Hotlines – an integral part of a fraud prevention programme
Used correctly, a hotline can be a key component of an organisation’s fraud prevention programme. In basic terms, a fraud or ethics hotline, also known as a whistle blowing mechanism, is a tool used by an entity or group of entities – whether in the private or the public sector - in the fight against fraud, corruption and/or unethical behaviour in or against the entity or group.
In some countries, hotlines have long been mandatory for certain types of entities. In terms of section 159 of the new Companies Act, some form of confidential reporting mechanism is now required for public and state-owned companies so that if someone wants to make a disclosure, they are protected. Those protected in terms of section 159 are far wider than employees, as defined by the Protected Disclosure Act 26 of 2000, and now include shareholders, directors, company secretaries and prescribed officers.
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