Fraud: the human factor; Many discount behavioral explanations for fraud, but as the incidence of fraud continues to grow, placing the spotlight on behavioral factors may be an important approach not only to detection, but to deterrence as well.

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Fraud: the human factor; Many discount behavioral explanations for fraud, but as the incidence of fraud continues to grow, placing the spotlight on behavioral factors may be an important approach not only to detection, but to deterrence as well.

Eighty percent of respondents to a National Association of Corporate Directors (NACD) survey of public company audit committees felt that failure resulting from poor risk management couldn't happen to them. However, 50 percent thought it could happen to other companies.

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This feeling of relative "invincibility" is similar to the statistically impossible "Lake Wobegon" effect--where "all the women are strong, all the men are good-looking and all the children are above average." Could this Lake Wobegon effect--which results from the human tendency to overestimate one's achievements and capabilities in relation to others--ext...

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