(By Joe Koletar<\/a>) My friend and colleague, Daven Morrison, recently posted a piece on deception (see below) and why it is quite common human behavior, to one degree or another.<\/span><\/p>\n

We see deception in many areas of our lives. A child may \u201cmake up\u201d an imaginary friend they can talk to and play with. Little girls may treat a doll as if it were their child. It is cute and correctly perceived as a normal part of \u201cgrowing up.\u201d<\/span>\u00a0<\/span><\/p>\n

Later in life women, and increasingly men, may use \u201cmake up\u201d in an adult fashion. Women apply make up to enhance or change their appearance. I once dated a professional model who, by adjusting her hair and make-up, could look like two different people in the space of twenty-four hours. <\/span>Hollywood<\/span> can use make up and other devices to make an actor look younger, older, or achieve the physical characteristics of a monster.<\/span><\/span>\u00a0<\/span><\/p>\n

But, like many things, make up can go too far. Human Resources professionals routinely report that about thirty percent of resumes contain material misstatements \u2013 covering up gaps in employment, falsifying credentials, over-stating job achievements, or misstating reasons for leaving a prior employment. And employers are often complicit in dealing with these issues, when discovered. They may allow an employee to resign \u201cfor personal reasons,\u201d because stating the truth would be \u201ctoo messy.\u201d<\/span>\u00a0<\/span><\/p>\n

Is it any wonder then that some people in the business world may overstate financial performance? We know all too well that it happens with some frequency, but the issue is why does it happen? Is it a form of arrested psychological development, or is it a calculated strategy that \u201cit worked before; it can work again?\u201d<\/span><\/p>\n

In the case of Nixon, I’ve read reports that he served as a Navy\u00a0officer in the Pacific.\u00a0 When off-duty aboard a ship, there is little to do, except smoke, drink coffee, or gamble.\u00a0 Nixon was an excellent poker player and came home after the war with about $7,000 in cash, a huge amount in 1945.\u00a0 His specialty at poker was…….bluffing.\u00a0 A form of classic deception.\u00a0 And when Watergate hit, he tried his specialty one time too often.\u00a0<\/span><\/p>\n

Such considerations have, to date, been little addressed in the financial literature. Those dealing with or interested in such behavior might benefit by better-informing themselves of the mental processes that may at work. For those experienced in the field an all-too-common scenario is encountered time and again. We pay immediate attention to failure and spend significant time and effort to determine its causes. At the same time, we rarely spend one-tenth as much effort looking at what caused apparent \u201csuccess.\u201d We learn about it when it is too late \u2013 think of Enron, et al.<\/span>\u00a0<\/span><\/p>\n

Does this mean the watchdogs \u2013 the accountants and regulators \u2013 are corrupt? No. In the vast majority of instances they are not. They just fell into the all-too-human trap of not looking closely enough behind the \u201cmake up.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

(By Joe Koletar) My friend and colleague, Daven Morrison, recently posted a piece on deception (see below) and why it is quite common human behavior, to one degree or another. We see deception in many areas of our lives. A child may \u201cmake up\u201d an imaginary friend they can talk to and play with. Little […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-202","post","type-post","status-publish","format-standard","hentry","category-audit"],"_links":{"self":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=202"}],"version-history":[{"count":6,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/202\/revisions"}],"predecessor-version":[{"id":368,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/202\/revisions\/368"}],"wp:attachment":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=202"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=202"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=202"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}