued its latest “Report to the Nations.” Recognized as the most comprehensive anti-fraud study, this report is issued every two years.
- Typical organization’s estimated annual loss to fraud: 5% of revenue
- Median losses to fraud: $150,000; 23.2% of cases exceed $1,000,000 in losses
- Frauds typically occur for 18 months before being detected.
Importance of hotlines:
Tips are the most common method for detecting frauds (39.1% of cases)
- 47.3% for those with hotlines.
- 28.2% for those without hotlines.
- $100,000 with a hotline
- $200,000 without a hotline
In spite of publications from organizations as diverse and respected as Harvard Law School, the American Institute of Certified Public Accountants, the Society for Human Resource Management and the Association of Certified Fraud Examiners, all identifying hotlines as an important best practice, U.S. organizations lag behind the rest of the world in their implementation. In fact, consider this:
Regions where hotlines are utilized at higher rates than the United States:
In fact, only Canada has a lower implementation rate.
Can you afford to ignore this best practice?
Of course, your hotline will not only catch a fraud on average $100,000 sooner (with one report offsetting the cost of the hotline for many decades for many organizations), it will also deter problems from occurring while providing a strong affirmative defense when problems do occur.
Make a wise choice and contact us for your no hassle quote – http://www.redflagreporting.com/contact-us/ .