Psychology of
Fraud
Understanding Gender Bias
and
Applied Interviewing
Psychology
Tommy Seah
ACFE, Regent Emeritus
© 2014 by Tommy Seah
No claim to original Singapore Government works
Printed in the Republic of Singapore on acid‑free pap...
FOREWORD

Dr. Frank LAW,
Chief Inspector of Police, Head,
Cyber Security Centre,
Technology Crime Division,
Commercial Cri...
ACKNOWLEDGEMENTS
All books are, in a way, the work of others….those who
inspired me as a kid, taught me to be a an account...
Kovacich who wrote Fighting Fraud - How to Establish and
Manage an Anti-Fraud Program. The author wishes to
express his de...
Introduction
Crime is a blight on any societies. From Australia to the
United States, Russia to South Africa, Singapore to...
look at the limitations of internal controls. Identify the three
variables of opportunities, motivation and rationalizatio...
CONTENTS

WHAT IS FRAUD
What is the distinction between fraud and Employee
misdemeanor
What would qualify as a fraudulent ...
How to strategically investigate “he said/she said” allegations
where there are no eyewitnesses
WARNING SIGNS FOR FRAUD
Re...
THE 4 STEPS IN ANY INVESTIGATION
What is Fraud
There will always be fraud. If I remember correctly it was
Singapore Minister Mentor Lee Kuan Yew, the then ...
remember that a person is innocent until proven guilty and
the fact that someone maybe being investigated does not
make th...
• Unconscionable dealing; especially contract law, and the
unfair use of the power arising out of the parties’ relative
po...
What is Employee Misconduct?
Most employees perform their jobs competently and
meticulously. Others who do not possess the...
There are two types of employee misconduct; culpable
conduct and non-culpable conduct.
Culpable conduct is blameworthy con...
of his or her job description, and last but not least, proof that
the employee behaved with irresponsible disregard for
po...
This consideration is important because in the U.S. judicial
system today, it generally must be shown that the person
perp...
It may also to help ensure that your employment is not
terminated over such matters. Also remember that “anyone
can sue an...
How is Fraud different from Employee Misconduct
In the earlier chapter, fraud has already been defined as the
intentional ...
When will fraud happen IN your organization. The good
news is that most people who commit fraud are not career
criminals. ...
financial statement as a way to solve his problem. The
financial problem can be personal (too deep in personal
debt) or pr...
by others. In almost every fraud case, the fraudster's
financial problem relates to status-seeking or statusmaintaining. S...
Corruption
A bank Relationship Manager desires prestige symbols such
as a nicer car, better clothes, jewellery, etc., but ...
even though there is an opportunity to steal the funds, there
is no opportunity to steal them in secret. But suppose the
s...
While the perpetrator must rationalize the crime to himself
before he commits the crime, after the act has taken place
the...
secondary interests are not treated as wrong in themselves,
but become objectionable when they are believed to have
greate...
In her testimony last year, Sue denied she had a sexual
relationship with Ng. She painted the picture of a man who
became ...
Overall, the judge said he found Sue's explanation for the
numerous material discrepancies unconvincing.

"The discrepanci...
corroborated by some other evidence."

Ng's testimony 'largely consistent' with evidence

The judge then elaborated on his...
largely consistent with his claim that he was in an intimate
relationship with Ms Sue," he said. He added further that
Ng'...
"On this count alone I found that (Ng) had not only
successfully rebutted the presumption (of corrupt intent) but
had rais...
When Does the Fraud Triangle Not Apply?
The fraud triangle applies to most embezzlers and
occupational fraudsters, but it ...
THE LIMITATIONS OF INTERNAL CONTROLS
What Does the Fraud Triangle Tell Us? Perhaps the most
important lesson to be learned...
organisation's objectives and goals to be met


reports risk management issues and internal controls
deficiencies identif...
misunderstandings, fatigue and stress. Employees are to be
encouraged to take earned vacation time in order to improve
ope...


Errors may arise from misunderstandings of
instructions, mistakes of judgment, fatigue, etc.



Controls that depend o...
Why we must not blame the Internal Auditor for every
fraud
Corporate internal auditors (those who are employees of the
cor...
which they were trained. Frauds are perpetrated by people,
and therefore, one’s anti-fraud training, education, and
experi...
Why do some management thinks that Sanctions Don't
Deter Fraud
We can also deduce from the fraud triangle that simply
puni...
psychological profiles of both sexes in their motivational
needs.
Motivation and Rationalization in fraud is Gender bias.
Financial exploitation, and particularly thefts and scams, are
inc...
Man and woman do not rationalise the same way when it
concerns fraud.
Before entering upon the specific subject, let us – ...
and discriminating on the basis of this belief can be called
gender bias.

Why is there a need for fraud examiners to unde...
and admirable balance between the wear and tear and the
rebuilding of tissues.
In the psychological life, the principle of...
Psychological Differences between Men and Women
The first question which calls for our consideration in this
context conce...
Unfortunately, this kingdom of the home is often troubled by
silent or noisy disharmonies and conflicts which sometimes
sh...
of the emotions and of the imagination, it is the woman who
is usually the better developed, more positive and productive
...
Speaking of man in general, the average so-called normal
man develops qualities and functions such as aggressiveness,
ment...
The Editor

ACFE Regent Emeritus
Tommy Seah, Certified Fraud Examiner
He is the elected Vice Chairman (2005/07) of The Ass...
experience in the Operations Department of a foreign bank.
Tommy Seah is the author of seven banking books including
the F...
compliance review and fraud investigation in the Asia Pacific
Region. He is also a Certified SOX Professional and appointe...
Some of the world’s leading banks and financial institutions
staff trained by Tommy :

• The Government Investment Corpora...
REVIEW
By

JOSEPH R. DERVAES, CFE, ACFE Fellow, CIA
AUDIT MANAGER FOR SPECIAL INVESTIGATIONS
WASHINGTON STATE AUDITOR'S OF...
