The Fraud Examiner
Your Dog is the Worst Dog. Ever.
Science Says We'll Always Be Biased. Make Efforts to Mitigate it.
By Gerard Zack, CFE, CPA, CIA
He barks too loud. Jumps on people. He's the worst dog. But wait – doesn't your dog do the same things? Perhaps. Does that make him the worst dog ever? Maybe your neighbors think so. You're both biased. But do you leave your bias at home? Or, as British politician Lord Molson once said, "I will look at any additional evidence to confirm the opinion to which I have already come."
Do you think that your dedication to finding fraud could ever interfere with your ability to properly conduct a fraud investigation?
Watchdog Seeks Fraud Claim
Take the recent case of Locks of Love and the charity watchdog group Nonprofit Investor. Nonprofit Investor accused Locks of Love of failing to account for $6 million worth of in-kind (noncash) contributions – namely, hair used to make wigs - a pretty strong assertion. I was contacted for comment and, upon review of their IRS Form 990, concluded that while the accounting could be improved, there probably wasn't malfeasance (read the article on ABCnews.com). Nonprofit Investor's methods were shaky at best. Nonprofit Investor used statistics cited from four different sources and from four different years to back into the allegedly "missing" income.
Could it be that the watchdog group, still just two years old, may have wanted to find a discrepancy, to make a splash in a crowded market, to make for a flashy headline suggesting fraud? We'll probably never know. But the point is this: no matter how much we try to be unbiased, some degree of bias is virtually always present. This is not a matter of opinion. A substantial body of research supports it; below are three examples.
Even Experienced Investigators Biased
Two psychology researchers, Christian A. Meissner of Florida International University and Saul M. Kassin from Williams College, put 44 North American law enforcement investigators to the test to assess whether there is a natural bias when it comes to assessing whether someone is being deceptive in an interview setting ("He's guilty!: Investigator Bias in Judgments of Truth and Deception," published in Law and Human Behavior, Vol. 26, No. 5, October 2002). The investigators averaged 13.7 years of experience and had undergone professional training in interviewing and the detection of deception.
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