{"id":256,"date":"2015-01-02T17:58:26","date_gmt":"2015-01-02T21:58:26","guid":{"rendered":"http:\/\/www.bringingfreudtofraud.com\/?p=256"},"modified":"2015-03-06T13:06:21","modified_gmt":"2015-03-06T17:06:21","slug":"technological-giants-ethical-infants-continued","status":"publish","type":"post","link":"https:\/\/bringingfreudtofraud.com\/?p=256","title":{"rendered":"\u201cTechnological Giants, Ethical Infants (Continued)\u201d"},"content":{"rendered":"

Joe Koletar notes an article (The Economist, November 22, 2014, page 68), \u201cLying, Cheating Bankers.\u201d<\/span>\u00a0\u00a0 <\/span>He writes, \u201cResearchers split a group of 128 bankers with an average of twelve years\u2019 banking experience into two groups.<\/span>\u00a0 <\/span>The control group was asked a series of harmless questions about how much they watched television and similar questions.<\/span>\u00a0 <\/span>The test group was asked a series of questions about their banking careers.<\/span>\u00a0 <\/span>All of this was via computer.<\/span>\u00a0 <\/span>Each group was then asked to privately report the results of a remote and SELF-ADMINISTERED test.<\/span>\u00a0 <\/span>They were to predict the results of flipping a coin ten times.<\/span>\u00a0 <\/span>The accuracy of their predictions would be rewarded:<\/span>\u00a0 <\/span>When they guessed correctly, they received an immediate $20 per flip ($200 for ten out of ten).<\/span>\u00a0 <\/span>The control group reported a 52% success rate, slightly above the statistical norm of 50%.<\/span>\u00a0 <\/span>The TEST group reported a 58% success rate, the odds of which are 1:1000.<\/span>\u00a0 <\/span>So, questions about their banking careers may have shifted them into the psychology of maximizing profits—in short, they\u2019d appear to be more prone to cheating.<\/span><\/span><\/p>\n

This report ignited several reactions.<\/span><\/p>\n

Daven Morrison, MD:<\/span>\u00a0 <\/span>\u201cLove the audacity {displayed}.<\/span>\u00a0 <\/span>Both groups cheated.<\/span>\u00a0 <\/span>But among those in the banking frame of mind, the tendency to cheat increased 4X!\u201d<\/span><\/span><\/p>\n

Sri Ramamoorti:<\/span>\u00a0 <\/span>\u201cIn 2004, I wrote (with Dr. Marcia Weidenmier of Mississippi State) a review of the pervasive impact of information technology on internal auditing\u2026 A quote from that piece: \u2018What we have today are technological giants but ethical infants.\u2019<\/span>\u00a0 <\/span>I think this remark applies to select members of the financial services industry with great force\u2026\u201d<\/span><\/span><\/p>\n

Daven Morrison:<\/span>\u00a0 <\/span>\u201cYou\u2019re the king of quotes, Sri.<\/span>\u00a0 <\/span>\u2018Ethical infants\u2019 fits JP Morgan Chase: They were all about how to make money, little about managing the risk.<\/span>\u00a0 <\/span>Even for the risk manager herself!<\/span>\u00a0 <\/span>We need tee-shirts imprinted with \u2018WHERE\u2019S THE OUTRAGE?\u2019\u201d<\/span><\/span><\/p>\n

Joe Koletar:<\/span>\u00a0 <\/span>\u201cSri, great quote.<\/span>\u00a0 <\/span>I have a great cartoon that shows a corporate conference room with one empty seat at the table.<\/span>\u00a0 <\/span>The chairman is saying, \u2018Wilson won\u2019t be with us today.<\/span>\u00a0 <\/span>He called in ethical.\u2019<\/span><\/span><\/p>\n

These anecdotes are signals of what seems to be happening with at least part of our business culture.<\/span>\u00a0 <\/span>More telling examples: The Wall Street Journal of December 12, 2014, in an article, \u2018Big Banks Slapped for Offering Glowing Research to Win IPO:\u2019 <\/span>\u00a0<\/span>includes these quotes— \u2018I would crawl on broken glass dragging my exposed junk to get this deal.\u2019<\/span>\u00a0 <\/span>\u2018My whole life is about posturing for the Toys R Us deal.\u2019\u201d Glowing examples of questionable values.<\/span><\/span><\/p>\n

Values drive choices.<\/span>\u00a0 <\/span>Cultures help to shape values.<\/span>\u00a0 <\/span>The longer-term implications of these trends are troubling.<\/span><\/span><\/p>\n

Join us for more insights into behavioral forensics (behind fraud and similar white collar crimes) from the authors of <\/span>ABCs of Behavioral Forensics<\/span><\/span> (Wiley, 2013): Sri Ramamoorti, Ph. D., Daven Morrison, M.D., and Joe Koletar, D.P.A., along with Vic Hartman, J.D.\u00a0 These distinguished experts come from the disciplines of psychology, medicine, accounting, law, and law enforcement to explain and prevent fraud.\u00a0 Because we are inspired to bring to light and address the fraud problems in today’s headlines, we encourage our readers to come back and revisit us regularly at BringingFreudtoFraud.com. <\/span><\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Joe Koletar notes an article (The Economist, November 22, 2014, page 68), \u201cLying, Cheating Bankers.\u201d\u00a0\u00a0 He writes, \u201cResearchers split a group of 128 bankers with an average of twelve years\u2019 banking experience into two groups.\u00a0 The control group was asked a series of harmless questions about how much they watched television and similar questions.\u00a0 The … Continue reading \u201cTechnological Giants, Ethical Infants (Continued)\u201d<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-256","post","type-post","status-publish","format-standard","hentry","category-audit"],"_links":{"self":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/256","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=256"}],"version-history":[{"count":3,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/256\/revisions"}],"predecessor-version":[{"id":337,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=\/wp\/v2\/posts\/256\/revisions\/337"}],"wp:attachment":[{"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bringingfreudtofraud.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}