Psychology of fraud 50 pages for comment by tommy seah number one fraud buster
Psychology of fraud 50 pages for comment by tommy seah number one fraud buster
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Psychology of fraud 50 pages for comment by tommy seah number one fraud buster

  1. 1. Psychology of Fraud Understanding Gender Bias and Applied Interviewing Psychology Tommy Seah ACFE, Regent Emeritus
  2. 2. © 2014 by Tommy Seah No claim to original Singapore Government works Printed in the Republic of Singapore on acid‑free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number‑XX: XXX‑X‑XXXX‑XXXX‑X (Softcover) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint. Except as permitted under Singapore Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to permission to photocopy or use material electronically from this work, please access www.csi-world-hq.org or contact publisher at (65) 91069872 A limited edition published by CSI World Headquarters for its members education. NOT FOR RETAIL SALES
  3. 3. FOREWORD Dr. Frank LAW, Chief Inspector of Police, Head, Cyber Security Centre, Technology Crime Division, Commercial Crime Bureau, Hong Kong Police Force ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ……………………………………………………………………………………………… ….
  4. 4. ACKNOWLEDGEMENTS All books are, in a way, the work of others….those who inspired me as a kid, taught me to be a an accountant, an auditor, a computer science lecturer, a fraud examiner, a writer, a father. Those of you who grew up during the Cold War will remember what it was like to be caught on the wrong side. The nightmares of that time did not happen to me directly but one does wonder if such warnings ensued that indeed such things did not happen at all when I was a involved in the war against fraud. I remember distinctly one of the first lesson learned was a maxim borrowed from an intelligence agency that drilled into us that it is “In Deception, We shall do War”. Their impact on me is obvious with this work, their warnings as real then as the warning of this book the potential reality now. Just in case you are confused, I am talking about the intense psychology exerted upon opposing forces during the Cold War. I am a product of that war and I used that knowledge to write this book. I am hoping that this book which comes in a series, might give the reader some insights into the psychology of fraud. Special thanks must go to early pioneers and researchers Graham Davies and Ray Bull from the University of Leicester, UK who published the authoritative manual on The Psychology of Crime, Policing and Law. I am also deeply indebted to David E. Zulawski and Douglas E. Wicklander who edited Practical Aspects of Interview Interrogation. These folks have been inspirational in my writing, Last but certainly not in the least, I am extremely grateful to Dr. Gerald L.
  5. 5. Kovacich who wrote Fighting Fraud - How to Establish and Manage an Anti-Fraud Program. The author wishes to express his deep appreciation to Dr. Frank Haronian and Dr.Roberto Assagioli, M.D. for their helpful publication on The Psychology of Woman And her Psychosynthesis. I have learned much from all of them. I am particularly indebted to Dr.Frank LAW, Chief Inspector of Police, Head, Cyber Security Centre, Technology Crime Division, Commercial Crime Bureau, Hong Kong Police Force for writing the foreword. I am also grateful to transparency international in its publication Global Corruption barometer 2013, Transparency International is the global civil society organization leading the fight against corruption. through more than 90 chapters worldwide and an international secretariat in Berlin. Transparency International raise awareness of the damaging effects of corruption and work with partners in government, business and civil society to develop and implement effective measures to tackle it. Lastly, a writer cannot function without good editors, publishers, Seminar organizers and Sales agents. Stanley Chia will always stand as one of the best in carrying my books. As for my many friends and supporters who believe in this work, all I can say is thanks.
  6. 6. Introduction Crime is a blight on any societies. From Australia to the United States, Russia to South Africa, Singapore to Argentina, crime has a major impact on how people live their daily lives. Minor crimes such as larceny and petty theft are a nuisance, and while they typically have comparably little economic impact, they create an environment of distrust and suspicion that can poison communities. More serious white-collar crimes such as bribery, extortion, misappropriation of assets and conflict of interests have a more profound impact both on business organization and their communities, leading to fear, hatred and isolation of the alleged perpetrators. Technological advances, for example DNA testing and CCTV, have improved our methods of investigating and prosecuting crime, but despite these advances the majority of forensic investigations and prosecutions still rely on human factors. In this respect forensic investigations and prosecutions have changed little over the past couple of centuries. Investigators still rely on their own conceptualizations of who commits certain crimes to identify potential offenders, eyewitnesses are still integral to most investigations and prosecutions, and a suspect confessing still has a major impact on decisions to convict a suspect. It is in these human factors where psychology has its role. In this book, we outline current, cutting-edge research and its application to investigating and prosecuting offences among white-collar workers. We begin by explaining the nature of fraud. Examine the distinction between fraud and employee misdemeanor. Take a detailed
  7. 7. look at the limitations of internal controls. Identify the three variables of opportunities, motivation and rationalization for fraud. Explain the psychological profile of man and woman. Devote a substantial portion of the book to the interviewing techniques that need to be applied to obtain the truth notwithstanding the gender bias in rationalization in committing fraud. Throughout history, one of the great problems we have faced has been the development of a system by which truth may be made known. Solutions to this problem have ranged from such extremes as the torture chambers of the middle ages to the unhesitating acceptance of the word of a gentleman in the eighteenth century. Neither extreme meets the requirements of today's complicated world. We respect human dignity too much to permit physical and psychological abuse of an individual in the search for truth. Yet we recognize that fraud perpetrators will lie without hesitation, even under oath, if this will further their aims. The truth can be determined only after the evidence has been collected and analyzed. The public should not be misled into thinking that this is an automatic process. Investigative interviewers should use psychology only as the best means available on behalf of society to collect and preserve evidence. The tactics in this book to encourage the cooperation of interviewees are ethical. A primary objective in this book is intended to counteract the often illegal coercive tactics of the past and to promote perceptive interviewing. The maxim to remember when interviewing someone is that : Things can go so wrong when the approach is wrong.
