My dad was an honest man who also happened to be a business executive. While I think that my father was an exceptional person (as we all do, I’m sure), with regard to his honesty, I like to think that he represented the norm—that the Jeffrey Skillings and Bernie Madoffs of the world are the exception and that most CEOs and other senior executives, like most people, are basically honest. But KPMG’s latest white collar crime study shows that even if most executives are honest, the dishonest among them account for the largest chunk of the problem. Put another way, while the typical executive may not be a swindler, the typical swindler is in management, especially senior management. Staff cause the problem only 18 percent of the time.
The reason for this is obvious. Executives have the access to financial assets, and ironically, they are the ones whom everyone else, including security, tends to trust most and watch least. Weak internal controls were exploited in 74 percent of the cases (spanning 69 countries) that KPMG examined. In 50 percent of those cases, red flags (such as missing documents or complaints from suppliers) were ignored.
(To continue reading "Who’s Really Stealing Company Assets?," from the August 2011 issue of Security Management, please click here)
photo by mwiththeat from flickr