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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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• Tests should be validated in accordance with the Equal Employment Opportunity Commission’s Uniform Guidelines on Employee Selection Procedures.
In thinking about selection systems and issues of organizational membership, we may be tempted to move toward the extremes, but I counsel against it. We may be concerned about the complexity, the time and expense, the potential liabilities, and adopt a fatalistic attitude: “If it’s going to happen, it’s going to happen; we’ll get through it.” Others may tend toward the other end of the spectrum and decide that they are going to have a world-class, ultra-sophisticated, bulletproof selection system that will screen out all evildoers, thus eliminating all risk. I think both positions are wrong.
The first is an invitation to disaster—you might as well leave your front door open when you go on vacation and leave the keys in the car ignition so you will always know where they are. It is unfortunate, but in life the vulnerable tend to get victimized. The second position is more realistic, to the point of being unrealistic. It is impossible, and terribly expensive, to try to eliminate all risk. Sensitive governmental agencies with vast powers (e.g., the Central Intelligence Agency, the Federal Bureau of Investigation, and the National Security Agency) have employees go bad. It is doubtful the average organization can throw up more effective entry screens than they can. The point I am driving at is that security and risk mitigation are relative things.
No matter how many alarm systems you put on your house, a skilled thief can defeat them. The point is not to be impenetrable—it is expensive and usually a waste of time. The point is to be harder than the average target. People who are intent on committing occupational fraud usually have nothing personal against you or your organization; they just want to steal money. If it is harder to do that at your organization, they have one of two choices: keep trying and see where they get or go somewhere else where the controls are weaker. That, in my view, is a balanced and rational perspective on security, financial controls, and selection systems. Should you be inclined to accept all or at least part of Gottfredson
and Hirschi’s general theory of crime, they contend that it is simple and opportunistic. Making the commission of workplace fraud more difficult in your organization removes it from the category of simple and, thus, reduces the opportunity. You can never eliminate it entirely (please remember Leuci’s notorious 5 percent), but you can reduce its incidence.
We must also examine the concept of quality of life within the context of the organization. My co-worker who leaves the lunchroom a mess certainly affects my quality of life, but does the co-worker who routinely pads his or her expense account? Must the transgression be so large as to affect the financial health of my employer for it to have meaning to me, or will another standard suffice? If so, how do we determine what it is? If I, too, believe the organization has done me wrong, do I have a higher tolerance for those who decide fraud is an appropriate response in their case?
Law enforcement may offer a stark example to issues we wish to deal with regarding quality of life in an organizational setting, but William Bratton’s recounting of his experiences as Commissioner of the New York Transit Police may be instructive. Shortly after becoming Commissioner of the Transit Police, he initiated a campaign to deal with fare-beaters—those who entered the subways without paying a fare, at the time $1.15. It was estimated there were 170,000 instances of this per day, these actions alone costing the city in excess of $80 million per year, much less the crime and mayhem such persons caused once on the trains.
One of the tactics Bratton installed was a “Bust Bus,” a specially refitted city bus that was essentially a courtroom and holding pen on wheels. Parked in front of subway stops, handcuffed prisoners were led there to be processed, fingerprinted, and booked. This attention to a problem that had been a continuing source of irritation to millions of New Yorkers did not go unnoticed. Bratton recounts the experience as follows:
The sidewalk was cordoned off, as the arrest-processing activity continued. Civilians know what’s up when they turn the corner and all these cops are standing around; they’re both drawn to it and kept away. The more assertive ones saunter over. “What’s going on?” It was clearly a crime scene. Prisoners in handcuffs snaked in a long line from the nearby station onto the bus. An officer stood on each side of the door.
An old woman pulling a wire shopping cart read the lettering on the bus: Arrest Processing Center. ‘A jail on wheels!” she exclaimed. “Why don’t you bring that on up to my neighborhood? You can lock ’em up all day!”
And so crime, disorder and fare evasion began to go down.... We had reduced fare evasion, motivated the cops, streamlined the arrest process, and increased police productivity; we had involved the public, increased their attention, and won their approval; we had controlled disorder and achieved a decrease in crime. All for arresting people for a buck-fifteen crime. We were proving the Broken Windows theory.17
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