Managing Fraud Risk: A Practical Guide for Directors and Managers

Introduction

We will return to look further at Mr “X” and his activities in Chapter 9. In the meantime, this incident is a good example of something that I have seen frequently throughout my career, namely a fraudster expressing the view that he or she has done nothing wrong. The conduct of other staff members is often used to justify this stance. Organisations need to be aware of this and to take the time to define clearly what is meant by fraud and other corrupt business practices so that there can be no confusion, genuine or fabricated, in the future.

Inconsistency renders the effective management of risk within an organisation impossible. This general principle applies especially to the specific risk area of fraud. It is important that organisations are precise in what they mean by the term fraud and that they always treat its symptoms in the same way if they are to manage the threats it poses effectively. As noted, in my experience such consistency is often lacking so that the word fraud can mean different things to different people. Sometimes in the modern world of global business this is inevitable as it relates to a jurisdictional point, where the law can provide precise definitions and throws up subtle cross-border differences. These legal differences can prove to be harmful to the prospects of success in cross-border fraud investigations. Sometimes however the differences can be traced back to corporate culture and to behaviours within organisations. Inconsistencies here ...