The effectiveness of whistleblowing in prevention and detection of employee frauds

Since cheats are planned and organized and carried out consciously, they are difficult to detect. Fraud is a set of irregular and unlawful acts characterized by intentional deception, generally because the perpetrators aim to obtain benefits for themselves or a group. Internal and external reporting is important to reveal fraud and employee fraud, to create a corporate ethical culture against the risk of fraud, and to create fraud awareness among employees. Reporting is the reporting of unethical and illegal behavior and actions to places or people who have the authority to solve this problem. Institutional whistleblowing occurs when a person reports misconduct, such as financial abuse or discrimination, in an organization. Whistleblowing can be seen as a difficult issue in terms of ethical discussions. It often brings two moral values, justice and loyalty, into conflict. On the one hand, doing what is fair and right (i.e., talking about fraud) can sometimes conflict with loyalty (i.e., working for an organization for many years). Whistleblowing is also seen as a breach of trust among employees. A whistleblower system is a set of policies, regulations, procedures, practices, facilities and infrastructure provided and organized by the organization for the responsible and transparent processing of whistleblowing information from employees for the early detection and handling of fraud incidents. The whistleblower system is part of internal control. Optimal implementation of internal control can detect signs of fraudulent practices early. Organizations should value internal training and strengthen internal communication and encourage employees or members to report. Organizations must have procedures that provide real protection in terms of reporting procedures that protect the identity of whistleblowers, prevent retaliation and intimidation, and do not harm future career development. The institution must create confidence that the whistleblower will not be harmed and that fraud sanctions will be applied. In this study, strengthening the belonging of individuals to the institution within the corporate ethical culture in preventing and detecting employee fraud, determining the effect and importance of the reporting mechanism, strengthening this perception by creating effective anti-cheat policies, programs and controls, strengthening the corporate ethical culture, and improving fraud-related reporting processes. Ways and methods to make it secure and therefore to expand the scope of the reporting mechanism have been put forward. Keywords: Cheating, Accounting, Employee Fraud, Whistleblowing