AICPA Guidance on Fraud Control Should Broaden Use of Whistleblower Hotlines, Says The Network, Inc.

Norcross, Georgia – January 27, 2005

The Network, Inc., a leading national provider of corporate hotlines, has lauded the recent American Institute of Certified Public Accountants’ (AICPA) guidance to Audit Committees on fraud-prevention, saying this should broaden the use of hotlines among both public and non-public entities.

“Not only does the AICPA acknowledge that hotlines are an important tool for combating fraud, but they encourage audit committees of all companies, not just those subject to Sarbanes-Oxley, to cultivate a strong whistleblower program,” said Tony Malone, CEO of The Network.

“The guidelines mention the use of an independent hotline provider as an action to enhance the hotline’s effectiveness as an internal control,” he said.

“The AICPA also suggests publicizing the hotline phone number to stakeholders beyond employees,” said Malone.

Tips are the leading method of detecting corporate fraud, according the Association of Certified Fraud Examiners, whose studies have found that hotlines deliver measurable results by preventing and detecting fraud.

“With comprehensive employee education, hotlines are a powerful tool for preventing fraud. The AICPA has issued a comprehensive checklist for audit committees to use in designing independent hotlines as an effective internal control,” said Malone.