Many people think that by having a hotline or report line the company is protected from fraud. They think that if there are no reports, everything is fine. Here is the first lesson: there is a big difference between establishing controls and that those controls are effective. If no one uses the hotline it doesn’t mean that a fraud is not occurring. The company can have many controls, but the key point is that if someone reports, is the company going to believe that person? Is the company going to protect that person? On an international level, the top source to detect fraud are the whistleblowers. This is a real and effective source to know if there is a fraud, but no one will speak up if they see that the company won’t protect them or doesn’t do something to correct it.

Sanctions are another key control to prevent fraud. What is the company willing to do so that fraud does not occur, or does not recur? Changing the fraudster to another area, pretending that the fraud never happened, or not correcting the controls is a way to contribute for impunity to happen. It is of no use that the company has an anti-fraud program or knows where it is vulnerable to fraud risk if the controls are not checked to ensure they are effective. Such as when red flags are raised; who monitors, analyses what is happening?

Lead with example is another important control: the company shows with actions that there is zero tolerance to fraud by not making exceptions to the rules for anyone, nor the sanctions are minimized.

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By Mónica Ramírez Chimal, International Speaker & Trainer, Writer, Consultant-Partner at Asserto RSC