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Organizations typically lose 5% of their revenues, on average, to fraud each year. People are an organization’s best asset in preventing, detecting, and deterring fraud. Industry data shows that anonymous tips are by far the most likely means of detecting fraud. In addition, knowledge that a reporting channel/hotline is in place can help prevent fraud because individuals may fear that it will be discovered and reported.

Independent confidential reporting mechanism not only helps in detection of fraud, but is also a leading corporate governance tool resulting in prevention and deterrence. Many companies have an Ethics Code-of-Conduct or policy. However, it is not backed up by adequate mechanisms to make it an effective tool for detection and prevention of fraud or misconduct. Our services address this gap.

Our professionally developed and managed Corporate Integrity Program for reporting and management of instances of fraud and misconduct reduces risk through proven systems, processes, expertise and global best practices.

Consider This:

  • 1 in 5 employees have personal knowledge of workplace fraud and 39% are more likely to report it if they can be anonymous
  • 40% of fraud cases were detected through tips given by people, 50% of them being employees
  • 67% of tips in detecting fraud cases were communicated via anonymous reporting channels
  • Where an anonymous reporting mechanism was in place:
    • The average size of fraud losses were 61% lower
    • The average duration of a fraud scheme was reduced by seven months
  • In India, out of the 58% companies that witnessed fraudulent activities last year, 62% indicated that whistle-blowing tips helped in their detection
    Global Fraud Survey, Association of Certified Fraud Examiners (ACFE), 2010
    Ernst & Young’s India fraud Survey 2012

Serious About Corporate Integrity?

  • Implement one of the easiest and least expensive ways to reduce revenue losses due to fraud, waste and abuse
  • Internal frauds are much more likely to be detected by a tip than by audits, controls or any other means
  • Increase early detection and lower the average scale and duration of fraud schemes
  • Comply with Companies Bill,2012 clause 177, Clause 49 (IV) and Sarbanes–Oxley Act section 301(4) using industry best practices
  • Increase your knowledge of what is going on in your business
  • Improve corporate governance and drive your culture of integrity
  • Improve transparency and visibility. Identify systemic issues and gaps in knowledge
  • Increase employee morale, productivity and retention

Know the Unknown

Confidential Reporting Channels Multi-channel (web, telephone, e-mail etc.) reporting mechanisms allowing for confidential and private stakeholder communications. Customized for each organization.
Whistle-blower Services A mechanism to provide a platform for anonymous complaint-handling including sending information back to the whistle blower. Designed to align with the Corporate Code-of-Conduct or Whistleblower Policy and achieve compliance using industry best practices. Establishing a Corporate Vigil Mechanism.
Anti-fraud and Ethics Hotlines Safe and anonymous telephone based Hotlines, globally accessible. Leading corporate governance tool in detecting and deterring fraud and misconduct. Building whistle-blower trust.
Case Management System Web-based platform to manage reported instances of wrongdoing. Central case repository, case updates, reporter communications, management dashboard with analytics and trending and more.
Forensic Investigation Support Support for forensic investigations via our partners in forensic auditing.
Training and Awareness Preparation of roll-out strategy including conceptualization and development of training and publicity content. Wallet cards, posters and E-mail awareness campaigns. Delivering training to target audience or training the trainers.

Regulatory Framework in India

Regulatory Framework in India

Provisions related to vigil mechanism in Companies Bill 2012

Section Provision Summary
Sec 177 (9)
  • Establishment of “vigil mechanism”
  • Every listed company or such class or classes of companies, as may beprescribed, shall establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed
Sec 177 (10)
  • Safeguards against victimization
  • Policy against victimization of persons using the mechanism
  • Provide for access to Chairperson of Audit Committee in appropriate or exceptional cases
  • Display policy on the company website
  • “Vigil mechanism” to be included in Board’s report
Schedule IV
  • Code for Independent Directors
  • Ascertain and ensure that the company has an adequate and functional mechanism
  • Ensure that the interests of individuals who use the mechanism are not prejudicially affected

How it works

How it works

Success Factors:

  • Providing anonymity. It is tough to have an effective system without it
  • Filtering process and disregarding of reports that are not bona fide, do not have sound basis or are non-serious; in order to avoid unfair reporting and misuse of the system and wastage of senior management time
  • Awareness levels of employees and stakeholders and tone at the top
  • Communicating your objectives, who will use the system, how the information will be processed, and the expectations you set among the users that they’ll be heard
  • Delegation of response to the right constituency (audit, legal etc.) and under strict confidentiality rules
  • Connecting every stakeholder with the integrity process of your organization with periodic reminders
  • Providing access to external stakeholders like vendors, suppliers, lenders, etc. as they act as an important source of information on potential wrongdoing
  • Incorporating global best practices including ones from OCEG, ICC, ACFE, AICPA etc.