  8. 8. CONTENTS WHAT IS FRAUD What is the distinction between fraud and Employee misdemeanor What would qualify as a fraudulent activity What is Employee Misconduct WHEN WILL FRAUD HAPPEN What factors cause these otherwise normal, law-abiding persons, to commit fraud Conflict of Interest, is it fraud THE LIMITATIONS OF INTERNAL CONTROLS Why we must not blame the Internal Auditor for every fraud Why so some management thinks that Sanctions Don't Deter Fraud Internal control myths and facts Why we must not blame the Internal Auditor for every fraud THE PSYCHOLOGY OF FRAUD FOR MAN AND WOMAN Motivation and Rationalization in fraud is Gender bias. Understanding bias and psychosynthesis Psychological Differences between Men and Women Identifying and understanding the characters of fraudsters INTRODUCTION TO INTERVIEWING TECHNIQUES Interviewing Techniques Finding the truth ethically
  9. 9. How to strategically investigate “he said/she said” allegations where there are no eyewitnesses WARNING SIGNS FOR FRAUD Red Flags for fraud and Misconduct Specific method to interview witnesses. The Interviewer – Knowing Thyself Interview Techniques Fundamental The Traits of a Good Interviewer Interview vis-à-vis Interrogation More RED Flags of that employees may have committed fraud The Interviewing Process using the “P.E.A.C.C.E” model 5 Steps in Integrating Interviewing Techniques into FactFinding Enquiries Psychological Elements for the Interviewing Process Practical Tips on Handling Interviewees Effective Negotiation Techniques How to Detect, Manage and Mitigate Deceptions by Asking Different Types of Question Practical Techniques to Verify Information Provided NOTE TAKING DURING INTERVIEW Other techniques and questioning strategies you can use to determine whether a witness is lying Is it lawful to use social media in your investigation?
  10. 10. THE 4 STEPS IN ANY INVESTIGATION
  11. 11. What is Fraud There will always be fraud. If I remember correctly it was Singapore Minister Mentor Lee Kuan Yew, the then Prime Minister of Singapore who once said with words to the effect that “If we were to spend a hundred dollars and ninety nine reaches the ground, I will be a happy man.” This man is a realist. He must be commended for his willingness to come to term with the reality that even as he builds a clean government, he is fully conscious that there is no such thing as a completely clean civil service. Subsequent fraud scandals in the public sectors proved that he is absolutely right about the need for a clean government. The thing about fraud is that if you cannot prove it in court it did not happened. It is totally irrelevant who we suspect or what we know. Knowledge about something does not make it a fact in court. In the court of law, it is all about proving that the alleged event did in fact took place. Fraud is the intentional deception with intent to make a gain or to cause a loss, or to expose another to the risk of loss. It can be perpetrated for the benefit of or the detriment to the employer, and can be committed by persons outside as well as inside organization. In practice, all allegations of fraud are initially looked into by an Investigation team, irrespective of where the allegation has come from. This does not mean that all allegations are investigated. Allegations can sometimes be malicious or the information being alleged is already declared. There should be a referral process that will identify the cases that merit an investigation. It is important to
  12. 12. remember that a person is innocent until proven guilty and the fact that someone maybe being investigated does not make them guilty. There are many reasons why someone decides to report an allegation of fraud and it is important that people continue to do so. Although all allegations should be treated with the strictest confidence and can also be made anonymously, keeping things under wrap might prove to be difficult in practice. Making an allegation can for some be a very difficult thing to do. Fraud is destructive in nature, In the private sector, the stakeholders and the employees are the one that suffers. It is important to remember that even in the public sector, this is not a complainantless crime, in a lot of cases it is theft from the public purse. Money pilferage from the government coffers could far better be spent on public services. Fraud is generally defined as: • A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment. • A misrepresentation made recklessly without belief in its truth to induce another person to act. • A tort arising from a knowing misrepresentation, concealment of a material fact, or reckless misrepresentation made to induce another to act to his or her detriment.
  13. 13. • Unconscionable dealing; especially contract law, and the unfair use of the power arising out of the parties’ relative positions and resulting in an unconscionable bargain.
  14. 14. What is Employee Misconduct? Most employees perform their jobs competently and meticulously. Others who do not possess the same drive and expertise, still manage to perform satisfactorily. However, there are a few employees whose consistent misconduct set them apart from their peers and require a large amount of management time. These employees can be said to be guilty of employee misconduct. Simply put, employee misconduct can be defined as a breach of duty or discipline which is inconsistent with the express or implied conditions of an employee's contract of service or employment bargain. Examples of misconduct are theft or dishonesty, disorderly or immoral conduct at work, willful insubordination etc. The employment bargain is an agreement between an employer and an employee whereby the employer agrees to employ the employee for a specific job and pay the employee a predetermined salary. Acceptance of the terms of employment by the employee signifies that the employee has agreed to work regularly and with reasonable skill under the directions of the employer.
  15. 15. There are two types of employee misconduct; culpable conduct and non-culpable conduct. Culpable conduct is blameworthy conduct which can be legally corrected with progressive discipline. Examples of culpable conduct are theft and assault. Non-culpable conduct is non-blameworthy conduct that cannot be legally corrected with discipline. This refers to cases whereby the employee cannot be blamed for his or her poor performance. For example, cases whereby the employee is excessively absent from work due to chronic medical problems. Other examples include failure to perform due to disability or lack of aptitude. Although it is possible for both culpable conduct and nonculpable conduct to exist in the same case, it is essential to distinguish the two as they are very different and have to be treated separately. Elements of Proof The term "elements of proof" is defined by Black's Law Dictionary as: Those constituent parts of an action that would tend to prove it occurred and the perpetrator was the individual that did it. There are several kinds elements of proof when it comes to employee misconduct. Examples consist of: proof that a violation occurred, proof that the employee performed an act that violates the law, proof that the employee performed an act in violation of policy or procedure, proof that the employee avoided performing a particular act in agreement
  16. 16. of his or her job description, and last but not least, proof that the employee behaved with irresponsible disregard for policy, procedure and or common sense. In the United States, Actual Fraud is defined as: • A concealment or false representation through a statement or conduct that injures another who relies on it in acting. It also comprises three elements: • Fraud in fact • Positive fraud • Moral fraud In the case of an “actual fraud,” you want to be able to prove these three elements and to have policies, procedures, and processes in place to provide controls that will show that it was in fact an actual fraud that an employee, supplier, customer, or others committed and it was their intent to do so. It is also vitally important that the person committing the actual fraud did so • Knowing what the corporation’s policies, procedures, and processes were; and that the fraudster • Knew that those policies, procedures, and processes were to be followed at all times, ideally by so attesting to this knowledge in writing — which is a key process in your anti-fraud program.
