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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