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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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Shover and Wright, writing about corporate crime, also advance several rationales for this state of affairs. Although their focus is corporate crime, I suspect many of these motivations apply to occupational fraud as well. They include the fact that the offense may look routine in its initial appearance; victims may be unfamiliar with regard to where to report the offense; and they may have embarrassment, shame, or a sense of feeling “I should have been more careful.”19 Probably compounding this behavior is the fact, as noted by Moore and Mills, that for many decades victims of street crime were also ignored by researchers interested in criminal justice matters.20
If researchers, the courts, and the police could ignore victims of often-violent street crime—victims who had faces and voices and names and injuries—for so many years, is it any wonder that impersonal organizations garnered even less attention? As a consequence of that, could it be that many organizations simply gave up, adding yet another motivation to their already stout list of reasons for underreporting? Moore and Mills, again speaking of corporate fraud, recount several studies that tended to demonstrate that many victims found the official responses to their complaints less than encouraging, to the point where they finally gave up.21 Perhaps not surprising, but again these were people with legitimate complaints of having been swindled. If they encountered resistance and indifference, how does the faceless organization fare? At what point does it, too, give up?
Organizational America also appears reluctant to report other problems as well. The Bureau of Justice Statistics reports that only 44.2 percent of violent victim-
ENVIRONMENTAL AND ORGANIZATIONAL INTELLIGENCE
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izations that occur in the workplace are ever reported to the police. Without such reporting not only is the size of the problem masked, but the police are unable to work with companies to craft more effective deterrence strategies. Stephen Doherty, writing of his experiences in working with companies in Wakefield, Massachusetts to reduce such violence, puts the consequences of this posture as follows:
This failure of businesses to report lower-level incidents and the reluctance of police to aggressively tackle the issue only empowers the perpetrators and diminishes the victims. Ultimately, these unreported smaller incidents are precursors to larger acts of violence. If you don’t deal with the simple assault, you may eventually have to deal with homicide.22
That organizations choose not to report is perhaps not surprising, since organizations are nothing more than collections of people, and they also tend not to report. Richard Titus has observed that while the FBI’s UCRP is arguably the best-known and most-used source of crime data, surveys indicate that fewer than half of all criminal incidents ever get reported to a law enforcement agency.23 Because of such issues, note Jenkins and Braithwaite, they and other researchers into corporate offending rates tend to rely on case studies, absent the availability of better statistics.24
Even schools, which are highly sensitive to issues of personal safety after the events at Columbine and other locations, have imperfect records when it comes to reporting issues and incidents. The National Association of School Resource Officers, representing those police officers who are routinely assigned to schools, is the largest such organization of its kind. In a survey it conducted of 689 members, it found that 99 percent of officers believed their presence made a difference in school safety and 86 percent believed it improved school reporting of incidents. Eighty-four percent, however, believed that in general crimes on school properties are still underreported to the police.25
Issues of organizational reporting will represent a major hurdle for the forensic profession to overcome if it is to move toward greater congruence in defining the size and nature of the problems that confront it. At the same time, the profession is not totally at the mercy of the discretion and motivation of others. David Banks, for example, has written of the promise shown by marrying the concepts of Benford’s Law—a statistical analysis technique developed in the 1930s to attempt to determine if a given distribution of numbers was the product of chance or indicated some sort of human intervention—with the modern powers of computers and automated spreadsheets. At this stage, Banks notes, in the hands of a skilled and experienced forensic investigator, such analytical capabilities may be useful in an increasing number of circumstances to make early assessments as to the possibility of fraudulent activities having taken place.26
It is, admittedly, one thing to be able to look at the activities in one account or series of invoices and make informed judgments as to the likelihood of fraud or
FRAUD EXPOSED
human manipulation being present; it is quite another to be able to look at the financial and quantitative representations of an entire organization and make similar judgments. The developments around the use of Benford’s law in an age of automation may offer promise for those in the field to continue to explore approaches to organizational diagnosis based on experience, statistical analysis, and the increasing power of computers.
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