Workplace culture can encourage employee fraud
The culture of an organisation can have a significant effect on the likelihood of employee fraud occurring within the company, according to fraud investigators Dolman Bateman.

Warwick Dolman, Director of Dolman Bateman, who includes culture as part of a fraud risk assessment, says all companies should take a long hard look at the ‘anti-fraud’ strength of their culture.

“A negative culture can produce suspicion, secrecy, low productivity and poor commitment to the organisation. This typically results in poor adherence to procedures and policies without penalty – a perfect recipe for encouraging fraud,” says Warwick Dolman.

“On the other hand, a positive anti-fraud culture encourages employee honesty and alignment with organisational values and goals.

“We use a cultural survey, based on extensive research in the field, to assess the culture of organisations and the likelihood of fraud occurring.

“It essentially provides a ‘snapshot’ of an organisation and will identify problems with adherence to underlying systems and cultural perceptions that could be harmful to the company.

“Some indicators of a negative culture include overly aggressive organisational targets, understaffing, observed procedural ‘slackness’ by senior managers, lack of stated ethical standards and lack of open internal communications,” says Warwick Dolman.

The cultural survey comprises 44 questions requiring responses which address several different aspects of the organisation, such as systems, team dynamics, employee trust, job satisfaction and attitudes of staff towards management.

The survey has been developed by a team of experienced fraud investigators at Dolman Bateman, with advice from the Centre for Organisational Innovation and an independent psychologist.

Dr Peter Crowfoot of Dolman Bateman, who was involved with the development of the survey, says the culture of an organisation can also be looked at in terms of different job types.

“We can judge what type of fraud is most likely to occur within a work environment based on the type of jobs that exist within the organisation,” says Dr Crowfoot.

“For example, senior managers are more likely to perpetrate fraud in different ways to loosely bound workgroups such as sales teams. Even tightly bound workgroups have specific risk areas, as do isolated subordinates such as bus drivers and tellers.

“We recently conducted a cultural survey of a building company, and the answers were significantly skewed towards a certain type of response, making it clear that they were a tightly bound workgroup with an obvious potential for group-driven fraud,” says Dr Crowfoot.

Dolman Bateman specialises in the detection, investigation and minimisation of fraud in the workplace. Warwick Dolman CA, CPA is a founder and Director of Dolman Bateman.

***
Released for Dolman Bateman by Dennis Rutzou Public Relations. For further information contact David Lizzio (02) 9413 4244.