Mummies, Birds, and Fraud

Even though I consider myself an optimist and believe that most people do the right thing most of the time, I recently became a Certified Fraud Examiner. My optimism comes in part from my personal experiences; for example, lost wallets, cash, and even my misplaced wedding ring were all returned or handed over to lost and found. Professionally, as manager of teams such as accounts payable, travel and entertainment expense, and internal audit, I found, with a few exceptions, that people tend to be honest and do the right thing. Unfortunately, increases in a company’s complexity, number of employees, technology-related opportunities, etc. often lead to a higher incidence of fraud. And so, my faith in humanity has had to learn how to coexist with a healthy dose of skepticism.

Fraud, of course, is not a recent invention. I recently read about an excavation of a 2000-year-old Saqqara tomb (https://ib205.tripod.com/ibis_cemetary.html ). As was the custom at the time, pilgrims purchased mummified ibis birds sealed in clay pots to leave as offerings at the tomb. Centuries later, writings discovered on pottery fragments near the tomb related how six workers were caught and imprisoned for selling empty jars for burial. (Thanks to the whistleblower hotline, no doubt). Several thoughts occurred to me as I read this:

1. Kudos to the fraud investigators! Well done!
2. I hope they remediated the issue with controls over segregation of duties and inventory counts.
3. Was there a decline in the population of ibis birds due to their popularity as gifts? (just curious)
4. And lastly (newsflash), history and human nature repeat themselves.

Anecdote aside, recent results from the Kroll Annual Global Fraud Survey show fraud is increasing, with over 82% of companies reporting one or more incidents of fraud. According to Accounting Today, companies lose an estimated 5 percent of their revenue each year due to fraud (https://www.accountingtoday.com/news/organizations-lost-billions-to-fraudsters ). I find that alarming. Regardless of my faith in humanity, I accept that there is a not-unlikely- chance that fraud may be occurring at the company where I work. And the company where you work. And so…I got my CFE certification. Because, unfortunately, fraud investigation and prevention programs are not a luxury.