LIBREA
AN estimated five percent of corporate revenues are lost annually due to fraud.
According to the Association of Certified Fraud Examiners (ACFE) 2018 Report to the Nations, this loss is estimated to exceed US$7 billion worldwide.
To help abate mounting corporate fraud, P&A Grant Thornton, one of the top five auditing firms in the country, has launched an upgrade to its online whistleblower reporting service.
Called ProActive Hotline, the secure, web-based service lets whistleblowers hide their identity when reporting theft, corruption, bribery, and other misconduct in the workplace, whether committed by people of authority, by an employee, a customer, or a supplier of the company.
“Misdeeds and unethical corporate practices sometimes go unreported in organizations because employees have become fearful of being targeted for reprisal or retaliation by perpetrators of fraud or misconduct,” said P&A Grant Thornton Partner and Advisory Services Head Emiliano Librea III.
“This is why firms must provide an environment where witnesses can confidently yet anonymously report these malpractices.”
User companies can subscribe to the online service by going to the website, www.proactivehotline.punongbayan-araullo.com, and pay an annual fee of P150,000.
“Whether one is a small-scale business or a huge conglomerate, any firm is vulnerable to fraud especially when its internal control systems are weak,” said Librea.
He added that corruption, such as conflicts of interest, bribes and kickbacks, and asset misappropriation are among the common cases of fraud in companies.
Certain industries or company departments that deal with large contracts or assets can be at risk for high-value fraud if the necessary checks and balances are lacking.
“The initial detection of fraud in the organization via a tip reported through the ProActive Hotline could reduce further losses for companies,” he added.
According to ACFE, organizations with hotlines detect 46 percent of its fraud cases via tips.
Besides strengthening internal controls, companies that are looking to enhance their fraud management programs should also determine how ethical malpractices in workplaces could be lessened by their zero tolerance for fraud.
“Leadership must clearly define what fraud is and what it does to an organization. They have to be a good example to their people. Regular and frequent communication with employees about what is or is not acceptable behavior is best practice,” Librea said.
“Awareness building is also important. Companies can choose to publish the ProActive Hotline URL on the corporate website, company walls, internal bulletin boards, and on forms such as sales invoices and purchase orders. The broader the circulation, the better the chances they can detect fraud. That sends a message to the entire organization as well as its stakeholders, customers, and suppliers that they are an ethical company to deal with,” he added.
He shares how ProActive Hotline works:
The whistleblower goes to the subscriber’s ProActive Hotline URL.
The whistleblower is then asked to select a category and to answer corresponding questions that can be customized to certain types of fraud. The whistleblower’s identity is anonymous, unless he/she opts to share his details in the report.
The whistleblower gets assigned a ticket number so he or she can track the status of the report or action taken by the company.
A company ProActive Hotline Administrator and a report recipient (also called a “Category Handler”) receive alerts upon the submission of the report.
A list of anonymous reports are generated and extracted for reporting purposes to authorized individuals, such as the internal auditor and the CEO.
Dashboard and analytics features containing “open,” “closed,” and “under investigation” anonymous reports are presented per parent or subsidiary for access by authorized corporate representatives.
ProActive Hotline is endorsed by the Integrity Initiative, a private sector-led movement within the Philippine business community formed to promote ethical business practices and fight corruption. /PR
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