  17. 17. This consideration is important because in the U.S. judicial system today, it generally must be shown that the person perpetrating the fraud against the corporation, especially an employee or someone who has a business working relationship with the corporation, was aware of the policies, procedures, and processes that were violated and/or knew that such actions were against corporate policy, procedures, or civil or criminal laws. In the United States, an investigator, fraud examiner, or security professional cannot rely on the expression “ignorance of the law is no excuse” to help “make the case” against the defrauder. In fact, there are some indications that the alleged defrauder must also be told in advance when making them aware of anti-fraud policies and procedures to follow the consequences of his or her actions of not following the “rules”. It is especially important in these days of “It’s not my fault!” where personal responsibility seems to have taken an extended holiday. Remember that unless you are a lawyer and feel confident in defining a fraud and how to go about identifying the elements of proof, you should coordinate with the corporate legal staff and get their input when such legal issues arise. It will not only save you time and possible embarrassment but will help ensure that your actions do not cause a lawsuit against the corporation, which may have not otherwise been contemplated by the “offended party.”
  18. 18. It may also to help ensure that your employment is not terminated over such matters. Also remember that “anyone can sue anyone over anything.” However, with the proper anti-fraud program elements in place, you have a better chance of ensuring that the fraud miscreant does not successfully win his or her lawsuit. Even though the preceding and succeeding definitions apply to the United States and possibly some other countries, most modern countries have similar laws that basically require the same elements of proof. However, a global corporation must know the specific fraudrelated statutes in each country and take these statutes into consideration when developing and managing an anti-fraud program for a global business.
  19. 19. How is Fraud different from Employee Misconduct In the earlier chapter, fraud has already been defined as the intentional deception with intent to make a gain or to cause a loss, or to expose another to the risk of loss. It can be perpetrated for the benefit of or the detriment to the employer, and can be committed by persons outside as well as inside organization. This definition draws a distinct line between fraud and employee misconduct as employee misconduct merely refers to a breach in the basic obligations of the company. Employee misconduct does not involve any intentional deception by the employee with an intent to make a gain or cause a loss, employee misconduct involves employees who do not abide by the rules of the company and/or the terms of their employment bargain. On another note, employees tend to misbehave when they are cynical about the ethical culture of the corporation in question. This means that employee misconduct can be linked to the ethical nature of the corporation in question. Fraud on the other hand, is due to the malicious nature of the perpetrator and is not linked to the nature of any corporation in particular. Finally, the most obvious distinction between fraud and employee misconduct would have to be that fraud can be committed by persons outside the organization whereas only employees of the organization can be guilty of employee misconduct.
  20. 20. When will fraud happen IN your organization. The good news is that most people who commit fraud are not career criminals. The vast majority are trusted employees who have no criminal history and who do not consider themselves to be lawbreakers. So the question is, what factors cause these otherwise normal, law-abiding persons, to commit fraud? The best and most widely accepted model for explaining why "good people" commit fraud is the fraud triangle. This is a model developed by Dr. Donald Cressey, a criminologist whose research focused on embezzlers, people he called "trust violators." According to Cressey, there are three factors that must be present in order for an ordinary person to commit fraud. All three of these factors must be present at the same time in order for fraud to occur. The three factors are now referred to as:  Pressure (also known as Motivation)  Opportunity  Rationalization PRESSURE The first leg of the fraud triangle represents pressure, or what Cressey called a perceived non- sharable financial need. This is what motivates the crime in the first place. The fraudster has some financial problem that he is unable to solve through legitimate means, so he begins to consider committing an illegal act such as stealing cash or falsifying a
  21. 21. financial statement as a way to solve his problem. The financial problem can be personal (too deep in personal debt) or professional (the person's job or business is in jeopardy). Examples of pressures that commonly lead to fraud include:  Inability to pay one's bills  Drug or gambling addiction  Need to meet earnings to sustain investor confidence  Need to meet productivity targets at work  Desire for status symbols such as a bigger house, nicer car, etc.  Non-shareable problems and the importance of status Notice that Cressey did not say fraud is motivated by financial pressure, but instead by a non-shareable financial pressure. This is a very important distinction. Everybody has financial pressures, but not everybody commits fraud. What constitutes a non-shareable need is completely in the eye of the beholder. One person could lose his rent money gambling and will be motivated by this problem to write a company check to cover his rent. Another person might suffer the same loss and not feel compelled to commit an illegal act. Non-shareable problems all involve some sort of embarrassment, shame, or disgrace. More importantly, they all threaten the fraudster's status as a person who is trusted
  22. 22. by others. In almost every fraud case, the fraudster's financial problem relates to status-seeking or statusmaintaining. So you see, it has a lot to do with what he thinks what others will think of him. Consider the following sanitized cases that occurred in Singapore : Financial Statement Fraud A CEO develops a new business plan. Unfortunately, the plan fails miserably, and sales plummet. Having just suffered through two previous bad quarters, the CEO is afraid that this latest disaster will cost him his job. Unable to face the shareholders and the board of directors and tell them the bad news, the CEO persuades the CFO to help him create fictitious sales to mask the losses. The CEO is convinced that they can increase sales and correct the books next quarter. Misappropriation of Assets A high-ranking financial officer experiences heavy losses in her personal investments. She feels unable to admit to her personal financial failures because this would hurt her status as a highly trusted person who is in charge of her company's finances. Therefore, she tries to resolve her personal financial problem in secret by writing company checks to a shell company she controls.
