“Remember, With

Great Power Comes

Great
Responsibility.”

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Indra Widjaja

Webinar Series
12 November 2022
“The value of a man
should be seen in what he
gives and not in what he
is able to receive.”

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Albert Einstein
• 14 March 1879 – 18 April 1955.
• A German-born theoretical physicist, widely
acknowledged to be one of the greatest and
most influential physicists of all time.

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Be Positive Person

Please remember! Auditor Auditee

+ To influence positive change, + “Thank you for meeting with + “You just don’t understand
we must bring constructive us today. As you know, we my department.”
conversation to bear. have already found
deficiencies in your

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department during the course + “You are an auditor. What
+ Never lose sight of the art of of our audit.” makes you think you know
tact and diplomacy when so much about our
communicating. operations?”

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Be Tactful and Diplomatic
Quotes
+ Sir Isaac Newton (4 January 1643 - 31 March
1727; English mathematician, physicist) said
tact, “is the art of making a point without
making an enemy,”
+ Sir David Paradine Frost (7 April 1939 – 31
August 2013; English talk-show host,
journalist, and writer) described diplomacy as
“the art of letting somebody else have your
way.”
Just do it!
+ Having the ability to communicate in a way
that influence a positive outcome.
+ Being tactful and diplomatic does not mean
that we should ignore the facts or hide what
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we believe.
+ Presenting our ideas in ways that make them
more palatable.
+ It will almost always lead to better decision-
making and client relationships.
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“You can fool some of the
people all of the time, and
all of the people some of
the time, but you cannot
fool all of the people all of
the time.”

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Abraham Lincoln
• 12 February 1809 – 15 April 1865.
• An American lawyer and statesman who served
as the 16th president of the United States.

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University of Duisburg-Essen in
Germany
+ Western people are more willing to
listen to and believe someone who
is aesthetically attractive.
+ Positive feelings in one area cause
ambiguous or neutral traits to be
viewed positively.
University at Buffalo in USA
+ There is something called a “beauty
premium” that exists across
professions.
+ Attractive people have an advantage in
the job search and advancing in their
careers.
+ Attractive people are more likely to get
hired, receive better evaluations, and
get paid more.
Harvard University in USA
+ The size of this beauty premium is
economically significant and
comparable to the race and gender
gaps in the U.S. labor market.
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+ Workers of above average beauty
earn about 10 to 15% more than
workers of below-average beauty.
+ For example: generally tall men as
CEOs of major corporations and
winning presidential candidates.
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Be Objective to People Around Us

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Bias, like beauty, is Facts are our Remaining Beauty should
often in the eye of firewall against objective builds always reside in the
the beholder. bias.  credibility and truth!
provides the best
opportunity to
showcase our value
to the organization.

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“Power tends to corrupt,
and absolute power
corrupts absolutely”

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John Emerich Edward Dalberg-Acton
(Lord Acton)
• 10 January 1834 – 19 June 1902.
• An English Catholic historian, politician,
and writer.

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Donald R. Cressey

Occupational Fraud 2022:

A Report to the Nations

+ 12th edition of the largest global study on

occupational fraud.

+ Based on 2,110 real cases of occupational

fraud.

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+ Data from 133 countries.

+ 23 major industry categories included.

+ Explores the costs, schemes, victims, and

perpetrators of fraud.

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+ Men are perpetrating an
increasing % of frauds.
+ The gap between male
and female fraudsters in
financial losses caused has
narrowed.

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+ More perpetrators are in
roles with higher level of
authority (manager,
executive, owner).
+ The % of cases involving
corruption is on the rise.

+ Fraudsters are

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collaborating more.

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+ Red flags of fraud: living
beyond means.
+ Fraudsters living beyond
means has been the most
common red flag since
2008.

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+ Fear of job loss and denied
raise or promotion
contributes to fraud during
COVID-19.
+ Gender and red flags:
 Female: living beyond
means.
 Male: unusually close
association with vendor or

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customer.

