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CORPORATE FRAUD HANDBOOK

Hollinger and Clark believe management must pay attention to four aspects of policy development:

  • 1.

    A clear understanding regarding theft behavior

  • 2.

    Continuous dissemination of positive information reflective of the company’s policies

  • 3.

    Enforcement of sanctions

  • 4.

    Publicizing the sanctions

The researchers sum up their observations:

perhaps the most important overall policy implication that can be drawn . . . is that theft and workplace deviance are in large part a reflection of how management at all levels of the organization is perceived by the employee. Specifically, if the employee is permitted to conclude that his or her contribution to the workplace is not appreciated or that the or- ganization does not seem to care about the theft of its property, we expect to find greater in- volvement. In conclusion, a lowered prevalence of employee theft may be one valuable consequence of a management team that is responsive to the current perceptions and atti- tudes of its workforce.52

THE 2006 REPORT TO THE NATION ON OCCUPATIONAL FRAUD AND ABUSE

In 1993, the Association of Certified Fraud Examiners began a major study of occupa- tional fraud cases with this goal: To classify occupational frauds and abuses by the meth- ods used to commit them. There were other objectives, too. One was to get an idea of how the professionals—the CFEs—view the fraud problems faced by their own compa- nies. After all, they deal with fraud and abuse on a daily basis. Another goal was to gather demographics on the perpetrators: How old are they? How well educated? What percentage of offenders are men? Were there any correlations that we could identify with respect to the offenders? What about the victim companies: How large were they? What industries did they cover? For good measure, we also decided to ask the CFEs to take an educated guess—based on their experience—of how much fraud and abuse occurs within their own organizations.

Beginning in 1993, we distributed a detailed four-page questionnaire to about 10,000 certified fraud examiners, asking them to report to us the details of one fraud case they had investigated. By early 1995, 2,608 surveys had been returned for analysis, including 1,509 usable cases of occupational fraud. Although the survey design was not perfect, the sheer number of responses made it—to our knowledge—the largest such study on this subject to date. Of the cases analyzed, the total was about $15 billion, ranging from a low of $22 to a high of $2.5 billion. From that survey, we developed in 1996 the first Report to the Nation on Occupational Fraud and Abuse. Association President Gil Geis decided that the name “Report to the Nation on Occupational Fraud and Abuse” was a bit long, so he also titled it “The Wells Report.”

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