For many years, the business community has assessed and managed the risk of financial fraud within, by, or against organizations using numbers, matrices, and charts. As this book illustrates, these matters also require an understanding of what influences behaviors that result in financial fraud—if you will, the human element of fraud. Knowing this, management can train its workforce to understand and recognize potentially fraudulent behavior when it happens. This training, combined with appropriate reporting processes and mechanisms, will allow for the recognition and reporting of fraudulent behavior on a real-time basis by rank-and-file employees and can substantially reduce losses caused by financial fraud.
Working as a professional in the corporate fraud prevention, detection, and response area, I have participated in sophisticated approaches to financial fraud risk identification and evaluation. In some cases, the work was dominated by stakeholder brainstorming, theoretical discussions, industry comparisons, and database analyses. They were highly technical exercises dominated by specialists. The results were documented using heat maps, massive spreadsheets, and professional jargon. Rarely were the triggering events, specifics of the deceptive acts, and prevention mechanisms effectively communicated to the entire workforce in an effort to reduce fraud risk.
Now consider the complexities added by recent federal oversight. Legislation like the Sarbanes-Oxley and Dodd-Frank ...