Corporate Fraud Is on the Rise — and So Is Fraud Reporting
According to a recent survey released by The Network, Inc., fraud-related incidents in the workplace are on the rise: The total number of reported fraud-related incidents increased by 18.3% compared to the second quarter of 2010. The survey compiles statistics from an examination of fraud-related incident reports from more than 1,000 organizations employing nearly 15 million workers. Another interesting fact the survey reveals is that fraud-incident reporting was at its highest level ever in the second quarter of 2011. Reports of fraud-related incidents — including corruption and fraud, theft, misuse of assets, conflicts of interest and Foreign Corrupt Practices Act (FCPA) violations — accounted for 20.8% of actual incidents reported, up 1.2% over the second quarter of 2010.
The bad news that corporate fraud is trending upward right now should surprise no one; it's generally accepted that fraud increases in tough economic times. The good news is that even as the number of fraud-related incidents increases, organizations stand a better chance of reducing fraud-related losses because they are detecting more of these incidents.
Increased reporting of fraud-related incidents may have something to do with the economic downturn. The Network's CEO, Luis Ramos, believes that in a poor economic climate, employees may be more likely to report co-workers' fraudulent activities because they're more concerned about their job security and the financial health of the organization.
But the increase in fraud-incident reporting is likely also linked to the development and enhancement of in-house ethics and compliance training programs, as well as to improved fraud awareness and response mechanisms. Organizations that continue to strengthen and adapt their ethics and compliance programs may be able to gain the upper hand against workplace fraud.Categories: General Business Compliance, International Compliance, Financial Integrity
Tags: fcpa, Fraud