Dar es Salaam — KPMG Tanzania yesterday launched a whistle-blowing service.
The hotline will enable employees in an organisation to report fraudulent and unethical practices, according to KPMG-Kenya forensic manager Linah Ottichilo.
"An effectively functioning hotline service can significantly improve an organisation's capability to detect fraud."
Risk consultant Augustino Mbogella said according to the 2016 Association of Certified Fraud Examiners report, a typical organisation loses 5 per cent of annual revenue to fraud.
Globally, Mr Mbogella said organisations lose $6.3 billion (Sh14.04 trillion at the current exchange rate) in fraud.
He stated that 23 per cent of cases caused losses of $1 million (about Sh2.2 billion) or so.
He pointed out that median lose per case stood at $150,000 (Sh334.5 million).
"Whistleblowing hotline is a key component of your fraud risk management strategy," noted Mr Mbogella.
"Organisations that have reporting lines are more likely to detect fraud through tips."
According to him, internal audit and management review account for up to 16.5 and 16 per cent respectively. Up to seven and 6.6 are detected by accident and account reconciliation.
Document examination and external audit account for up to 4.2 and 3.8 per cent.
More than 12 per cent of organisations were reportedly providing rewards for whistleblowers.
The report shows that key users of services are employees, customers and anonymous, accounting for 51.5, 17.8 and 14 per cent respectively.
Mwananchi Communications Limited managing director Francis Nanai, who was the chief guest, commended KPMG for the initiative.