12/3/2013
EVERY CHOICE HAS A
CONSEQUENCE
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The Integral Model
OBJECTIVE
SUBJECTIVE
I
Intentions
N
D
I
V
I
D
U
A
L
•
•
•
•
•
•
Values
Attitudes
Commitment
Responsibility
Experience
M d
Mood
•
•
•
•
•
•
•
Shared Values
Ethics
Morals
Myths & Legends
Justice
Fairness
Covenants
Behavior
•
•
•
•
•
Plans
Actions
Observations
Facts
Performance
•
•
•
•
•
•
Organizational
Structures
Work Processes
Policies & Procedures
Economics
Contracts
Culture
G
R
O
U
P
Systems
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The Integral Model
Individual
Intentions - Behavior
OBJECTIVE
SUBJECTIVE
I
Intentions
N
D
I
V
I
D
U
A
L
•
•
•
•
•
•
Values
Attitudes
Commitment
Responsibility
Experience
Mood
•
•
•
•
•
•
•
Shared Values
Ethics
Morals
Myths & Legends
Justice
Fairness
Covenants
Behavior
• Plans
• Actions
• Observations
• Facts
• Performance
Culture
G
R
O
U
P
Systems
•
•
•
•
•
•
Organizational
Structures
Work Processes
Policies & Procedures
Economics
Contracts
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1
12/3/2013
What do these three people have in common?
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2
12/3/2013
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3
12/3/2013
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EVERY CHOICE HAS A
CONSEQUENCE
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12/3/2013
Individual
Intentions - Behavior
“The Story”
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WHAT CAUSES AN OTHERWISE
“HONEST
HONEST”” PERSON
DO DISHONEST
THINGS?
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THE THREE COMPONENTS OF
ETHICAL LAPSES
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12/3/2013
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Need
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Need
Opportunity
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6
12/3/2013
Need
Rationalization
Opportunity
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Need
Rationalization
Remove One Component and the
Ethical Lapse Fails
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Reality Check
7
12/3/2013
OBJECTIVE
SUBJECTIVE
I
Intentions
N
D
I
V
I
D
U
A
L
•
•
•
•
•
•
Values
Attitudes
Commitment
Responsibility
Experience
Mood
•
•
•
•
•
•
•
Shared Values
Ethics
Morals
Myths & Legends
Justice
Fairness
Covenants
Behavior
•
•
•
•
•
Plans
Actions
Observations
Facts
Performance
•
•
•
•
•
•
Organizational
Structures
Work Processes
Policies & Procedures
Economics
Contracts
Need
Culture
G
R
O
U
P
Systems
Text Questions to 828.244.1400
FACTS:
• In 81% of cases, the fraudster displayed one or more
behavioral red flags that are often associated with
fraudulent conduct. Living beyond means (36% of
cases), financial difficulties (27%), unusually close
association with vendors or customers (19%) and
excessive control issues (18%) were the most commonly
observed behavioral warning signs.
• Perpetrators with higher levels of authority tend to
cause much larger losses. The median loss among
frauds committed by owner/executives was $573,000, the
median loss caused by managers was $180,000 and the
median loss caused by employees was $60,000.
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FACTS:
• The vast majority (77%) of all frauds in the ACFE
study were committed by individuals working in one
of six departments: accounting, operations, sales,
executive/upper management, customer service and
purchasing. This distribution was very similar to what we
found in our 2010 study.
study
• The longer a perpetrator has worked for an
organization, the higher fraud losses tend to be.
Perpetrators with more than ten years of experience at the
victim organization caused a median loss of $229,000. By
comparison, the median loss caused by perpetrators who
committed fraud in their first year on the job was only
$25,000.
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12/3/2013
Initial Detection of Unethical Practices and
Frauds
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EVERY CHOICE HAS A
CONSEQUENCE
Questions?
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