  23. 23. Corruption A bank Relationship Manager desires prestige symbols such as a nicer car, better clothes, jewellery, etc., but she cannot afford them on her salary. Because she cannot legitimately obtain these items, and because she is unwilling to "settle" for less expensive counterparts, she begins to get kickbacks or grease money from the banks suppliers to purchase these status symbols. OPPORTUNITY The second leg of the fraud triangle is opportunity, sometimes referred to as perceived opportunity, which defines the method by which the crime can be committed. The person must see some way she can use (abuse) her position of trust to solve her financial problem with a low perceived risk of getting caught. It is also critical that the fraudster be able to solve her problem in secret. Remember that fraudsters are motivated by concerns over status. If a perpetrator is caught embezzling or falsifying financial information, this will hurt her status at least as much as the underlying problem she was trying to conceal. So the fraudster not only has to be able to steal funds, she has to be able to do it in such a way that she will likely not be caught and the crime itself will not be detected. For example, if an employee has access to blank checks she may see an opportunity to forge a company check payable to herself. But that check might well be spotted during the reconciliation of the bank statement and she would be caught. In this case,
  24. 24. even though there is an opportunity to steal the funds, there is no opportunity to steal them in secret. But suppose the same employee also reconciles the company's bank statement. Now, she can write a check payable to herself and then when the bank statement arrives she can destroy the fraudulent check and force the balance on the reconciliation. Now the person has a perceived opportunity to commit fraud. Rationalization The third leg of the fraud triangle is rationalization. As we stated already, the vast majority of fraudsters are first-time offenders with no criminal past. They do not view themselves as criminals. They see themselves as ordinary, honest people who are caught in a bad set of circumstances. Because the fraudster does not see himself as a criminal, he must justify the crime to himself in a way that makes it an acceptable or justifiable act. This is known as rationalization. Common rationalizations include the following:  I was only borrowing the money  I was entitled to the money  I had to steal to provide for my family  I was underpaid/my employer had cheated me  My employer is dishonest and deserved to be fleeced
  25. 25. While the perpetrator must rationalize the crime to himself before he commits the crime, after the act has taken place the rationalization will often be abandoned. CONFLICT OF INTEREST A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in another. The presence of a conflict of interest is independent from the execution of impropriety. It is important to understand that not every conflict of interest is a fraudulent act. The corrupt intent must be proven in order to establish a criminal act. Therefore, a conflict of interest can be discovered and voluntarily defused before any corruption occurs. A widely used definition is: "A conflict of interest is a set of circumstances that creates a risk that professional judgement or actions regarding a primary interest will be unduly influenced by a secondary interest." Primary interest refers to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public office. Secondary interest includes not only financial gain but also such motives as the desire for professional advancement and the wish to do favours for family and friends, but conflict of interest rules usually focus on financial relationships because they are relatively more objective, fungible, and quantifiable. The
  26. 26. secondary interests are not treated as wrong in themselves, but become objectionable when they are believed to have greater weight than the primary interests. The conflict in a conflict of interest exists whether or not a particular individual is actually influenced by the secondary interest. It exists if the circumstances are reasonably believed (on the basis of past experience and objective evidence) to create a risk that decisions may be unduly influenced by secondary interests. A most celebrated case in Singapore to illustrate this point was exemplified when Former Central Narcotics Bureau (CNB) director Ng Boon Gay was acquitted Thursday of all four charges against him in the sex-for-contracts case that gripped Singapore over the course of the trial that began 2012. Reading out a 32-page oral judgment to a packed courtroom, District Judge Siva Shanmugam impeached the testimony of prosecution witness and former IT sales executive Cecilia Sue, while accepting the evidence and explanations given by Ng where his testimony was questioned. Pointing out that prosecution lawyers had not disputed Sue's dishonesty in court about her sexual relationship with Ng, he said he found Sue's explanations for her discrepancies in evidence "inadequate".
  27. 27. In her testimony last year, Sue denied she had a sexual relationship with Ng. She painted the picture of a man who became increasingly desperate to obtain sexual gratification in the form of oral sex, though she repeatedly rejected him. "Her claims that she was tired, stressed and frightened, even if true, would not satisfactorily account for the wide divergence in her evidence," he said. If Sue's statements after 12 January last year were to be believed, it meant the accused forced her to perform oral sex on him on 2 December 2011, the judge cited. However, the judge noted that three days later after the incident, Sue messaged "M u", which meant "miss you" and when the accused did not respond, Sue messaged "u ignore me" followed by "W her? Where's family day?" Six days after the last occasion of alleged forced fellatio, Sue sent the accused a sexually suggestive message "Did u DIY" with "DIY" understood by the accused as referring to masturbation. "It would be surprising to see such conduct from someone who had been the subject of forced oral sex," the judge noted.
  28. 28. Overall, the judge said he found Sue's explanation for the numerous material discrepancies unconvincing. "The discrepancies went towards the crux of the charges," he said. "After weighing her oral testimony with the evidence in its entirety, I found that her credit had indeed been successfully impeached." The judge said he was satisfied that Ng and Sue were in a consensual sexual relationship and that the acts as detailed in the charges took place in that context. Even though the prosecution had tried to explain Sue's denial of her relationship with Ng, the judge felt that "this in itself is indicative of a disturbing propensity on Ms Sue's part to be untruthful when her own interests are called into question". "Ms Sue had provided CPIB with two contrasting versions of facts in her statements. As these versions are widely divergent, one of them had to contain untruths. Effectively she has been untruthful to both the court and the law enforcement agency," said Shanmugam. "In the circumstances I was of the view that it would be unsafe to accept any part of Ms Sue's oral testimony on any contentious matter which testimony was not independently
  29. 29. corroborated by some other evidence." Ng's testimony 'largely consistent' with evidence The judge then elaborated on his assessment of Ng's testimony in court and performance as a witness, declaring that he found that Ng's credit as a witness was not impeached. He said that Ng had given his evidence in a "forthright manner", where he candidly admitted that he had known of Sue's involvement with his agency after she told him about the deals she closed that involved CNB indirectly, through NCS. Noting the need for Ng's statements in court to be considered in context, Shanmugam said the issue of whether engaging in sexual acts on an "on and off" basis equates to being a "regular sex partner" is a subjective matter, and that Ng was entitled to decide what was regular or not. Whether or not Sue enjoyed the trysts was also subjective, said the judge, since Ng would not have been in a position to state what was on her mind. "Contrary to the prosecution's assertions, I found that the accused (Ng)'s statements, when viewed in context, were
  30. 30. largely consistent with his claim that he was in an intimate relationship with Ms Sue," he said. He added further that Ng's explanations for all the prosecution's alleged discrepancies apart from his knowledge of Sue's involvement with CNB were "credible and consistent", and that this inconsistency, in turn, was "not particularly material" in the circumstances, and did not go to the crux of the charges against Ng. He also noted that the process for procurement was driven by CNB's IT department and that the accused did not take part in that process or influence the work of the evaluation committee that reviewed the agency's potential vendors. Despite acknowledging that there was indeed a conflict of interest, Shanmugam stated that the presence of conflict does not automatically imply that there was corruption. He said he was satisfied that there was neither corrupt element or guilty knowledge on Ng's part in relation to his charges, adding that in his view, throughout the time where the two IT contracts were approved and processed, Ng possessed "no ulterior motive, let alone a corrupt intent". Shanmugam also noted that even though only Ng's intentions behind the four instances of fellatio were relevant to the trial, he found that both him and Sue had "innocuous" motivations in giving and receiving oral sex.
