New global fraud report confirms that tips from employees are by far the most common way that fraud comes to light – and the most common mechanisms used to report fraud is via speak up platforms.

 

Every year the ACFE publishes their Report to the Nations about occupational fraud.  The Occupational Fraud 2024 report reveals that occupational fraud is very likely the most costly form of financial crime in the world, and a threat to every organisation.

Cost of occupational fraud

The 2024 report makes for interesting reading.  It estimates that organisations lose approximately 5% of revenue to fraud each year, with the cost of fraud increasing the longer it takes to detect.

How fraud is detected?

The research found that by far the most common way that frauds come to light is due to a tip by a whistleblower.  43% of cases were uncovered due to a whistleblower tip. By contrast, only 14% of frauds were uncovered via internal audit and 13% by management review.

The report also highlights that organisations with hotlines were nearly twice as likely to detect fraud via tip that organisations without hotlines, demonstrating the important role of speak up hotlines in a comprehensive fraud detection program.

Who is reporting fraud?

ACFE’s research also found that over half of all tips (52%) came from current employees within the organisation. External sources including customers, suppliers and competitors accounted for approximately one third of all tips.

What this means for fraud detection

This research reinforces the importance of implementing trusting speak up mechanisms, and communicating their availability to employees and suppliers.

Your Call provides external web-based and telephone reporting hotlines that enable people to speak up safely and report corporate misconduct, including fraud. Book a meeting to find out more.