Tip-offs proven most prevalent for early fraud detection
Petaling Jaya, 20 June 2013 — Whistleblowing or tip is by far the most prevalent means by which fraud is detected globally and in Asia. In Malaysia, the implementation of the Whistleblowing Protection Act 2010 and the soon to be introduced Financial Services Act, call for corporates to step up their corporate governance standards and practices. In line with this call, Deloitte Malaysia announced today the establishment of its whistleblowing service, Tip-offs AnonymousTM local contact centre in Malaysia.
According to The Association of Certified Fraud Examiners (ACFE) Report to the Nations 2012, 43.3% of the 1,388 cases reported worldwide were identified by whistleblower tip-offs. The same trend was observed in Asia where, of the 204 cases reported, 43.6% were also detected through a tip. In fact, the report highlighted that tip-offs have been the most common method of initial fraud detection since it began tracking this data in 2002. In the 2012 report, the next highest detection methods were management review and internal audit at 14.6% and 14.4%, respectively.
Speaking at Deloitte’s Tip-offs Anonymous contact centre launch today, Country Managing Partner, Tan Theng Hooi said, “Based on the ACFE study, the typical organisation loses an estimated 5% of its annual revenues to occupational fraud. Having an independent whistleblowing hotline will help companies arm themselves with the most effective and cost-efficient means by which unethical conduct such as fraud and corruption can be detected and to some degree deterred, potentially saving them from losses in the thousands or even millions.”
Tan asserted, "Outsourcing your whistleblowing function to a third party provides independence and transparency and is one of the cornerstones of better corporate governance. It exhibits to stakeholders that your company, regardless of industry or whether public or private sector, is serious about making whistleblowing work to protect stakeholders, whether employees, suppliers or shareholders, and of course, the client company’s overall financial interests and reputation.”
David Lehmann, Director of Deloitte Forensic Malaysia, who will oversee the operations of the new Deloitte whistleblowing contact centre said, “The decision to bring the Tip-offs AnonymousTM contact centre to Malaysia was a strategic one. I have spoken to a lot of people about whistleblowing since first arriving in Malaysia over four years ago and the interest in whistleblowing has gradually increased over the years. We are now servicing a growing number of clients here in Malaysia and the region. As the business community here and in the region becomes more mature in terms of understanding the need for better corporate governance practices, so too has the acceptance of whistleblowing and its benefits.”
Lehmann added, “Deloitte has always been a strong advocate of good corporate governance and ethics. By setting up our whistleblowing contact centre here in Malaysia, we hope to collaborate more closely with like-minded organisations to promote a healthy business community in the country and region.”
Deloitte and the provision of outsourced whistleblowing services go all the way back to 1999, when Deloitte South Africa established its Tip-offs AnonymousTM whistleblowing contact centre in Durban. Today, Deloitte has four such centres with the others located in Australia, and Indonesia. Collectively, these contact centres service the needs of approximately 500 clients globally.
Based on the best practice principles of independence, confidentiality and anonymity, Tip-offs AnonymousTM provides five channels of communication: telephone, dedicated web, email, post and facsimile, for client stakeholders to report serious misconduct such as fraud and corruption. Contact centre analysts are trained in cognitive interview techniques and are multilingual. In Malaysia the main languages offered are English, Mandarin, Malay and Cantonese and the service offers 24/7 coverage.