  31. 31. "On this count alone I found that (Ng) had not only successfully rebutted the presumption (of corrupt intent) but had raised a reasonable doubt in the case against him, which would warrant an acquittal on all four charges," he said, which triggered a wave of relief across the courtroom, in particular Ng's relatives, some of whom tear and hugged one another. Speaking to reporters after the verdict, defence counsel Tan Chee Meng said it was "vindication of Ng Boon Gay, the fact that he's not corrupt and his innocence has been proven". What is the object lesson here? It is pretty obvious that once again we must be reminded that what might be considered as immoral by society does not make it illegal.
  32. 32. When Does the Fraud Triangle Not Apply? The fraud triangle applies to most embezzlers and occupational fraudsters, but it does not apply to the "predatory employee"—the person who takes a job with the intent of stealing from his employer. Also, as we stated earlier, while a rationalization is necessary for most people to begin committing fraud, the rationalization will often be abandoned after the initial act has taken place. Most frauds are not one-time events. They usually start as small thefts or misstatements and they gradually increase in size and frequency. As the perpetrator repeats the act, it becomes easier to justify until no justification is needed at all.
  33. 33. THE LIMITATIONS OF INTERNAL CONTROLS What Does the Fraud Triangle Tell Us? Perhaps the most important lesson to be learned from the fraud triangle is the inherent limitations of Internal Controls and the impotency of the internal auditor. Normally all three factors must be present for fraud to occur. If any one of the three elements is missing, fraud will normally not occur. Cressey's model also tells us that concerns over status, not greed, is the primary motivator for occupational fraud. That being the case, we must relook at the function and purpose of the internal audit profession. The Institute of Internal Auditors ("IIA") offers the following description: "Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes." Major roles and responsibilities of internal audit function are summarised as below:  evaluates and provides reasonable assurance that risk management, control, and governance systems are functioning as intended and will enable the
  34. 34. organisation's objectives and goals to be met  reports risk management issues and internal controls deficiencies identified directly to the audit committee and provides recommendations for improving the organisation's operations, in terms of both efficient and effective performance  evaluates information security and associated risk exposures  evaluates regulatory compliance program with consultation from legal counsel  evaluates the organisation's readiness in case of business interruption  maintains open communication with management and the audit committee  teams with other internal and external resources as appropriate  engages in continuous development  provides support to the company's anti-fraud programs. education and staff There is no such thing as a perfect control system. Staff size limitations may obstruct efforts to properly segregate duties, which requires the implementation of compensating controls to ensure that objectives are achieved. A limited inherent in any system is the element of human error,
  35. 35. misunderstandings, fatigue and stress. Employees are to be encouraged to take earned vacation time in order to improve operations through cross training while enabling employees to overcome or avoid stress and fatigue. The cost of implementing a specific control should not exceed the expected benefit of the control. Sometimes there is no out-of-pocket costs to establish an adequate control. A realignment of duty assignments may be all that is necessary to accomplish the objective. In analysing the pertinent costs and benefits, managers also need to consider the possible ramifications for the organization at large and attempt to identify and weigh the intangible as well as the tangible consequences. Internal controls should reduce the risks associated with undetected errors or irregularities, but designing and establishing effective internal controls is not always a simple task and cannot always be accomplished through a short set of quick fixes. However, we hope this chapter has helped to explain the basic internal control concepts and given you some ideas for improving your department's controls. The conclusion of the of the whole matter is that there is no such thing as a perfect system of internal control because of its inherent limitations :
  36. 36.  Errors may arise from misunderstandings of instructions, mistakes of judgment, fatigue, etc.  Controls that depend on the segregation of duties may be circumvented by collusion  Management may override the structure  Compliance may deteriorate over time
  37. 37. Why we must not blame the Internal Auditor for every fraud Corporate internal auditors (those who are employees of the corporation and are paid directly by the corporation) are hired to internally audit corporate departments for compliance with corporate and government policies, laws, regulations, and the like. Although some may argue that there may be a few exceptions out there in the corporate world, auditors basically look for compliance and if it looks good on paper, they are usually satisfied if one plus one equals two. Remember that “corporate fraud” means the frauds perpetrated against a corporation or other business-related entity by individuals within and/or external to a corporation. It does not mean frauds perpetrated exclusively by “corporations.” Fraud is a “people business.” The accountants and/or auditors (who often have an accountancy background and experience) can provide a good supporting role in combating corporate fraud. However, although they have been receiving some training and gaining some experience in dealing with frauds over the years, they approach it from an auditor’s viewpoint and not as part of leading an assets protection program that includes a proactive anti-fraud program. No offense is intended to auditors or others, for they are just doing what they have been trained to do in the manner in
  38. 38. which they were trained. Frauds are perpetrated by people, and therefore, one’s anti-fraud training, education, and experience should focus in part on understanding people in general, as well as defrauders and their motivations. This aspect is not emphasized to auditors in their auditing and accounting education. In addition, most people do not like confrontation, nor do they like dealing with hostile people. Even security and law enforcement professionals do not like hostile encounters. However, the training and experiences of security and law enforcement professionals place them in a better position to successfully deal with people in confrontational situations. One of the key question that needs to be addressed is : Should the manager of the audit department also be the leader of a corporate anti-fraud program? The answer is no, for several reasons, including those stated earlier. For example, this would include compliance with the corporate anti-fraud program, as well as the audit staff writing the antifraud program and its policies, and perhaps also many of its processes, procedures, and such. This would represent a conflict of interests in as much as they themselves approve what they have written and implemented; they also serve as the auditors to determine whether what they did was the correct thing to do and supports compliance with other corporate policies, government oversight laws, regulations, and so on.