Integrity Matters Advantage:

  • Availability of professionally developed and managed services
  • Highest level of confidentiality, data security, privacy and desired anonymity
  • External provider helps establish the program’s independence and credibility
  • Supports positive perception of your organizations commitment
  • Flexibility in the choice of reporting channels along with high availability
  • Easily extended to your external stakeholders like vendors, business partners etc.
  • Incorporation of global best practices, including ones from OCEG, ICC, ACFE, AICPA etc.
  • Reduction of IT costs by leveraging Software-as-a-Service (SaaS) capabilities
  • Saves senior management time by minimizing reports without substance or non-serious in nature
  • Prevents management override of controls and attempts to detect identity of reporter

Independent Services deliver clear results:

Where independent reporting services were in place –
  • Observed misconduct fell from 72% to 55%
  • Staff comfortable to report misconduct from 51% to 88%
  • Belief appropriate action taken from 41% to 86%
  • Belief satisfied with the outcome from 30% to 68%
  • Belief that the tone is right at the top from 39% to 85%
    Source: KPMG: Integrity Survey: 2008 - 2009

Data Security and Privacy:

  • Information security controls based on NIST framework and industry best practices including ISO 27001
  • Military grade encryption to encrypt information in storage and transit
  • Role-based access control on a “need to know” basis and “least privilege” principle
  • Web portal application and systems periodically tested for security flaws by experts
  • No tracking/logging of IP address and caller ID’s and such Personally Identifiable Information (PII) to protect identity and privacy of reporters
  • Periodic IT security audits and testing of controls for operating effectiveness
  • Dedicated Information Security Certified personnel (CISSP, CEH)

Information for Reporters

This system is used to submit information directly to the apropriate authhority in the organization.You are ENCOURAGED to identify yourself as this will help in carrying out a prompt and thorough investigation.

ALTERNATIVELY, you do not have to give your name or personal details as the system has been designed to enable anonymity and configured such that your email address/phone number can not be identified or traced.

PLEASE NOTE: Organizations aim to promote a culture in which employees feel able to raise genuine concerns without fear of victimisation, discrimination or disadvantage. Consequently, no action will be taken against an employee who raises a concern in good faith, even if it is found to be unjustified after investigation. HOWEVER, concerns which are found to have been raised maliciously or for personal gain may result in disciplinary action.

Integrity Insights

KPMG India Fraud Survey 2012

The KPMG India Fraud Survey Report 2012 focuses on futuristic fraud and appropriate mitigation strategies. It also contains sector specific findings along with a KPMG in India’s perspective on fraud in some key sectors.

PwC guide to Mitigating Fraud and Misconduct in the Indian Manufacturing Sector:

This report has results from survey of economic crime in the Indian manufacturing sector. It shows that one fourth of the companies are impacted by economic crime and the same is on the rise. This is in-line with the rise in instances of fraud globally in the post-recession era. It shows types of fraud, drivers of fraud, profiles of fraudsters, methods of fraud detection and the gap between reality and management perception of fraud.

ACFE´s Report to the Nations on Occupational Fraud And Abuse:

Details the survey results of Certified Fraud Examiners (CFEs) who were asked to provide specific information on one fraud case he or she had personally investigated. The end result is a comprehensive report that sheds light on occupational fraud and abuse while offering stark lessons and valuable insights about its prevention and detection.

Global Fraud Report 2013/14 – Kroll:

This report on Fraud released by Kroll has a section on India. Key points are -

— Number of companies affected by internal fraud and average revenue lost to fraud in India is much higher than the global average

— Perception of fraud risk is the lowest as compared to actual instances of fraud

Corporate governance: Role of Independent Directors in India:

Highlights responsibility of IDs for the prevention and detection of fraud. Includes implementing good governance and Giving due cognizance to the whistleblower mechanism.

About Us

Integrity Matters is an independent, privately held partnership firm dedicated to promoting good governance through technology solutions. It is headquartered in Mumbai. Our professionals are domain experts in financial, operational and technology risk management with over a decade of individual experience. Our vision is to be a trusted partner for organizations in systemizing governance and compliance.


Yatish Mamniya

Yatish Mamniya
Yatish is a founding partner at Integrity Matters. He is a graduate of Carnegie Mellon University and Rochester Institute of Technology. He has over 12 years of experience in technology risk management.

Previously, he has been associated in risk consulting roles with Patni, Accenture, Deloitte, EY and TATA Business Support Services. He has served several global clients in BFSI, manufacturing, healthcare, education and energy; both in India and the US. He is a Certified Privacy Professional, Certified in Governance of Enterprise IT and involved with the Data Security Council of India.

Nirav Mamniya

Bhumija Saxena

Bhumija is a co-founder and partner at Integrity Matters. She has over ten years of experience in information technology consulting. She has a masters in business administration from LBS, New Delhi. 

Previously, she has held consulting roles with Ernst & Young and Infosys. She has advised various clients in education, manufacturing, banking, FMCG, and telecommunications sectors. She is an expert in business process solutioning and technology aided enablement, and has managed large client accounts in both India and the US.

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June 1, 2015: IM Point of View: Role of Anti-Fraud Hotlines in Reducing Insurance Fraud. Read our PoV in The Journal of Insurance Institute of India here.

Sep 26, 2014:: Integrity Matters is proud to partner with Economic Times for Fraud and Investigation Summit 2014, on Sep 26th, in Mumbai. Know more at: http://et-fraud-investigation.com/index.php

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