The enemy within
Fraud within companies is a risk that can never be eliminated, just managed
BUSINESS has always been plagued by fraud:
witness the South Sea Company in the 1710s or Charles Ponzi's Securities Exchange Company in 1920 or the Enron and WorldCom scandals in the early 2000s.
Ambitious fraudsters are attracted to businesses for the same reason that Willie Sutton, a contemporary of Ponzi, reportedly said he robbed banks: Because that's where the money is.
Some frauds are committed by people at the top such as Bernard Madoff or Allen Stanford.
一些欺诈案是由Bernard Madoff或Allen Stanford这样的组织高层人员犯下的，
Others are committed by hired-hands lower down the organisation.
But all frauds involve abusing people's trust and diverting corporate resources for personal ends.
Fraud by wayward employees, be they high or low, can never be eliminated.
Directors and executives can, however, treat it like any other unavoidable risk, and manage it professionally.
The risk is particularly acute at the moment.
Companies are straining the bonds of loyalty.
They are making ever more use of contractors and temporary workers.
They are putting more pressure on employees to hit targets; they are also holding down the wages of the majority of workers while increasing the boss's pay.
This is all happening at a time when economic activity is shifting to the emerging world and to the internet.
Kroll, a security consultant, found that 70% of the companies that it studied were affected by fraud in 2013, up from 61% in the previous year.
At the same time the punishment is harsher than ever.
Companies nowadays run the risk of being held liable for their employees' misbehaviour unless they can show they had done their best to prevent it.
Directors who play even the smallest role in frauds can now go to prison.
America's Foreign Corrupt Practices Act and its European imitators have made a serious crime of something once seen as normal business practice: bribing foreigners.
Companies infected by fraud can incur all sorts of other costs.
Their licences to trade may be withdrawn, they may be barred from bidding for government work and they may be subjected to online campaigns urging customers to boycott them.
What can companies do to uncover internal scams?
A new book, Corporate Fraud: the Human Factor, by Maryam Hussain, an investigator at EY, an accounting firm, provides a timely guide.
One answer is to look for the telltale signs.
Some of the biggest corporate tricksters were people whose flamboyant personalities often raised suspicions: think of Robert Maxwell, or Augustus Melmotte in Anthony Trollope's The Way We Live Now, perhaps the best novel about corporate fraud.
一些大名鼎鼎的企业诈骗者，通常也会具备一些令人生疑的浮夸性格：想想Robert Maxwell吧，或是看一下Anthony Trollope的《我们现在生活的方式》，它可能是最好的企业欺诈题材的小说。
Boards have a duty to pluck up the courage to challenge such larger-than-life bosses.
However, most corporate fraudsters do not have swishing reptilian tails as a giveaway sign.
In many instances they are not borderline psychopaths, just ordinary people gone wrong.
Frequently, they start with small crimes and then engage in ever bigger misdemeanours to conceal their wrongdoing.
Nick Leeson, who destroyed Barings Bank by losing 862m in bad bets on derivatives, said, It all started when I tried to cover for a junior colleague who had lost 20,000.
Ramalinga Raju, the chairman of Satyam, who admitted to inflating the computer-services company's revenues by 1 billion, said, It was like riding a tiger, not knowing how to get off without being eaten.
A second answer is to put procedures in place to detect frauds.
The Sarbanes-Oxley law passed in America after the Enron and WorldCom frauds requires the boards of public companies to commission independent audits of their internal financial controls.
But rigorous procedures can easily lure companies into a false sense of security.
The employees most affected by those rules may be precisely the ones most capable of finding ways around them, as was the case with Mr Leeson and Jerme Kerviel, a renegade trader at Societe Generale.
那些受严格规定影响最大的员工也恰恰会是最有能力钻空子的人， Slesson先生以及ociete Generale公司变节的交易员Jer?me Kerviel都是这样的例子。
Many companies seek reassurance that all is well by installing cyber-security tools to monitor employees' e-mails and internal accounting systems for suspicious activity.
But fraudsters are often quicker at harnessing technology to disguise what they are up to than companies are at using it to spot them.
Those running scams may also be skilled at tricking colleagues into giving them passwords—a technique Edward Snowden may have exploited to devastating effect.
Praising the bearers of bad news
The most powerful weapon against fraud is not an algorithm or a checklist but a whistleblower.
The Association of Certified Fraud Examiners calculates that three times as many frauds are discovered by tip-offs than by any other method.
It also notes that firms with fraud hotlines, which staff can call anonymously, suffer smaller losses from fraud, and cut by seven months the exposure gap between the start of an illicit scheme and its discovery.
Governments are increasingly providing whistleblowers with legal protection and financial incentives:
America's Securities and Exchange Commission has created a 450m fund to reward them.
Companies that dither, blather or launch half-hearted inquiries when presented with evidence of employee misconduct often end up regretting it.
JPMorgan Chase lost billions in its London Whale rogue-trader scandal, initially dismissed by the bank's boss, Jamie Dimon, as a tempest in a teapot.
Besides doing more to encourage whistleblowers, businesses must take decisive action to close the exposure gap.
A botched investigation can tip off a fraudster and make it easy for him to cover his tracks.
A suspicion of deliberate foot-dragging can render an entire company vulnerable.
The damage done by corporate fraud can last long after the culprits have been identified.