Books
in black and white
Main menu
Share a book About us Home
Books
Biology Business Chemistry Computers Culture Economics Fiction Games Guide History Management Mathematical Medicine Mental Fitnes Physics Psychology Scince Sport Technics
Ads

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
Previous << 1 .. 120 121 122 123 124 125 < 126 > 127 128 129 130 131 132 .. 147 >> Next

With occupational fraud accounting for such staggering losses, even the most incremental of reductions would represent a phenomenal rate of return on investment. As we have seen from the experience of law enforcement in reducing crime rates, there is good reason to hope that the reductions will be more than incremental. Given this scenario, it seems the issue is not so much whether to make such an investment, but how best to do it. This consideration should be given careful attention not only by the forensic professionals but also by boards of directors, corporate officers, shareholders, and the investment community. This is not a question of good or evil, or “nice to have, but.” It is a simple and basic question of safeguarding precious corporate assets, protecting shareholder value, and ensuring the financial futures of millions of working Americans.
It may also be useful, particularly from a corporate perspective, to consider the monster that has been lurking in many corporate closets for many, many years— OSHA. The dreaded Occupational Safety and Health Administration has long been pilloried in corporate America for writing needlessly demanding, costly, and strict regulations and enforcing same in a draconian manner to promote worker safety. In November 2000, OSHA “issued the most far-reaching set of work-related rules ever, provoking an immediate barrage of criticism that the new ergonomics regulations are too broad, overly vague, and scientifically unsound,” reports CFO Magazine. The article goes on to note, “In response, more than 60 companies have signed on to overturn the new rules, which take effect January 16 but give businesses until October to comply.”12
FRAUD EXPOSED
OSHA estimates it will only cost businesses $4.5 billion to comply with the new regulations. Business groups counter that the cost will more likely be $18 billion to $126 billion.13 The lower figure is 3 percent of the estimated occupational fraud loss, and the higher one is 21 percent. Unlike OSHAs one-time compliance cost, occupational fraud losses continue year after year.
Visibility
Let’s face it, we in the forensic profession labor in an obscure corner of the vineyard. We are the carefully selected, trusted, highly trained guardians of one of the last great secrets remaining on the face of the earth—the $600 billion, more or less, annual problem nobody knows about.
In New York mob circles there is a saying about “making your bones.” It refers to a long-standing La Cosa Nostra (Mafia, for those not familiar with such matters) rule about becoming a made guy (full member). After passing all the apprenticeship tests, the final chore before becoming made is to kill someone. This is usually not a random killing, but more likely a piece of mob business—knocking off a suspected informer, dealing with a reluctant deadbeat, and so on. In management terms we would refer to these, respectively, as protecting intellectual property and receivables management, but that is another story. Obviously, when one dies the body begins to decompose, finally arriving at the skeleton. Thus the term “making your bones.”
Perhaps we need someone out there, somewhere, to “make their bones” on occupational fraud. You will, I suspect, see more coverage in the next month on child car seats, college athletes’ graduation rates, and tongue piercing than you will see on occupational fraud in a year. In the news business this is called underreporting a story. It is important, but nobody seems to care. Conversely, we are all too familiar with the normal tendency of the press—the pack mentality— when they discover something, they beat it to death.
Michael Kramer has written of the debilitating effect fraud and corruption have on foreign aid provided to third world nations. Some estimates indicate that as much as 40 percent of such aid is siphoned off in the form of bribes, kickbacks, substandard supplies and workmanship, and the like. Such losses are systemic and long term and have the effect of keeping the citizens of those countries in a perpetual state of poverty and of weakening the resolve of contributing nations, who believe their best efforts are being thwarted by the dishonest actions of a few.14
Occupational fraud in the United States is, thankfully, nowhere near the 40 percent level, but if we accept the 6 percent bottom-line figure advanced by the ACFE, it is not insignificant either. How can $600 billion per year disappear from our economy and not have an impact? How many investment opportunities were stunted or lost because of workplace fraud? Until we begin to think about
THE NEXT FIVE YEARS
such issues, I fear far too many people inside and outside of organizations will continue to accept occupational fraud as the cost of doing business.
Perhaps occupational fraud is the media’s dirty little secret. It is, however, a secret with profound public policy implications. Donald Schon wrote many years ago of a concept of “ideas in good currency.”15 In using this term, Schon was speaking to the fact that the public, the government, or an organization can only focus its time and attention on so many things at once. Those items that are on the plate at a given period are “ideas in good currency”: ideas that will receive time, discussion, attention, and resources. With time, some of these ideas will evolve, resolve, or dissolve, to be replaced by others. But without their turn at bat, a truly serious issue like occupational fraud will never receive the truly serious attention it deserves.
Previous << 1 .. 120 121 122 123 124 125 < 126 > 127 128 129 130 131 132 .. 147 >> Next