Compliance Week has a good piece up on a spike in fraud reporting and just what it might mean for the future of corporate compliance efforts.
It seems that – at least according to the Corporate Fraud Index – fraud-related reports account for more than 20% of all compliance reporting activity. This is the highest it’s been since the CFI was created in 2005. Total incidents of reported fraud were also up, nearly 18 percent.
So what’s this all mean? In our post-SOX world, employees are apparently hearing just as much as they should that fraud is not something to be ignored or smoothed over. That’s got to be good news.
But since this index only started tracking fraud reporting in 2005, and we’ve had all kinds of developments since then – an economic meltdown, near-implosions of the financial sector and Dodd-Frank, just to name a few – it’s hard to tell what that increase in reporting really tells us. Are more people aware of fraud, doing their jobs with an eye toward preventing it, and reporting suspicious activities?
Or is there an increase in fraud itself, and reporting is starting to reflect how widespread it is?
What do you think? That’s what the comments are for . . .
There’s definitely more fraud with newer and newer ways of hiding it.
You are right. it is hard to know what the spike in fraud activities considering the factors you listed including the bad economic downturn. However, whatever the reason, it is good to know, like you pointed out, that people seem to be paying attention to fraud and its damaging consequences. Good article. Quality articles like this are a pleasure to read.
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