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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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As we saw with regard to law enforcement, we must be wary of a mentality of regulation of occupational fraud, for this is a de facto acceptance of the “root cause” philosophy that dominated law enforcement in the United States for a good part of the twentieth century. In a perverse way, “root cause” perceptions and benchmarks work to reinforce each other, with the result that regulation of the problem toward the benchmark number becomes an acceptable response.
So, too, should we be careful about crises. Again, in the law enforcement experience, the occasional crisis, properly responded to and addressed, allows us the unintended consequence of returning to the comfort of our benchmark (read, normal) level of organizational dysfunction. This is not to suggest that the only acceptable measure of organizational success regarding occupational fraud is zero. We have seen, through the prism of law enforcement activities and policies of social regulation, the perverse consequences of zero tolerance campaigns. Enough five-year-old children being suspended from kindergarten for kissing other five-year-old children has perhaps awakened us to how rigid and unfeeling a number zero really is.
Yet, at the same time, does this mean that 6 percent is our ultimate goal, primarily because it is the only number we have? I think not, unless we are willing as a society to accept that the groundbreaking work done by the ACFE is as far as we need to go in looking at a $600 billion annual problem.
Such tacit acceptance of reality may be reinforced by the motives of many actors with a stake in the outcomes, not totally unlike the operation of political theory or, perhaps more accurately, political theology. Yuval Levin, in his review of Heaven on Earth, by Joshua Muravchik, a critique of the course of socialist theory around the world, notes that while socialism frequently resulted in poor economic performance and resultant poverty for hundreds of millions of people, it prospered as a political theory. Indeed, by 1985 almost two-thirds of the
FRAUD EXPOSED
world’s population in 70 countries lived under such regimes, often because of the appeal of its “Marxist” origins or the sheer ruthlessness of certain political leaders.23
The concept of political theory and its ability to serve the needs of some in the face of its failures for the many is indeed high drama when compared to the more mundane concerns of occupational fraud, but such observations can be instructive in understanding that much operating theory can not only survive, but prosper, in the face of objective failure.
I believe much of the resistance we encounter is because we routinely offer more of the same. Like our colleagues in law enforcement, we can argue, usually with quantitative support, that more of us equals more cases, investigations, recoveries, and so on, but, in an era of corporate and organizational downsizing, meeting analysts’ expectations, and focus on quarterly earnings, we are talking ones and twos when the big guys are focused on tens and twenties. Ten more investigators or auditors may pay for themselves in the first year, with a little luck, but their impact on the revered bottom line is negligible. To get attention, we need to put before them the so-called magic bullet, the item that is going to improve the bottom line by that magic 3 percent.
Can this be done? I do not know, but I strongly believe it cannot be achieved through our present efforts, no matter how noble and strenuous they may be.24 We cannot offer more of the same and expect any different reception than we have experienced several hundred times in the past.
As a child in the late 1940s and early 1950s, the scourge of my childhood was polio. It was a lurking evil monster that snatched victims away without rhyme or mercy and caused many parents sleepless nights. The medical community responded. Doctors and nurses and technicians tended those stricken and iron lungs were featured on posters and stamps as the best modern technology could offer to those afflicted. Yet the answer to this plague did not come in the form of more doctors and nurses, or in the form of an improved iron lung. It came, instead, from the hands and mind of Dr. Jonas Salk, who produced a vaccine that made the disease ineffective in attacking its human targets.
If we, as a profession, are to achieve breakthroughs of this magnitude we, too, must look toward the laboratories and not the wards. The wards, like our case folders, are full of battles already lost. We can and should deal with them, but the answers do not lie there. The answers, if there are answers, will be found in our collective experience and our willingness to look outside the normal scope of our everyday activities. Dr. James D. Watson, the co-founder of the double-helix theory of DNA research, has observed that intuition, conjecture, and experience have useful and appropriate roles in the development of even scientific theories, noting in an interview: “I think you have to speculate. If I have a good idea, I tend to believe it’s true. An idea is better than no idea . . . that’s the way good science works. An idea can be tested, whereas if you have no idea, nothing can be tested and you don’t understand anything.”25
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