Ethic Lines

Ethic lines are one of the most effective methods in ensuring the effectiveness of the system in the business for preventing errors, frauds and irregularities. Ethic lines are direct communication lines allocated for the purpose of providing information and news. Along with the phone, communication channels such as e-mail are kept open. The more various tools the business has for reporting purposes, the more likely it is to receive important information.

An important point for the effective sustainability of hotlines is confidentiality. No personal information about the notifying person should be given, only a record of his claim should be kept. If the informant gives a name, care should be taken that his identity is not known by anyone. This is because a breach of privacy can pose a variety of problems. Incoming notices may be internal or external. If the reporting organization is an employee, the main thing is the consequences that will affect the employee's decision to conduct. If sharing the situation poses a threat to the employee and there is a violation of confidentiality, the employee may refrain from sharing the situation under these circumstances. Failure to report a significant irregularity will have an impact on the business management's decisions. In this context, the system established on how to apply the hot lines within the organization will also benefit the effectiveness of the internal control system.

According to ACFE, whistle blower lines are at the top of the procedures to be followed at the point of taking fraud prevention measures by businesses. Therefore, establishing communication channels that will enable employees to convey suspected fraud cases to the relevant units through ethic lines is one of the most effective elements in the process of preventing fraud.

Once again, according to ACFE reports, more than 40% of frauds occur with employee reports. In this context, anonymous lines and environment within the company will be an important fraud prevention tool. The employee, who knows that the employee is aware of fraud and that there is a properly functioning communication mechanism, will be less likely to cheat. In the 2020 report of ACFE, it was determined that the most effective and common method in detecting fraud cases is internal audit and ethic lines. The ethic lines established to report fraud increase the number of cases detected with certain clues. Methods such as internal audit and whistle-blower lines facilitate the detection of fraudulent cases, but also have a deterrent nature. According to the ACFE's 2020 report, the most common method used among whistle-blower lines is e-mail. Then, letter, telephone and web-based online forms come in order.