The Companies Act (2008) – Section 159 states in item (7)….“a public company and state owned company must directly or indirectly – (a) establish and maintain a system to receive disclosures contemplated in this section confidentially and act upon them a. (b) routinely publicise the availability of that system to the categories of persons contemplated in subsection (4).
The legislation indicates the crucial importance of including a whistle blowing type of mechanism in any organisation contemplating a fraud prevention policy.
Such a policy should be drawn up with the involvement of a number of specialists, starting with industry specific input from management and including the incumbent accountants and security facilities.
The policy should provide for various checks and balances, protocols and standard operating procedures etc, but controls on their own will not be sufficient to mitigate against fraud risk.
Organisations should also establish a top-down culture that supports those controls with clear and ethical guidelines. Only then, can an effective fraud prevention be designed, with all its component parts (Whistle Blowing being an integral part there of).
For more information on fraud prevention, contact Whistle Blowing.