Who is Responsible for Finding Fraud?

The responsibility for finding fraud is a highly debated topic and one I enjoy discussing with different groups because most individuals have a lot of passion and emotions wrapped up in their perspectives and opinions. I can’t believe that I haven’t written about this topic before, and it’s funny that it took a swarm of bees to inspire me to do so. 

Over the weekend, my neighbor found a swarm of bees in one of his shrubs and called a local beekeeper for help. I hung out with the beekeeper as he prepared the bees for transportation. I noticed very quickly that this local beekeeper and my uncle, who is also a beekeeper, share a love for teaching others about bees and their unique behaviors.

The swarm had landed on the branch of a crepe myrtle and had already started building a comb to store honey. It is amazing how much they accomplished in less than 24 hours. The beekeeper cut the crepe myrtle branch and placed it over a wooden box. He broke off the largest part of the comb, which dropped into the box along with a bunch of bees, which probably included the queen as well. The next part of the process involved a lot of waiting, but this allowed me to learn from the beekeeper. We were waiting for the rest of the bees to get their bearings and move into the box with their queen. Within 30 minutes, the majority of the bees were in the box. He screwed on the top, loaded the box into the back of his truck, and drove off with his precious cargo.

Bees are very interesting creatures. We can learn some important lessons about teamwork from them that can help us achieve success. There are three different types of bees— queens, drones, and workers—and they all have specific jobs vital to maintaining a healthy hive. When you think of bees, you probably think their main goal is to produce honey, but honey is only a byproduct. Their main goal is survival, and they all work together every minute of every day to accomplish this goal.

So, how does this concept of teamwork translate to fraud in our business worlds? When it comes to finding fraud, there are several groups that want to shirk responsibility and place it on the other groups.

I have presented to national, regional, and local audiences on the topic of fraud and consistently I hear distinctly different perspectives about who is responsible for finding fraud and why. From people working for an entity (e.g., an auditee), it is very clear that they want the auditors to find fraud. If fraud is found in an organization, one of the first questions that someone asks is, “Where were the auditors?” On the flip side, I will ask auditors, “Who is responsible for finding fraud?” They respond quickly, “Management.”

Which group is right? They are both right that the other group has some responsibility, but neither group can deny they don’t have any responsibility. We should be like the bees and work together to find fraud. This will create value for your organization through saved costs and enhanced profitability. Next week, I will provide ideas on how each group can be more effective at working together. 

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