After a series of accounting scandals that eventually led to the collapse of Enron, the FDIC reacted, in part, with the creation of the Sarbanes-Oxley Act.
Sarbanes-Oxley 301 forces management to comply with mandates that help reduce the threat of financial fraud. In the context of Sarbanes-Oxley 301, the FDIC is encouraging financial institutions to consider implementing a fraud hotline to assist
The FDIC encourages financial institutions to consider implementing a fraud hotline as a confidential way to identify fraud and reduce fraud-related losses.
In its “2004 Report to the Nation,” the Association of Certified Fraud Examiners states that organizations without ways to report fraud suffered financial losses that were more than twice as high as organizations with anonymous fraud reporting mechanisms.
An important means to ensuring an effective fraud hotline is the awareness by employees, customers, contractors and other third parties of the hotline. Confidentiality must be guaranteed so those reporting the fraud do not have to fear reprisal.
With AntifraudHotline, management can keep the lines of communication open with employees at all times. Employees can free to report wrongdoing because they can do so anonymously. Hear what your employees may not be able to tell you openly by giving them a safe way to communicate.
Pertinent FDIC Links
Guidance on Implementing a Fraud Hotline
More on Fraud Hotlines