The Fraud Examiner

“Someone Else Will Do It” — How the Bystander Effect Relates to Fraud

Sophia Carlton, CFE

Manager, Risk Advisory Services, Grant Thornton LLP

“Someone else will do it.” This sentiment probably sounds familiar — we use it plenty in our daily lives, perhaps referring to doing the dishes or other mundane tasks. However, this sentiment can have detrimental effects in many aspects of our lives and to an organization’s fraud risk management program. Enter the bystander effect.

What is the bystander effect?

The term was popularized by Bibb Latané and John Darley after the infamous 1964 Kitty Genovese murder in New York City. Genovese was stabbed to death outside her apartment while onlookers who saw the crime did not step in to help Genovese or call the police. It sounds implausible, even unthinkable in this case. However, this happens more than you might think.

Latané and Darley attributed the bystander effect to the perceived diffusion of responsibility and social influence. Essentially, people are less likely to intervene if there are other people around who they believe will intervene (diffusion of responsibility) and if individuals in a group look to the behavior of the people around them to determine how they should act (social influence).

In other words, the bystander effect goes back to our earlier sentiment, “someone else will do it” or “someone else has already called for help.” The result for Genovese was deadly, but such extreme outcomes are not always present. For example, have you ever witnessed a car accident while driving? Did you stop and call for help right away? Or did you assume someone else already had? It is this diffusion of responsibility that is present and at the core of the bystander effect.

How does the bystander effect relate to fraud?

The bystander effect can directly impact fraud risk management at your organization, as the group dynamics it describes are common themes across organizations grappling with fraud prevention. In my experience, I have found that almost everyone assumes that if fraud were to occur at their organization that someone would catch it. There is this strong belief that even though they might not have proper processes in place to mitigate such risks that it would obviously be caught at some point, by someone, because why wouldn’t it?  This again relates back to our earlier sentiment of “someone else will do it” but in the case of fraud it is “someone else is looking for it” or “someone else will catch it.” We will call this “the fraud effect,” and it has serious consequences for organizations everywhere.

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