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Survey Reveals Simple Steps for Curbing Workplace Fraud NEW YORK, Aug. 7, 2002 The bad news: employers lose a staggering 20 percent of every dollar earned to workplace fraud. The good news: there are a number of simple, low-cost steps your business can take to curb the problem. These were the findings of a recent study conducted for Ernst & Young LLP, where 617 American workers were surveyed by telephone between June 3rd and 6th, marking the first time that the professional services firm has measured the attitudes of American workers when it comes to fraud in the workplace.
The study found that one-in-five American workers are personally aware of fraud in their workplace and that 80 percent would be willing to turn in a colleague thought to be committing a fraudulent act, however, only 43 percent actually have.
When asked which specific fraudulent acts employees were aware of in their workplace 37 percent reported "theft of office items." Other types of fraud witnesses included "Claiming extra hours worked" (16 percent), "inflating expense accounts" (7 percent) and "taking kickbacks from suppliers" (6 percent).
Women were more likely than men to report fraudulent activities, and older employees were significantly more likely to be willing to report a fraudulent act than younger employees, found the survey.
Interestingly, when asked to define the type of individual more likely to be involved in fraudulent activities the majority of respondents described an employee who had been with an organization for more than three years, held a junior level position, and was male and younger than 35.
With 80 percent of employees surveyed willing to report a problem, making an anonymous phone call (30 percent) ranked highest as the best means to report fraud to management. An additional 27 percent would be comfortable reporting workplace fraud by calling a confidential hotline managed by an outside third party. Other options included sending an anonymous letter (20 percent) and using a company website anonymously (16 percent). Notably, 39 percent said they would be less likely to report fraud if they needed to identify themselves.
Almost half of those surveyed (44 percent) felt that their employer could do more to reduce fraud in the workplace. According to the respondents, effective actions management can take include: "tougher sanctions when employees are caught in a fraudulent act" (59 percent), "better role models and leadership from managers and supervisors" (58 percent), "better communication to employees about what is and is not allowed" (56 percent), "better investigation of suspected problems" (56 percent), and "improved screening of new employees" (54 percent).
See also: SmartPros Guide to Fraud Prevention.
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