Creating an Effective Whistleblower Program

Whistleblower tips are the most common method of detecting occupational fraud. Research by the Association of Certified Fraud Examiners shows that more than 60 percent of frauds are uncovered by tips (see figure 1); in organizations with a hotline in place, tips expose more than half of all frauds. Further, nearly 40 percent  of tips are received from internal employees (see figure 2). 

The Ethics & Action Survey conducted by law firm Labaton Sucharow shows that fraud detection could be bolstered by a well-designed whistleblower program. Specifically, 34 percent of employees have observed or have firsthand knowledge of workplace misconduct, and more than three-quarters would report known misconduct if they could: 1) remain anonymous, 2) do so without retaliation and 3) receive a financial reward for the tip.