A.B.C.'s of Behavioral Forensics: Applying Psychology to Financial Fraud Prevention and Detection

Understand how the psychologies of fraudsters and their victimsinteract as well as what makes auditors/investigators/regulatorslet down their guard. Learn about the psychology of fraud victims,including boards of directors and senior management, and what makesthem want to believe fraudsters, and therefore making themparticularly vulnerable to deception. Just as IT experts gave uscomputer forensics, we now have a uniquely qualified team immersedin psychology, sociology, psychiatry as well as accounting andauditing, introducing the emerging field of behavioral forensics toaddress the phenomenon of fraud.

Ever wonder what makes a white-collar criminal tick? Why doesshe or he do what they do? For the first time ever, see the mind ofthe fraudster laid bare, including their sometimes twistedrationalizations; think like a crook to catch a crook! TheA.B.C.'s of Behavioral Forensics takes you there, with expertadvice from a diverse but highly specialized authoring team ofprofessionals (three out of the four are Certified FraudExaminers): a former accounting firm partner who has a PhD inpsychology, a former FBI special agent who has been withinvestigative practices of two of the Big Four firms, an industrialpsychiatrist who has worked closely with the C-level suite of largeand small companies, and an accounting professor who hasinterviewed numerous convicted felons. Along with a fascinatingexploration of what makes people fall for the common andnot-so-common swindles, the book provides a sweepingcharacterization of the ecology of fraud using The A.B.C.'s ofBehavioral Forensics paradigm: the bad Apple (rogue executive),the bad Bushel (groups that collude and behave like gangs), and thebad Crop (representing organization-wide or evensocietally-sanctioned cultures that are toxic and corrosive). Thebook will make you take a longer look when hiring new employees andoffers a deeper more complex understanding of what happens inorganizations and in their people. The A.B.C. model will also helpthose inside and outside organizations inoculate against fraud andmake you reflect on instilling the core values of your organizationamong your people and create a culture of excellence and integritythat acts as a prophylactic against fraud. Ultimately, you willdiscover that, used wisely, behavioral methods trump solelyeconomic incentives. With business fraud on the rise globally,The A.B.C.'s of Behavioral Forensics is the must-have bookfor investigators, auditors, the C-suite and risk managementprofessionals, the boards of directors, regulators, and HRprofessionals.

• Examines the psychology of fraud in a practical way, relatingit to aspects of fraud prevention, deterrence, detection, andremediation
• Helps you understand that trust violation—the essence offraud—is a betrayal of behavioral assumptions about "trusted"people
• Explains how good people go bad and how otherwise honest peoplecross the line
• Underscores the importance of creating a culture of excellenceand integrity that inoculates an organization from fraud risk(i.e., honest behavior pays, while dishonesty is frowned upon)
• Provides key takeaways on what to look for when hiring newemployees and in your current employees, as well as creating andmaintaining a culture of control consciousness
• Includes narrative accounts of interviews with convictedwhite-collar criminals, as well as interpretive insights andanalysis of their rationalizations
• Furnishes ideas about how to enhance professional skepticism,how to resist fraudsters, how to see through their schemes, how toinfuse internal controls with the people/behavioral element, andmake them more effective in addressing behavioral/integrityrisks
• Provides a solid foundation for training programs across thefraud risk management life cycle all the way from the discovery offraud to its investigation as well as remediation (so the samefraud doesn't happen again)
• Enables auditors/investigators to engage in self-reflection andavoid cognitive and emotional biases and traps that lead toprofessional judgment errors (e.g., overconfidence, confirmation,self-deception, groupthink, halo effect, availability,speed-accuracy trade-off, etc.)

Ever since the accounting scandals surrounding Enron andWorldCom surfaced, leading to the passage of the Sarbanes Oxley Actof 2002, as well as the continuing fall out from the Wall Streetfinancial crisis precipitating the Dodd-Frank Act of 2010, fraudhas been a leading concern for executives globally. If you thoughtyou knew everything there was to know about financial fraud, thinkagain. Get the real scoop with The A.B.C.'s of BehavioralForensics.

DR. SRIDHAR RAMAMOORTI, ACA, CPA/CITP/CFF/CGMA, CIA, CFE, MAFF, CFSA, CGAP, CGFM, CRMA, is currently an Associate Professor of Accounting and Director, Corporate Governance Center, at Kennesaw State University. A former University of Illinois accountancy faculty member, he has worked for Arthur Andersen and Ernst & Young, and is a former corporate governance partner with Grant Thornton. A board member of the Institute for Truth in Accounting and Ascend, he chairs the Financial Executives International's Committee for Governance, Risk, and Compliance.

DAVID E. MORRISON III is a Clinical Assistant Professor of Psychiatry and Behavioral Sciences at Chicago Medical School, Rosalind Franklin University of Medicine and Science. An advisor to the Institute of Fraud Prevention (IFP) of West Virginia University since 2008, he is also a past president of the Academy of Organizational and Occupational Psychiatry, Group for the Advancement of Psychiatry (GAP) member, and a Tomkins Institute board member. He works full time as a principal at Morrison Associates, Ltd., with a career focused on leadership and executive development.

JOSEPH W. KOLETAR, DPA, CFE, is an independent forensic investigator and consultant. He has held senior positions such as principal and director with Ernst & Young and Deloitte in the firms' forensic and investigative practices. Before joining the private sector, Dr. Koletar spent twenty-five years as a special agent in the FBI, the last seven in senior executive positions. He was formerly chairman of the Board of Regents of the Association of Certified Fraud Examiners.

KELLY RICHMOND POPE, PHD, CPA, is an Associate Professor in the School of Accountancy at DePaul University and founder of Helios Digital Learning. She is the creator of the award-winning white-collar crime documentary Crossing the Line: Ordinary People Committing Extraordinary Crimes. Her work has been published in numerous academic journals such as Behavioral Research in Accounting, Journal of Business Ethics, and Auditing: A Journal of Practice & Theory. She also writes for Forbes.com, Newsweek Daily Beast, and PBS's Need to Know. Prior to academia, she worked as a forensic accountant for KPMG LLP. In 2012, Dr. Pope was elected to the AICPA Governing Council for a three-year term.