The Whistleblower's Challenge

The 2009 scam by a large IT company, in essence

, was an inflation of the revenue and profit figures of the company by its promoters. They tried to make the company look better than it was. We have a similar story today that also has its origins in 2009.

In the last few days it has been reported that another company is under scrutiny by several government agencies. The company is being investigated for a host of alleged irregularities in its operating and financial processes. The case has come to the attention of the authorities only because they received a tip-off from an employee of the company who sawwhat was happening. While the case is still in the early stages one important point needs to be made. Scores of frauds would not have come to light were it not for the fact that an employee alerted the authorities to the situation. If whistleblowers had not come forward many corrupt organisations would still be going about their illegal business. It is not a widely known fact that 60% of company fraud cases are discovered because of tip offs received from employees. Another study has revealed that 74 percent of employees have first-hand knowledge of wrong-doing within the company.

The study further states that whistle-blowing employees are very unlikely to report misconduct and fraud to internal audit or similar departments. The reason is that they fear repercussions like the loss of the job or persecution. This keeps many people from blowing the whistle on fraudulent activities.

Since many companies suffer because of internal fraud they need to have robust processes in place to prevent fraud. They must also have reporting processes that offer confidentiality and protection to whistleblowers. It is only then that more people will come forward and report illegal activities. India, unfortunately, does not have a great record in whistle-blowing cases, nor does it have any laws or regulations that protect those people that do come forward with information about improper activities. So they keep quiet and who can blame them.

Read More:http://www.authbridge.com/resource-center/industry-updates.html

The Whistleblower's Challenge

By: AuthBridge

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