Your great weapon to fight against fraud

Surasak Suthamcharu
Partner | Financial Advisory – Forensic 


Whistleblowing channel is an essential tool to help the organization to detect potential fraud and misconduct. As witness by fraud survey from the Association of Certified Fraud Examiners (“ACFE”) over the past 10 years, frauds detected by ‘Tips’ are much greater than any other detection methods. The latest survey in 2022 indicated that 42% of the surveyed fraud cases were detected by Tips.

Globally, governments and regulatory bodies recognize the important of whistleblowing. For example, in U.S., the Sarbanes Oxley Act (section 301) mandates companies trading on the U.S. Stock Exchange to provide a mechanism to employees to anonymously reporting concerns about accounting or audit irregularities. In U.S., the whistleblower can make a report about the fraud and white collar crime to the Department of Justice, while in UK, whistleblower can make a report about fraud including bribery and corruption to the Serious Fraud Office.

U.S. Securities and Exchange Commission (“SEC”) reported that the Commission’s receipt of whistleblower tips has reflected an upward trajectory. Total tips received in 2018 was 5,200 while 6 tips were reported from Thailand.

Recently, Thai National Anti-Corruption Commission (“NACC”) proposed organization to have reporting channel as 1 of the 8 principles of the bribery control system. In addition, Thai authorities such as NACC and SEC provide channels for whistleblower to directly report any misconducts.

With an increasing demand of whistleblowing from authorities and its effectiveness indicated by ACFE’s survey, is it the time for the organization to consider putting in place the internal reporting channels?


Whistleblowing in the wind?

Companies understand that employees see and hear everything that goes on within, including inappropriate behavior and who is involved. Whistleblowing is, perhaps, the only tool that comes close to pointing out a fraud in its nascent stages. Thus, it is important to build, monitor and nurture this channel continuously. Data from the whistleblower needs to be continuously monitored and integrated into fraud risk management for early detection.


Managing whistleblower complaints effectively

Whistleblower and complaint are the two aspects of every whistleblowing. Dealing the two aspects with maturity and sensitivity can help whistleblowing mechanism successful.

Ongoing support to the whistleblower is important to ensure his/her comfortable and not suffering from any adverse treatment as a result of his/her actions. Policies should ensure that any ‘detrimental’ action taken against the whistleblower should be treated as a serious matter and appropriate action ensured.

A clear and well documented process for managing complaints can give greater confidence to whistleblower. Usually, an appropriate senior staff is assigned to deal with the matter. If the allegation is against the senior staff, this scenario can run the risk of allegations being ignored or investigations becoming compromised. Employees need to be made aware of these detailed processes around how their complaints will be handled, so that they can gain trust in the system.


Opening wide enough?

An effective whistleblowing must have an “open wide” concept.

Service hours and channel:

Most companies provide a phone number that employees could call during business hours. The calls may be received by dedicated team. Whistleblowers may be reluctant to make hotline calls from the workplace where they could easily be overheard, have their name show up on caller ID, and tracked in telephone call logs. Thus, enabling access to a 24/7 reporting channel can increase the reporting rate. Offering multiple methods of reporting can also help to generate more tips than just a hotline.


Whistleblower reports are sensitive and tricky things to communicate, so not being able to use local language can deter whistleblowing or adversely impact a report’s completeness and accuracy.


A significant number of tips may come from external sources such as customers, vendors, shareholders, competitors, etc. Encouraging these stakeholders to use your system could generate better tips.

Other characteristics that can encourage whistleblowers to use a hotline include providing anonymity and confidentiality, communicating the independence and transparency in the process, and offering protection to the whistleblower.


Effective communication

A successful whistleblower system requires effective communication to create and maintain awareness of the existence, build employees’ willingness to report, as well as, develop employees’ ability to identify potential wrongdoing.

Companies need to focus their communication on assuring employees that their tips will remain confidential and be properly treated. Once employees trust the whistleblowing and are confident to report, they should be educated about red flags, risks and schemes related to unethical activities. This awareness can be part of a fraud risk management and ethical awareness program. It is important to communicate that every employee has a role in preventing and detecting fraud and the hotline is a key tool to use for that purpose. Armed with this knowledge, employees will be in a better position to act if they experience/ witness a suspicious behaviour.

Whistleblowing - your great weapon to fight against fraud
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