  39. 39. Why do some management thinks that Sanctions Don't Deter Fraud We can also deduce from the fraud triangle that simply punishing people who are caught committing fraud is not an effective way to deter fraud. There are several reasons why this is so:  Fraudsters only commit their crimes when there is a perceived opportunity to solve their problems in secret. In other words, fraudsters do not anticipate getting caught.  The threat of sanctions does not carry significant weight with a fraudster because he never expects to face them.  Fraudsters rationalize their conduct so that it seems legal or justified. Thus, they do not see their actions as something that is or should be sanctioned.  Because fraudsters are primarily motivated by status, the greatest threat they face is that their crime will be detected.  Detection will result in loss of status. Any sanctions that follow are only a secondary consideration. Given the above observations, how does one go about addressing the primary motivational need? The solution seem to be more psychological than physiological. This is where applied psychology comes in handy for the fraud examiner. The fraud examiner need to understand the
  40. 40. psychological profiles of both sexes in their motivational needs.
  41. 41. Motivation and Rationalization in fraud is Gender bias. Financial exploitation, and particularly thefts and scams, are increasing at an alarming rate. In this book, we (a) determined the national prevalence of older adults who report having been a victim of fraud, (b) created a population-based model for the prediction of fraud, and (c) examined how fraud is experienced by the most psychologically vulnerable adults. Financial satisfaction and social-needs fulfillment were significantly related to fraud. Using depression and social-needs fulfillment to determine the most psychologically vulnerable adults, we found that fraud prevalence was three times higher among those with the highest depression and the lowest social-needs fulfilment than among the rest of the people.Fraud Examiners and other professionals in the field need to be aware of their psychologically vulnerable clients' heightened exposure to financial fraud.
  42. 42. Man and woman do not rationalise the same way when it concerns fraud. Before entering upon the specific subject, let us – for the sake of those who are not yet acquainted with bias and psychosynthesis – touch upon the theme in a general way. Bias is an inclination to hold a skewed or prejudiced opinion of something or someone — objects, individuals, or groups. Bias can be positive or negative. If you are positively biased towards somebody, chances are that anything they do will seem good to you even if that’s not really the case. They enjoy a certain ‘privilege’ in your eyes. And if you are negatively biased towards somebody, even if they do their best to please you, you will still be able to find fault with them. When you were young, haven’t you found it unfair that the teacher’s pet in class gets away with everything? Talking in class, not submitting homework etc., while a student the teacher doesn’t like much seems to be getting into trouble always? This is a very simple example but when we talk about biases that exist in society, it become a lot more complicated. This is because societies consist of people who have multiple identities — of sex, gender, sexuality, religion, race, caste, class, community and so on, and one person can suffer a bias or enjoy a privilege at many levels. Gender bias is one of the many forms of biases that exist in society. Believing a certain gender to be superior to another
  43. 43. and discriminating on the basis of this belief can be called gender bias. Why is there a need for fraud examiners to understand psychosynthesis Because all of us have within ourselves different and contrasting psychological elements which alternate and collide. They often reach such a degree of forcefulness as to form separate personalities or sub-personalities which struggle for supremacy within us. This results in a number of contradictions, conflicts, turmoil and upheavals, which may produce serious nervous difficulties, and often gives the individual a painful and growing sensation of dissatisfaction, instability and disharmony. But this “human condition” is by no means fatal and inevitable; we can change and remedy it if we are willing to examine ourselves thoroughly and if we apply the methods that are necessary in order to combine the dissociated and contrasting elements and transform them into a rich and harmonious synthesis. Synthesis is an organizing and unifying principle which acts in all the kingdoms of nature. We find manifestations of it in inorganic matter in the form of chemical combinations. It acts in a more evident and complicated way in organic life as the power of self-regulation of living bodies, as the delicate
  44. 44. and admirable balance between the wear and tear and the rebuilding of tissues. In the psychological life, the principle of synthesis finds its application in different ways : by unifying opposite vital interests and activities in regard to the outer as well as the inner world of the individual (extraversion and introversion); by synthesizing thought and feeling and other psychological elements around a unifying centre in the psychosynthesis of the personality. Then there is the problem of spiritual psychosynthesis, that between the personality and the Self or soul that some defines as the seat of the man, which constitutes the high aim and aspiration of all individuals who cannot be satisfied with terrestrial values only. Another aspect of synthesis is that which unites and individual in numerous relations of integration with other individuals. There is, first of all, the psychosynthesis of the human couple, the eternal problem of the relation between the sexes, about which we shall have more to say further on. Then comes the synthesis of the family group, of social groups, national groups and, at the very last – as the final ideal - the psychosynthesis of all mankind. This very lengthy explanation essentially means, as fraud examiners we must understand that different people have different makeup. That being the case, we must treat them as individuals and understand that each have a very different psychological profile.
  45. 45. Psychological Differences between Men and Women The first question which calls for our consideration in this context concerns the functions and duties which a woman can and must discharge, the particular types of psychosynthesis which she can bring about in accordance with her particular psychological constitution, and the many problems which arise from woman’s own psyche or and her relation with man. Situations and problems of this nature arise in every woman’s life and it is necessary that she face them in a way that is most satisfying to herself and to the other people concerned. The most natural thing and frequent role for woman is that of being man’s companion, his wife. An Italian author, Lucio d’Ambra, wrote two novels entitled respectively The Occupation of the Husband and The Profession of the Wife. In these different designations albeit outdated, an important psychological truth is alluded to, namely that while man’s principal functions are his activities outside the family and are of a social character, woman’s most important activity, her “profession”, is generally in and with the family. A simpler way to understand this is that woman in general tend to live for others and that is something that comes quite naturally. To use a less modern but gentle and apt expression: woman is, or should be, “the queen of the home”.
