Exposing Fraud

CHAPTER 3 From Fraud Awareness to ‘Risk’ – A Professional Step

If you are not willing to learn, no one can help you. If you are determined to learn, no one can stop you.

—Anon

  INTRODUCTION

Risk and thinking about risk is about the ability to reason.

In a fraud risk context, are these comments familiar?

• ‘No-one could have seen that coming . . . ’
• ‘We couldn’t have legislated for something like this . . . ’
• ‘The policy isn’t clear.’
• ‘Our system obviously needs upgrading.’
• ‘A strategic review is needed.’

Given that this book, Exposing Fraud is predominantly about fraud investigation, this chapter does not claim to go into extensive volumes regarding risk, but the proportionate inclusion of risk issues is highly important. In fact you cannot have a book about investigating and detecting fraud without it.

There are a huge number of discussions and a range of statements and works on risk. Likewise with IT solutions, risk management systems abound. This chapter however is a lynchpin only between fraud awareness and investigations; a bridging chapter from definitions and concepts of fraud to risk.

Other salient points in this chapter are:

• Risks are not always visible.
• The misconception and misapplication of ‘pseudo stability’ in fraud control policy-making (false and naïve ...