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Internal compliance reporting programs must consider motivations for acting, experts say

Dec 05 2012 Stuart Gittleman, Compliance Complete

Preventing fraud, not just reacting once it occurs, should be the goal of every corporate compliance program, but business has a mixed record in encouraging employees to report suspected misconduct internally, speakers at a Thomson Reuters forum said Tuesday. Preventing fraud and encouraging internal reporting has also been mandatory for public companies since 2002. Among other things, Section 301 of the Sarbanes-Oxley Act requires issuers' audit committees to establish procedures for employees to confidentially and anonymously submit concerns over questionable accounting or auditing matters. And Section 806 of Sarbanes-Oxley generally prohibits issuers from retaliating against employees for raising these concerns. And in 2010 the Dodd-Frank Act directed the Securities and Exchange Commission to establish a program to protect whistleblowers from retaliation and to reward them for voluntarily providing actionable original information that leads to recoveries of $1 million or more for

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