My opinion (and experiences) lead me to the following:
With all the publicity the bad guys get, the time some of them get on the podium (in front of university, accounting, and even fraud investigation organizations—go figure), along with the undeterred and incessant Ponzi schemes, and the roster of “name” companies publicized as suffering fraud (and the larger fraud impacts against and within government)…one could surmise that there is an epidemic being foisted upon business. Add in cyber crime, identity theft, phishing, and all the other fraud-related monikers we have to deal with, and it feels like a tidal wave of theft.
In reality, fraud is just a business problem, another cost of doing business…that’s all. And that’s how we should be dealing with it: as a problem to be solved, minimized, addressed, fixed…and the culprits too.
We have data that indicates the best sources of uncovering fraud, in priority order. We know the likely places, how long it goes on before it gets caught, and case studies give us lessons-learned across-the-board. We’ve all likely identified controls and best practices within our businesses, moved to highly-effective systems, added and exploited the top-notch people we have hired for our organizations, and developed first-class business processes. We know how things are supposed to work, what results to expect, when something goes awry…and bad guys do get caught.
But what happens first:
- weaknesses get exposed,
- money gets saved,
- cash flow accelerates,
- business processes become world-class, and,
- we learn our businesses very well.
In our recurring and specialized business efforts, we find unproductive processes, capital, and people—uncovering waste and dumb things, before we ever find fraud and crime, and those experiences occur all of the time.
So, fraud is just another business problem to deal with, to minimize. It may just be time we treat it as such, instead of some external monolith that gets “done to us” as victims. If we are the victims of anything, it just may be from acting like one.