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Role of Whistle-blowers in Exposing Fraud

Who are Whistle-Blowers?

A whistle-blower is defined as someone who has information and proof thereof with regard to illegal or unethical conduct within a company.
There have been a lot of whistle-blowers recorded in history as early as 1777, which happened in the United States of America (USA).

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Who are the Usual Whistle-blowers?

It can be considered that the entire organization may not know the misconduct that is happening within a company but there will always be one person who has the information and knows more or less regarding the unethical doings that are existing in their organization.
Those potential whistle-blowers can be anyone in a company. The following below are some examples of potential whistle-blowers:

  • Accountants handle the bills, invoices, credits, expense reports, ledger accounts, etc. They are the people who see the transactions and their effects on the organization. They see the good and bad transactions happening in the company.
  • Accounts payable and payroll assistants who are responsible for processing invoices, issuing checks, paychecks, deductions, and bonuses have backup documents for those and they have the advantage of seeing questionable records, entries, or items that are not supposed to be included as company activities.
  • Assistants who take care of the paperwork, answer calls, attend executive meetings of the higher-ups, and sometimes even do personal errands of senior employees usually hear or find out about things that are confidential in a sense that they are leaning into the illegal side.
  • Auditors in Dubai who have access to the information or documents of employee that are not available for others to see may discover some things that are not known to or hidden from everyone

Why Don’t They Decide to be Whistle-blowers?

These employees are just some of the potential whistle-blowers in a company who are processing or reviewing a lot of paperwork as part of their job. Some employees can simply receive bits of information with regard to the fraud that’s being done in an organization from different people that will eventually turn into the whole fraud situation.
There can be a number of reasons why employees would stay quiet or turn a blind eye when it comes to fraud schemes that are right in front of them.

Read more: Fraud in the UAE: Forensic Accounting and Certified Fraud Examiner

Reasons why employees step back from being whistle-blowers

  • Whistle-blower hotline is not available for employees to contact when they have proper and strong evidence of fraud in the company.
  • Threats by the management, may it be subtle or not, are received by potential whistle-blowers more often than not.
  • There might be a previous whistle-blower who was fired or treated badly by the management that arouses fear with the potential whistle-blowers to ever say anything about their company. They fear the consequences that they might experience in taking the risk to report the unethical behaviour that is happening in their organization.
  • The potential whistle-blowers might have a well-known poor behaviour inside the company that others obviously know, making them a little conscious of not wanting to be called hypocrites.

There are whistle-blowing laws in other countries that protect and even reward the whistle-blowers in giving information with regard to wrongdoings and fraud happening in a company. In the United Arab Emirates, however, such law is not yet regulated to protect employees from whistle-blowing actions.

Mohamed Ali Farahat has worked on various forensic accounting assignments, which include operational and financial audits, reconstruction of accounting statements, financial information analysis, and investigation of fraud and financial distress. Read more