A new report shows that for the third consecutive quarter, fraud reporting within companies has reached an all-time high. The fourth quarter 2011 findings of the "Quarterly Corporate Fraud Index" by The Network, Inc. and BDO Consulting show that the Fraud Reporting Percentage (the percentage of fraud-related reports versus all reporting activity) hit a record high of 21.6 percent. The report uses compliance reporting activity from more than 1,400 organizations worldwide, including nearly half of the Fortune 500.
The record FRP of 21.6% for Q4 2011 was an increase of 2% compared to the Q4 2010. The report found that the total number of reported fraud-related incidents also rose 15.2% over Q4 2010.
Luis Ramos, CEO of The Network, noted that "the upward trend in fraud reporting may actually indicate that organizations are working harder than ever to fight the risks posed by fraud. A key to detecting fraud is to have a workforce willing to report it to you by creating a culture that does not tolerate retaliation.” As pointed out by Sarah Johnson of CFO.com, the rise in fraud reports may also be a sign that while the bounty programs in Dodd-Frank caused companies to fear that employees might go straight to regulators (and not the company) with fraud tips, this may not be the case.