It is not difficult to find stories to read about business process and internal control failures happening all around us … in entities of all types and sizes.

And doesn’t every case of failure start and end with people?

The answer to that is clearly “yes.”

It starts with people who make decisions to design and implement (or not) proper control systems that ensure that the organization is protected, that its assets are used in efficient and effective ways, and that the organization is not adversely impacted through someone’s fraudulent activities. It then moves to the people responsible for ensuring that the control processes routinely operate and remain effective as the organization changes and responds to their ever evolving environment.

And then it moves to how to counter those people who might corrupt the system. Remember that corruption as described by the Association of Certified Fraud Examiners (ACFE) is “any scheme in which a person uses his or her influence in a business transaction to obtain an unauthorized benefit contrary to that person’s duty to his or her employer.” ACFE’s “2008 ACFE Report to the National on Occupational Fraud and Abuse” indicates that that the most likely perpetrators of fraud are executive/upper management (29.1 percent) and accounting personnel (15.5 percent). Go figure!

So how does it end up? Well, again according to the ACFE, the most frequent way that fraud is discovered is through people providing tips and complaints. The majority of those come from employees, but they also come from customers and vendors, among others.

With all that being said, it is critical to never lose sight of the importance of keeping the people aspect of any business process and internal control system in the front of your mind. People are the biggest factor in your business processes, internal control systems, and continuous controls monitoring operations, and in finding fraud. ###