  46. 46. Unfortunately, this kingdom of the home is often troubled by silent or noisy disharmonies and conflicts which sometimes shake it to its very foundations and can even dismember it. If we search for the causes of these discords, we discover that there are mainly two: selfishness and lack of understanding. The corresponding remedies can, therefore, be reduced to two principal ones: The first one is goodness and a spirit of sacrifice. These are hard to develop, but are high qualities which everybody should cultivate because their fruits are most rewarding. The second remedy consists of an intelligent, intuitive, willing psychological and spiritual understanding. This understanding is not easy to acquire because the psychological constitutions of man and woman are deeply different, much more so than we generally realize. One could almost say that they belong to two different species. It therefore seems useful to pause and examine somewhat the differing characteristics of male and female psychology. In speaking frankly, I may at times seem rude to both sexes. Typically, although by no means universally, there exists between a husband and his wife polarities of psychological functions. The man tends to excel in certain vital operations while the woman manifests others. For example, in dealing with the physical world, man has active, manipulative and creative functions while woman, as wife and mother is primarily concerned with maintaining and preserving the life and resources of the family. On the other hand, in the sphere
  47. 47. of the emotions and of the imagination, it is the woman who is usually the better developed, more positive and productive of the two. In this area, the husband is apt to be relatively naive and easily confused. So there is an apparent inversion of dominance functions that man and woman need to appreciate, and therefore collaborate with each other in order to form an effective team. When that actually happens, we call it the “optimum” point. In practice this is usually achieved at the moment when two individuals decide to get married. But the “optimum” point in itself is an abstract concept. It is not static. Reality shows that expectation between man and woman change with time. Most woman marry a man to change it into her own image of what should be the perfect man. Man in general and in most instances does not know what they are doing. Furthermore, there is a similar inverted polarity between man and woman in the intellectual sphere. Man tends to be the more rational, logical, and active. He is consciously oriented toward facts, their relationships and their implications. By contrast woman’s mental functions are less developed, but balanced by her superiority in another sphere, that of the intuition. This is the capacity for attaining understanding in non-rational and unconscious ways which are fully as valid as man’s thoughtful rationality. These different polarities define some important qualitative distinctions between man and woman. These differences can explain many psychological conflicts and disorders.
  48. 48. Speaking of man in general, the average so-called normal man develops qualities and functions such as aggressiveness, mental activity, and efficiency. These he manifests to a marked degree, whereas qualities of a feminine type such as sensitivity, feeling, imagination, and intuition remain in an undeveloped and, at times, almost atrophied conditions. Because these latter functions do not keep pace with the rest of his growth, it therefore often happens that the average man remains relatively primitive and sometimes even barbaric. His imagination, generally repressed in the unconscious, is disordered when it does rise to the surface, and often expresses itself in fancies of which he himself is ashamed. His feeling nature tends to remain primitive; he has neither delicacy nor plasticity. He can pass from outbursts of almost savage passion to hardness and insensitivity, and vice versa, or he can pass from insensibility to almost childish weakness and sentimentality. His intuition is generally rudimentary, almost non-existent. He endeavours to solve all problems, whether practical or abstract, through mental processes only, and because he does not take into consideration the more subtle and imponderable elements, he is often mistaken as being insensitive. In the various events of life, his cleverly formulated plans and programs often come to naught, and instead of finding the faults that lie within himself and his own shortcomings, he blames other people and events for his failures.
  49. 49. The Editor ACFE Regent Emeritus Tommy Seah, Certified Fraud Examiner He is the elected Vice Chairman (2005/07) of The Association of Certified Fraud Examiners Board of Regents based in Texas, USA. CFE is a post graduate professional qualification recognized by the FBI and USA Central Intelligence Agency in it’s recruitment of auditors for combating fraud. His services in providing technical training is much sought after by numerous banks in the region, including Germany, Singapore, Malaysia, China, Indonesia, Philippines and Taiwan. Tommy's previous experience includes systems based auditing in an American International Bank, where he was the Senior Regional Auditor responsible for the Bank's audit in the Asia Pacific region. He has also held the top executive position of Chief of Internal Audit in a prime offshore bank where his audit duties cover the Singapore and Hong Kong operations of the bank. He covers all areas of the bank's audit of operations and IT systems. He also has practical working
  50. 50. experience in the Operations Department of a foreign bank. Tommy Seah is the author of seven banking books including the F.I.G. Program. The FIG is the authoritative and definitive text on Financial Instruments designed to be used in the world wide banking industry for product training. This publication has received excellent review and first class commendation from some of the most authoritative professional certification body and top rated banks in the world. The other six authoritative texts used in his training are The Audit Foreign Exchange in Banks, The Control of Money Market Activities in Banks, Financial Management, MCA for Banks, SWAPS in Investment Banking and AntiMoney Laundering 101. His latest publication is Understanding and Auditing BASEL II, Operational Risk Management. For the past thirty years, Tommy Seah has trained some of the top banks and financial institutions in the region. In particular, his expertise in SOX 404, AML and Basel II systems implementation is much sought after by financial institutions and banks in Germany, Brunei, China, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Thailand. His prolific training career has seen him trained over many Chief Financial Officers, Compliance Officers, Auditors, Risk Managers, fraud investigators, financial analysts, forex managers, IT Professional, legal counsels, private bankers and accountants. Today, he is still a very much a hands on practitioner doing Independent Third Party work for audit practice assurance,
  51. 51. compliance review and fraud investigation in the Asia Pacific Region. He is also a Certified SOX Professional and appointed as Professor of Economics of the CHINA Institute of Directors.
  52. 52. Some of the world’s leading banks and financial institutions staff trained by Tommy : • The Government Investment Corporation of Singapore • The Stock Exchange of Singapore • Deutsche Bank (participants from 40 countries) • Westpac Banking Corp • Monetary Authority of Singapore (Central Bank) • United Overseas Bank (UOB) • BNP Paribas • Bank of China (China-wide) • Hong Kong and Shanghai Bank • Overseas Chinese Banking Corporation Ltd • Bank Negara (Malaysia Central Bank) • May Bank
  53. 53. REVIEW By JOSEPH R. DERVAES, CFE, ACFE Fellow, CIA AUDIT MANAGER FOR SPECIAL INVESTIGATIONS WASHINGTON STATE AUDITOR'S OFFICE U.S.A. Tommy Seah is a gentle giant whose writings continue to demonstrate why he is a recognized authority in the banking industry. This latest handbook provides valuable knowledge, tools, and best practices to practitioners that will help prevent, detect, and even discourage future money laundering activities from occurring. The membership of the Association of Certified Fraud Examiners has also recognized the author's leadership in this field and elected him to the Board of Regents of the Association, one of the highest positions any CFE may hold in the profession. I know that this handbook will be destined to become a welcome addition to the personal library of both CFEs and banking professionals worldwide.

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