Below is an excerpt from the latest article in Fraud Magazine, "The challenge of the chase: ACFE Board of Regents offer beneficial advice". All five elected regents sat down with Fraud Magazine at the ACFE Global Fraud Conference in June to discuss cyberfraud, technology, global partnerships and lessons learned. Here is one reflection from ACFE Regent Vidya Rajarao, CFE, CA and partner at Grant Thornton India.
Fraud Magazine (FM): One thing we don’t like to talk about are the things that didn’t go right. But we learn from those mistakes more than we learn from our successes. So, would you be willing to share some of the steps you made in the last year or past years that have really helped you in a particular case of how a fraud was working?
Vidya Rajarao: I think not understanding the scope of the problem is the biggest one. Initially you just have tunnel vision. You think it’s a small problem. You don’t realize it’s the tip of the iceberg. And what you’re attacking is just the tip.
FM: So, have you learned that there are no small problems? That you must assume this is the tip of the iceberg?
Rajarao: The challenge, as a practitioner, is I must assume this is not the tip of the iceberg, but then when you talk to clients they don’t want to hear that the problem is an iceberg. They want to contain it, and they believe that it’s just the tip. They want to believe it’s isolated: one rogue employee, one division, that it’s not a companywide problem. So, you need to balance the two. When you’re doing your work you still need be mindful that even though your current mandate is to evaluate the tip of the iceberg you’d be remiss in not telling your client once you have finished there is a larger problem behind the small issue, even though the client doesn’t want to hear that message.
FM: Can you think of an instance when you didn’t do that?
Rajarao: Yes, I can think of instances where I’ve not done that. Either because the client doesn’t want to listen or ... you’re just chasing the next fraud case. You’ve got five other cases, your teams are strained, so you just don’t explain the bigger picture. Five months later, you realize the small fraud is emblematic of a larger organizational issue either because of lack of controls, lack of training or they’ve done an acquisition and haven’t devoted time to transitioning everybody into one level of corporate governance. So, there’s only so much you can handle, and you’re always chasing.