The Network and BDO Consulting Release Q4 2009 Fraud Activity from 12 Million Employees Worldwide
The Network, Inc., a leading provider of governance, risk and compliance solutions, along with BDO Consulting today released the fourth quarter 2009 findings of its Quarterly Corporate Fraud Index. In fourth quarter 2009, fraud incident reporting accounted for 20.3 percent of all compliance hotline-related activity from more than 1,000 organizations worldwide.
Following a surge of in-house fraud in 2008, the Quarterly Corporate Fraud Indexindicates that fraud reports have stopped climbing in 2009—even decreasing slightly in the third and fourth quarters of 2009. In first quarter 2009, fraud accounted for 20.5 percent of all reports, compared to 20.3 percent last quarter.
When comparing first quarter 2008 to first quarter 2009, there was a 24 percent increase in fraud reporting, but fraud reporting has leveled in the past four consecutive quarters of 2009. Over the past three years, first quarter comparisons of fraud reporting are as follows:
- First quarter 2006—10.9 percent
- First quarter 2007—14.3 percent
- First quarter 2008—16.6 percent
- First quarter 2009—21.0 percent
"In the wake of an economic recovery, this leveling, even slight declining, of in-house fraud marks progress," said Luis Ramos, chief executive officer of The Network. "Yet, fraud reporting only tells part of the story. A leveling of the percentage of fraud reports could be the sign of a rebounding economy, a strong compliance program, or, in contrast, mean that employees are not aware of or comfortable with anonymous whistleblower reporting systems."
According to a recent report by BDO LLP, nine out of 10 larger frauds are not reported to authorities. As Timothy Mohr, Certified Fraud Examiner and partner at BDO Consulting, explains, "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, waste and abuse.
For more information regarding the Quarterly Corporate Fraud Index, visit www.tnwinc.com or email corporatefraudindex@tnwinc.com.
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. Established more than 25 years ago, The Network pioneered the development of anonymous ethics and compliance reporting systems. For more information, visit www.tnwinc.com.
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. Our highly experienced and well-credentialed professionals draw upon a range of industry knowledge and completed consulting engagements throughout the United States and internationally to provide clients with unparalleled service. BDO Consulting leverages the global industry and accounting knowledge of the BDO International network, providing rapid, strategic advice to assist our clients with dispute resolution, risk management, financial solvency and regulatory compliance issues. www.bdoconsulting.com.
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