Internal Control/Anti-Fraud Program Design for the Small Business: A Guide for Companies NOT Subject to the Sarbanes-Oxley Act

CHAPTER 2 Foundational Policies The Fraud Policy

IT WAS A LATE AFTERNOON in the summer of 1998, and I was ready to get home to my family. The courtroom was relatively full because the trial involved a local woman with many friends. I knew I had done a great job of putting the forensic case together and testifying. All that was left were jury deliberations, the rendering of a guilty verdict, and then I could leave with my chest puffed out and my head held high. In retrospect, I should have remembered that pride comes before a fall. Eventually, the jury returned after taking much longer than anticipated in their deliberations. “Oh well,” I thought. “I won’t get home as early as I thought, but at least I’ll have the full weekend to rest.” The judge called for the verdict from the jury foreman. “We, the jury, find the defendant not guilty.”

“What? How could this be?” I thought, exasperated. It was obvious from the gasps in the courtroom that I wasn’t the only one who felt this way. I knew the defendant was guilty of fraud. The gallery knew, the judge knew, the attorneys knew, and, dare I say, even the defendant knew she was guilty. After the courtroom was cleared, I inquired of a juror how they could have possibly reached this verdict. “Mr. Dawson, the company never told her that it was wrong to steal.”

FOUNDATIONAL POLICIES

I have come to the conclusion that there are certain ...