Internal misconduct can quickly escalate from a simple financial loss to a corporate governance issue addressed at the board level, a risk of regulatory sanctions, and a serious reputational crisis. These risks are further amplified when the misconduct involves senior employees, third-party intermediaries, public sector contact points, or is carried out through collusive transactions that allow perpetrators to circumvent control mechanisms.
The Association of Certified Fraud Examiners ( ACFE )’s 2026 Report to Nations (“ The Report ”) analyzed more than 2,400 cases of corporate fraud investigated in 143 countries and territories between January 2024 and September 2025, and found that the total losses caused by these cases exceeded US$3.4 billion. According to the report, organizations worldwide lose approximately five percent (5%) of their annual revenue due to fraud, resulting in an estimated loss exceeding US$5.5 trillion annually globally.
Regional findings are particularly important for organizations operating in Türkiye. Turkey was the second most represented country in the regional dataset, hosting eight of the seventy-two cases reported from the Eastern Europe and West and Central Asia region. The median loss incurred in the region was recorded at US$170,000, significantly higher than the global median loss of US$104,000. Corruption was detected in 57% of the regional cases, while 53% involved fraud committed in collaboration between perpetrators.
While examples specific to Türkiye are limited, these findings raise an important practical question for legal and compliance teams: can organizations identify and report irregularities to higher authorities, preserve evidence, and address control deficiencies before the irregularity escalates into a broader legal or regulatory problem?
The importance of effective integration programs
The report reveals that the vast majority of abuse cases stem from weaknesses that organizations could reasonably have prevented or mitigated. Deficiencies in internal controls, management's disabling of control mechanisms, and inadequate management oversight account for a significant portion of the cases examined.
Many organizations implement codes of conduct, anti-bribery policies, whistleblowing procedures, and financial controls that appear comprehensive on paper. However, cases of abuse occur when these measures are not properly implemented, tested, or supported by an appropriate culture of accountability. Therefore, the effectiveness of a compliance framework depends not only on its design on paper but also on how consistently it operates in practice.
Controls against fraud risks play a crucial role in mitigating harm from fraud and detecting fraud earlier. However, from a legal perspective, the importance of these controls is not limited solely to fraud prevention. Effective monitoring and properly documented oversight mechanisms are also important in demonstrating that the company has taken the necessary measures to manage its compliance risks. Especially when an irregularity becomes subject to investigation by regulatory or judicial authorities, companies need to be able to demonstrate not only that they have established the necessary policies and procedures, but also that they have effectively implemented and monitored them, and that the relevant mechanisms have been properly operated in the face of suspected breaches or irregularities.
Detection and investigation preparation
The report confirms that early detection significantly reduces both the harm caused by fraud and the duration of its occurrence. The fact that 43% of fraud cases were detected through whistleblowing mechanisms demonstrates that whistleblowing mechanisms remain the most effective detection method. Internal audit, management review, proactive monitoring, and data analytics also play a crucial role in early detection processes.
Therefore, organizations must establish accessible, reliable, and actively encouraged whistleblowing mechanisms with data-driven monitoring systems and transaction analytics, as well as clear procedures to ensure issues are brought to the appropriate decision-making authorities. Notifications must be promptly assessed and forwarded to higher authorities; delays at this stage can jeopardize evidence, increase damage, and limit the organization's ability to respond effectively.
Indicators that may point to a risk of fraud include unusual relationships with suppliers or customers, unexplained accounting adjustments, purchasing transactions that deviate from normal operations, and frequent manual intervention in systems or control mechanisms. However, a significant proportion of those involved in fraud show no prior noticeable signs. Therefore, indicators of fraud should not be considered as criteria to initiate an investigation in isolation, but rather as part of a more comprehensive detection and monitoring mechanism.
One of the factors that makes detecting fraud difficult is when multiple individuals collude to commit or conceal it. The report found that in approximately half of the cases examined, multiple individuals were involved; these cases resulted in greater losses and went undetected for longer periods. Therefore, it is important for companies to assess whether a detected fraud is limited to an isolated act and to investigate whether different business units, individuals at reporting levels, or third parties were also involved.
However, an effective compliance program is not limited to identifying potential irregularities. When suspicion of irregularity arises, internal investigations are critical in determining the manner and extent of the event, assessing legal and regulatory risks, identifying deficiencies in the internal control system, and taking necessary corrective and preventive measures.
This situation underscores the importance of thorough investigative preparation. Companies often lack the luxury of structuring their internal investigative processes only after allegations of breaches have surfaced. Critical decisions, such as preserving evidence, determining the order of interviews, implementing reporting procedures, evaluating possible measures under labor law, and determining whether notification to relevant authorities is necessary, often need to be made within a relatively short timeframe. Clearly established investigative protocols significantly facilitate maintaining the integrity of the process and implementing timely corrective measures.
Independent legal oversight can be particularly important for maintaining the credibility of the investigation when allegations involve senior management, a conflict of interest, points of contact with the public sector, or significant regulatory risk.
Important considerations for companies operating in Türkiye.
Corruption, loopholes in management controls, and third-party risks continue to present practical compliance challenges for organizations operating in Türkiye. These risks are particularly pronounced in sectors that interact heavily with public authorities, such as infrastructure, energy, healthcare, defense, transportation, telecommunications, and public procurement projects.
Allegations concerning these sectors often require measures that go beyond interventions related to employment law. Depending on the circumstances, this may necessitate conducting internal investigations, contacting regulatory or judicial authorities, making contractual notifications, or, in multinational companies, parallel reviews by the group's compliance function.
Although Türkiye does not have a comprehensive corporate criminal liability regime like the Anglo-Saxon legal systems, legal entities can face significant administrative sanctions, risks of being banned from public tenders, and serious reputational damage due to irregularities committed by their employees, managers, or third parties acting on their behalf.
Multinational organizations must also assess the risks that may arise under foreign legislation, including the UK Anti-Bribery Act and the US Foreign Corrupt Practices Act. Even if an act occurs entirely within the borders of Turkey, it may be subject to scrutiny and oversight by foreign authorities if there is a sufficient link in jurisdiction, such as the presence of a foreign parent company, foreign stock exchange listings, international financial arrangements, or cross-border transactions. Therefore, even allegations of violations that at first glance appear to concern only domestic legislation must be assessed from the outset of the process in terms of both Turkish law and relevant foreign or international legislation.
The report's key message is clear: organizations with effective controls, reliable reporting channels, and pre-established investigation protocols are better positioned to detect fraud early, limit losses, and respond effectively to fraud. For companies operating in Türkiye, the periodic review of fraud controls, reporting mechanisms to higher authorities, and investigation preparedness is not only a compliance activity but also a crucial component of legal and corporate risk management.