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+ Shift to remote work
(15%), internal control
changes (13%),
organizational staffing
changes (12%), and
operational process
changes (12%) are the
most pandemic-related

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factors contributing to
occupational frauds.

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+ Total loss = USD 3,6 billion.

+ 5% of revenue to fraud
each year.
+ Median loss = USD
117,000.

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+ Fraud losses were 2x
higher at organizations
without hotlines.
+ Training increases the
likelihood of detection by
tip.
+ Organizations with
hotlines are more likely to

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detect fraud by tip.

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+ Organizations without
hotlines are: 3,5x more
likely to discover fraud
through external audit,
and nearly 2x more likely
by accident.
+ Large organizations are
especially likely to detect

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occupational fraud by tip.

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+ Long-tenured fraudsters
steal almost 3x more.
+ With similar levels of
authority, long-tenured
fraudsters caused must
larger losses.
+ Long-tenured fraudsters
are more likely to collude.

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+ Long-tenured fraudsters
take longer to catch.

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+ Less-tenured fraudsters
were more than twice as
likely to have been
previously fired or
punished for fraud-related
conduct.
+ Less-tenured fraudsters
were more likely to have a
criminal record.

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+ Living beyond means and
unusually close association
with vendor or customer
was much more common
among long-tenured
employees.
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+ 12% of fraud cases did not
involve any attempts to
conceal the fraud.
+ 48% of executive-level
perpetrators destroyed
evidence.
+ 61% of manager-level

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perpetrators created
fraudulent evidence.

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+ 42% of frauds were
detected by tips.
+ More than half of all tips
came from employees.
+ Corruption was the most
common scheme in every
global region.

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+ 8% of fraud cases involved
the use of cryptocurrency:
 48% making bribery and
kickback payments.
 43% converting mis-
appropriated assets.
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+ Organizations with the
fewest employees had the
highest median loss (USD
150,000).
+ Owners or executives
committed only 23% of
occupational frauds, but they

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caused the largest losses
(USD 337,000).
+ Nearly half of fraud cases
occurred due to:
 Lack of internal controls: 29%.
 Override of existing controls:
20%. 22
 + Organizations that had
higher losses were more
likey to modify their
controls following the
fraud (81%).
+ 75% through
implementation or
modifying management

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review.

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+ Owners or executives
are least likely to be
punished for fraud.

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“The only way to know
how strong you are is to
keep testing your limits.” 

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Superman

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Auditor = Beacon of Ethical Behavior … Really?
+ Auditor is also human.

+ Auditor is subject to the same pressures (culturally, politically, and

organizationally) as everyone else in the enterprise.

+ Maybe Auditor is vulnerable, after all.

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Auditor = Beware of Our Own Ethical Lapses
+ #1. You audit an area for which you were previously
responsible and find major control deficiencies related to
the period over which you exercised control. You had
not known about the control deficiencies at the time.
Would you report them?
+ #2. Your annual risk assessment identifies a key business
process related to how the company performs during the
holiday season. Scheduling the audit for the coming year
during the holiday season means that you and your team
will have to sacrifice the holidays with your family.
Would you schedule it anyway?
+ #3. You audit an area in which a family member or close
friend has key management responsibilities. You identify
major problems. ​What do you do?
+ #4. You are in a rotational assignment in internal audit
and slated to shift into another business unit in a year.
You just audited the business unit in which you most
want to work, but have some critical findings. Do you
report them or sit on them?
+ #5. You are the Chief Audit Executive (CAE) of a top
public listed company. Your audit team just identified
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potential violations of the Corrupt Practices Act.
Disclosure would create havoc and bring disrepute to the
company. Do you finalize the report and send it to the
Audit Committee?
+ #6. You just completed an audit of the company’s
expense reporting processes and found several violations
of travel expense policies. You know that you do not
personally comply with these policies. Do you call out
noncompliance anyway?
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Thank you

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Indra Widjaja

Webinar Series
12 November 2022 Nathaniel Hawthorne
• 4 July 1804 – 19 May 1864.
• An American novelist and short story writer focusing on
history, morality and religion.