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Fraud Exprosed Whot you Dont Could Cost your company millions - Joseph W.

Joseph W. Fraud Exprosed Whot you Dont Could Cost your company millions - Wiley Publishing, 2003. - 289 p.
ISBN: 0-471-27475-5
Download (direct link): fraudexposedwhatyoudont2003.pdf
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We can learn from the UCRP and its successes and failures along the way. We can also adopt a much more narrow range of offenses we wish to track. Since we are dealing with occupational fraud, we have an inherent advantage, in that we already have substantial amounts of personal data (e.g., age, sex, education, length of service) available to us, since the perpetrators here are, by definition, our own employees. We will have to deal with the issue of standard reporting formats, but this again is a much easier task than that faced by the UCRP, with 17,000 reporting agencies. We will have to make some tough and sometimes subtle decisions with regard to issues of compromise of intellectual property and computer crimes, but this must be done, as both become issues of greater and greater import to us and our profession on a daily basis. We need a central rulemaking body to set definitions, collect data, perform analysis, and issue reports.
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Henry, in his history of the Compstat program, has commented on its utility for the field of corporate and private security and has set forth his thoughts on the demands of such a system if it is to be of maximum value to the organization. While he notes such systems must be capable of answering the classic, “who, what, why, when, where” array of questions for significant effectiveness, a typology of offenses or conditions must be developed and appropriate training provided in the proper use of the system.13
One effort in this direction, albeit much broader in scope, was made in 1995 by the National Fraud Investigation Center. In 1995, with input from law enforcement agencies and professional groups, it attempted to create a system of Fraud Identification Codes to better capture fraud data. By its conclusion, the project had identified over 600 types of fraud and concluded that some system of this type was vital to gaining an understanding of the true extent of these problems.14
These observations are well taken. The FIC concept is interesting but obviously designed to capture a broad range of economic offenses well beyond occupational fraud. These include banking, credit cards, health care, insurance, securities, telecommunications, intellectual property and computer crime, and identity theft.15 Further, as the National Fraud Center indicates, there are still significant issues to be dealt with in regard to reporting mandates and incentives. We should note also that in the list of areas the FIC seeks to address, occupational fraud is not among them. This is not a fault of the FIC or its sponsors; they were simply looking at a huge problem—economic crime—from a different angle.
We might also be well served by looking closely at the work being done by the Ethics Officer Association (EOA) in its effort to develop an ISO-type standard for ethics and compliance programs that will be usable across industry and national boundaries. In writing about this project, Essrig has raised several issues of definition and the potential relevance of related fields that are highly similar to what we encounter when we begin to think systematically about occupational fraud. Perhaps the EOA and its affiliated organizations and institutions can provide us with some valuable guidance from their experiences in this regard. Other organizations of potential value in such efforts include, at a minimum:16
• The Ethics Resource Center
• The Institute For Global Ethics
• International Business Ethics Institute
• European Institute For Business Ethics
• Lockheed Martin Corporation, Corporate Ethics Online Information
• KPMG Business Ethics
• The Institute for Applied and Professional Ethics
• Illinois Institute of Technology, Center for the Study of Ethics in the Professions, Codes of Ethics Online Project
It may be that our greatest challenge will be the reluctance of victim organizations to make reports. In this regard they seem to behave much like individual victims. The National Public Survey on White Collar Crime conducted by the National White Collar Crime Center reported that less than one in ten fraud incidents were reported to a law enforcement agency, and the Ernst & Young LLP— Canada fraud survey found there was a 50 percent drop from those who said they would report a fraud in the workplace and those who actually did file such reports. Likewise, at least with regard to computer incidents, both public and private organizations appear to be similarly silent. Reporting on an FBI survey of public and private organizations, The New York Times reported:
The survey found that about 90 percent of respondents detected computer security attacks in the last year but that only 34 percent reported those attacks to authorities. Many respondents cited the fear of bad publicity about computer security.17
The 2002 Report to the Nation also seems to bear this tendency out. We have seen that larger losses are more likely to be reported to law enforcement authorities than are smaller losses, and that fear of bad publicity, reaching private settlements, and the victim organization’s desire for closure are the most cited reasons for taking no legal action.18
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