NCJ Number
198759
Journal
White Paper Volume: 17 Issue: 1 Dated: January/February 2003 Pages: 11-13
Date Published
January 2003
Length
3 pages
Annotation
This article discusses pictorial representations of employee fraud cases.
Abstract
Discussing the importance of internal controls and monitoring of employees, the author describes the use of an illustration depicting an oval inside a square, designed to show internal control structures imposed by managers with the square representing what employees really do. Arguing that managers invariably establish policies and procedures to have a company’s resources safeguarded from loss and that employees tend to make expenditures for authorized purposes only, the author contends that managers blindly trust their employees to do what they tell them to do, but often do not monitor their progress. After establishing that employees often commit fraud because they are easily tempted and put at risk in a dysfunctional internal control environment, the author argues that managers are often shocked when a reviewer is caught because he or she thinks that internal controls on the doer were adequate enough to prevent a company’s assets from loss. Returning to the oval-square illustration, the author suggests that the amount of loss due to fraud is directly related to the length of time it takes management to determine that the square, or negative employee behavior, exists. The author concludes that the oval-square illustration may enable managers to quickly analyze fraud cases.