Show and Tell – Show is more important, when it comes to….
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All posts for the month August, 2012
From http://costingblog.wvco.com/2012/07/30/the-costing-system-reporting-how-processes-interconnect/
William Vaughn Accounting and Business Consulting-
“….In fact, the establishment of accurate monthly financial statements in compliance with generally accepted accounting principles is the foundation of a good management reporting system.”
“As the CFO and the rest of the management team discussed their job costing and management reporting processes, it became clear to me that they were very sophisticated and very well informed about their manufacturing operations. This is a plus and surprise in an arena where most companies that we see, even Fortune 500 companies, are dealing with fundamental costing issues which call into question the strength of their entire management reporting process. As we left the conversation, I believe it was clear to all parties in the meeting that there were compliance assignments to be undertaken in a timely and accurate way. However, beyond that there were management reporting projects which were equal to or greater in importance which should needed to be dealt with just as quickly and proficiently as the compliance related projects.”
Costing for Profitability
Great post from
“the costing system and reporting- how processes interconnect”
IQ gets in you in the door. EQ And a good Detective know this,
According to Dr. Daniel Coleman, IQ is essential, its a “threshold”. But EQ is more important.
“Emotional Intelligence has to do with Self Mastery, how you handle yourself”, says Dr. Coleman. “As a Leader….it requires Empathy and interaction…it’s the Social Intelligence ability.
In “Corporate Fraud Handbook: Prevention and Detection”, author Joseph T. Wells points out in Chapter 14 “The Big Picture” that “…no one factor alone will deter occupational fraud; we must attack the problem on several fronts.”
“Tone at the Top” Modeling of Behavior starts with the Strongest Influence, e.g. the Boss. While large organizations have Ethics Policies in place, “In small Business – which are much more vulnerable…to asset misappropriations- few of bosses victimized seem to realize the importance of their own personal example.” Telling Customers what they want to hear; fudging on taxes they owe; mismeasuring for advantage,; lying to vendors when they will be paid
Corporate Fraud Handbook: Prevention and Detection, Joseph T. Wells, Joseph Wiley & Sons, April 2011.
Why do People Cheat?
EMOTIONAL “…In short, the move from small infractions to a deliberate pattern of deception of fraud is less an incremental slide than a deliberate strategy. And in most people it takes shape for personal, and often very emotional, reasons, psychololgists say….” – The Psychology of Cheating, Benedict Carey, New York Times, April 16, 2011.
EVERYONE IS DOING IT And “Cheating is contagious”, says cognitive psychologist Dr. David Rettinger of the University of Mary Washington. In his 2009 study published in Research in Higher Education, Dr. Rettinger found that direct knowledge of others cheating, was the biggest predictor of cheating. – “The Human Beast- Why People Cheat”, Dr. Nigel Barber, Psychology Today, May 12, 2011.
GOALS in CONTEXT- “BOUNDED ETHICALITY” Ann Tenbrunsel, a researcher at Notre Dame noted after an experiment with two groups of people, that those instructed to consider a business decision, rather than an ethical decision, were signifcantly more likely to lie given an opportunity. – the business frame cognitvely activated the goal – to be competent, to be successful- and less able to process ethical decision making.
SHORT TERM – WE CARE ABOUT THOSE WE IDENTIFY WITH, not a FUTURE ABSTRACTION
http://www.npr.org/2012/05/01/151764534/psychology-of-fraud-why-good-people-do-bad-things
According to the Association of Certified Fraud Examiner’s (ACFE) 2012 Report to the Nations, on Occupational Fraud and Abuse, surveyed participating members estimate that organizations lose, on average about 5 percent of their revenues to dishonesty, from within.
Key Finding topics included The Impact, Detection, Victims and Perpetrators of Occupation Fraud:
Occupational Fraud is a significant threat to small business.
The smallest Businesses suffered the largest median losses.
Fraud reported lasted a median of 18 months before being detected.
Occupations Fraud is more likely to be detected by a tip than by any other method – the majority of tips reporting fraud coming from employees within the victimized organization.
Perpetrators with higher levels of authority tend to cause much larger losses.
The Majority (77%) of all frauds in study, were committed by individuals working in one of six departments: executive or upper management, sales, accounting, operations, customer service or purchasing.
In large, the fraudster displayed behavioral red flags, including – Excessive Control Issues, Financial Difficulties, Unusually Close – or only – Company relationship customers.
Since the first Report in 1996, the ACFE has released six editions- in 2002, 2004, 2006, 2008, 2010 and the current version in 2012. Each Report is based on case information provided by surveyed Certified Fraud Examiners (CFEs), 2010 – the first report to included cases from outside the United States.
The ACFE is the reported the world’s largest anti-fraud organization and premier provider of anti-fraud training and education, with more than 60,000 members. ACFE’s mission is in part, to reduce business fraud world-wide. Their recent June 2012 conference in Orlando, Florida, featured speakers Michael Woodford, whistleblower and former Olympus Corp.CEO; Pamela Meyer, CFE, best-selling author of “Liespotting” ;
“Ultimately things depend on our motivation…” – the Dalai Lama, Nature of the Mind, April 24, 2009. Univ. of Calif., Santa Barbara.
The Motive, The Method and The Opportunity.
Ultimately, the Fraud Triangle , “Motivation” for Misconduct, relates to an “unshareable need” that arises within a person’s life. It is the area of the Fraud Triangle that an organization has the least control ove, and the most difficult for a compliance officer to assess.
Finding Hidden INcome i a Divorce or Child Support Case
Fraud Triangle – and Motivation –
source http://www.corporatecomplianceinsights.com/incorporating-the-fraud-triangle-into-compliance-risk-assessments-the-motivation-factor/