4 Ways to Protect Your Company’s Pot of Gold

AUTHOR'S POST

Mandy Moody, CFE
ACFE Content Manager

Don’t worry; I’m not going to go all Lucky Charms on you this St. Patrick’s Day and toss out a bunch of thinly veiled Irish puns. You would only be so lucky…sorry, I couldn’t resist.

But, I did want to take this opportunity to remind you about the cost of fraud to your organization and how to add four easy best practices that will help protect your company’s hard-earned pot of gold. Organizations worldwide lose an estimated 5 percent of their annual revenues to fraud, according to the ACFE’s 2016 Report to the Nations on Occupational Fraud and Abuse. A single instance of fraud can be devastating: the median loss per fraud case was $145,000, and more than a fifth of the cases involved losses of at least $1 million.

The good news? There are some basic steps your organization can take to lessen your vulnerability to fraud:

1. Adopt a Code of Ethics.
Be proactive in setting a tone for management and employees. Evaluate your internal controls for effectiveness and identify areas of the business that are vulnerable to fraud.

2. Establish Hiring Procedures.
When hiring staff, conduct thorough background investigations. Check educational, credit and employment history (as permitted by law), as well as references.

3. Implement a Fraud Hotline.
Fraud is still most likely to be detected by a tip. Providing an anonymous reporting system for your employees, contractors and clients will help uncover more fraud.

4. Increase the Perception of Detection.
Communicate regularly to staff about anti-fraud policies, ways to report suspicions of misconduct, and the potential consequences (including termination and prosecution) of fraudulent behavior.

Implementing these tips could help prevent your organization from becoming a statistic, and help keep your pot of gold safe and secure. I leave you with this Irish blessing: “Here’s to you and yours, And to mine and ours, And if mine and ours ever come across you and yours, I hope you and yours will do as much for mine and ours as mine and ours have done for you and yours!” Cheers, everyone!

Living By a Code as You Travel Down the Road

FROM THE PRESIDENT AND CEO

James D. Ratley, CFE
ACFE President and CEO

“You who are on the road, must have a code that you can live by …” We’re all on the road, and it sure makes the journey more bearable if we have a set of directions we can tack on the wall. (That opening line from Graham Nash’s “Teach Your Children” has helped a few parents through the years.)

CFEs have a Code of Ethics — it’s good for us to occasionally pull it out and remind ourselves that “Certified Fraud Examiners shall, at all times, demonstrate a commitment to professionalism and diligence in the performance of his or her duties.” That list reminds us — especially when we feel we’re rolling that stone up the mountain again — that our good efforts aren’t for naught.

The FBI has a list of Core Values that its employees pledge to follow. Those values include: respect for the dignity of those they protect, compassion, fairness and uncompromising personal and institutional integrity. 

Louis Freeh, when he was the bureau’s director, helped write that code because he wanted his people to be just and compassionate. “We who enforce the law must not merely obey it,” Freeh wrote in a message to his employees when he issued the code. “We have an obligation to set a moral example, which those whom we protect can follow. … [T]hese core values are the fiber, which holds together the vitality of our institution.”

When you read the the latest Fraud Magazine cover article on Freeh, you’ll see that he quietly tries to obey the FBI’s code even now as he runs his investigative firm. A married father of six, he still works to keep his wife and six children the top priorities in his life even though his job schedule hasn’t abated. I’m impressed that he’s been able to blend his law enforcement career with raising a large family.

[Freeh will be a keynote speaker at the 25th Annual ACFE Global Fraud Conference along with Peter Eigen, founder of Transparency International; Martin Kenney, international asset recovery expert; and cyber-security expert Marc Goodman.]

Living by a code — it’s indispensable for CFEs as they travel down the road.  

Find more insight at Fraud-Magazine.com.

Note to Self: Today, Be Ethical

GUEST BLOGGER

Mark Scott, J.D., CFE
ACFE Research Specialist

Most of us don’t want to believe that we’re lacking in ethics. It may be assumed that we, anti-fraud professionals, are all ethical because of the work we are in. We hope that when situations arise regarding making an ethical decision, big or small, we will always make the right choice. We are problem solvers and truth seekers; ethics is just part of who we are. But, just like everyone else, we sometimes find ourselves in situations that aren’t always black and white.

Pitfalls that we have seen in the news and even at our companies and hypothetical situations provide a valuable foundation for our new ethics course, Common Ethical Lapses by CFE. Yes, even CFEs have ethical lapses and face difficult decisions in which they need training and education to solve. We sought to create a course that would serve as a tool to help you engage with, reflect on, and learn from common circumstances that lead to ethical lapses in judgment by CFEs and difficult ethical problems CFEs face from time to time during their careers.

The course seeks to teach CFEs about ethics by:

• Telling stories of ethical misconduct by CFEs
• Using visual storytelling techniques to provide engaging scenarios, assessments and interactive exercises
• Using real-world-inspired cases to bridge the gap between ethics rules and daily life
• Making learners reason through ethical situations where the ACFE Code of Ethics does not provide clear guidance
• Using images, videos and other digital displays to help explain ideas, concepts or statements
• Including relevant expert-level content on a variety of ethics topics

In short, this new two-hour course uses technology to provide interactive, media-rich materials that expose learners to some of the common ethical issues and dilemmas confronting today's CFEs.