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Consumer behaviour is about how consumers behave in situations involving goods, services, ideas and experiences. The situations could cover pre-purchase, purchase and post-purchase.
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- PEOPLE ARE GREEDY—HOW GREEDY ARE YOU?
- ONE‐MINUTE FRAUD MYSTERY: TRUST US INC.
- Pentagon
- THE INCREASED RISK OF FRAUD LOSS
- DIVERGENT AND CONVERGENT THINKING
- Brainstorming
- Keeping a Journal or Writing It Down
- Painting a Picture
- EXHIBIT 1.5
- CRITICAL THINKING REQUIRES CRITICAL QUESTIONS
- General (Open‐Ended) Questions
- Specific (Closed‐Ended) Questions
- EXHIBIT 1.6
- They have very close relationships with customers or vendors
- THE MORAL COMPASS
- THE ELEMENTS OF FRAUD: MIRD
- CONFUSION ABOUT RESPONSIBILITY
- COMPLEXITY
- SUMMARY
BETTER UNDERSTAND THE MANY defi nitions of fraud, we begin our journey by learning what fraud looks like and why you need to ask many questions to gain a clear picture of the facts. You need to begin looking through a different set of eyes: not your own, but those of the fraudster.
Think about the people in your organization who have access to its fi nancial resources and the value (money or otherwise) that is at risk with informed skepticism. Make sure the facts and fi ndings support the organization’s people in trusted positions. The value of informed skepticism lies in the level of details that support your fi ndings. This...
This one‐minute fraud mystery is designed to help you begin thinking diver-gently (“outside the box”) so you learn how to develop solutions under less than ideal circumstances. Think about the situation presented here as you read the rest of the chapter. You are the owner of Trust Us Inc. Betty Favor, one of the organization’s most trusted employ...
Pressure Rationalization Opportunity Competence Situation Situation No matter how evolved our become, the recurring theme will The recurring theme here is factor there would be no fraud. There rationalization, no opportunity, and Anyone can be a fraudster, as we with pressure, rationalization, other terms we have used so far fraud. The fraud pentag...
There are common challenges in an organization that may inadvertently increase its risk of fraud loss. The hurdles an organization may face in trying to avoid fraud are innumerable, and this list is merely a starting point for deal-ing with such challenges, which include the following: The organization may not have clearly delineated markers for ac...
Fraud does not occur in a silo or a vacuum, and neither should its deterrence, prevention, or detection. With a divergent approach you will be able to break down an event or an allegation into its various phases and gain insight into the many aspects of fraud risk within each business process. Divergent thinking can occur only in a spontaneous, fre...
Brainstorming is a technique used to generate ideas on a particular topic or concept in an unstructured, unrestricted, and free‐form manner. The goal is to generate as many ideas as possible in a short amount of time. In a successful brainstorming session, each idea stimulates other ideas. Some ideas may follow a more logical progression while othe...
Record your mental impressions contemporaneously with your fact‐finding investigation to track the development of your theories and findings. Carry a small memo pad at all times, since thoughts may occur to you at any time. Record your formal observations while actively analyzing the facts or con-ducting inquiries as well as your informal stream‐of...
Paint the picture necessary to facilitate an understanding. Take what is in your mind about a fraud and the ideas you developed from brainstorming and visualize them to create a picture. Transfer the picture in your mind to paper so you can see the people involved. See and appreciate the relationships among the ideas, people, and events to develop ...
Painting a Picture conclusion and, by extension, helps him or her to identify the evidence to sup-port that conclusion. When the evidence needed to support a fraud theory up front has been identifi ed, an effective work plan may be developed to prove what did or did not occur. The more ideas generated, the greater the chance to resolve allegations ...
What are the right critical questions? What types of questions do you think you should be asking while reading the one‐minute fraud mystery and try-ing to work it out? The purpose of this exercise is to assist you in identify-ing questions to ask yourself and others as part of an antifraud project; it is not a primer on interviewing skills or even ...
We need questions to help us develop an understanding of the players involved in a potential fraud as well as an overview of the potential fraud itself. These open‐ended questions are designed to give the illusion of control to the respon-dent. In general, people feel more comfortable when they have the illusion of control over a situation. Therefo...
Close‐ended types of questions are used to narrow and refine the information that has been acquired through open‐ended questions and other means, to form a persistent, tenacious focus. Most interviewers prefer to develop a rapport with the subject before get-ting into the details with them. This portion of an interview is also used to establish cre...
Fraud Human Traits They are deal makers (wheeler‐dealers). Do you feel like every time you speak with these people, it is like being on a game show? What is in it for the deal makers? It’s their way or the highway (dominating and controlling). Do you feel pushed or intimidated into making or supporting a bad decision? Why are the controllers so clo...
(chummy buddies). Do you think that a particular relationship with a business associate or two is creating vulnerability for the organization? Is the relationship based on business interests, personal interests, or both? How is the value in the organization vulnerable because of such relationships? Collusion‐based frauds, which involve more than on...
This section discusses examining your moral compass (a counterpart to the misrepresentations represented by the M in the MIRD acronym, which will be explained in the following section). Does your moral compass zigzag into what we call the Z pattern, or does it follow a straight line? Do you have a Z pattern in your organization? Are the people fol...
As mentioned earlier, MIRD is a useful acronym, not just to remember the important elements of fraud’s defi nition ( misrepresentation , intention , reliance , and damage ) but also to implement a divergent way of thinking. You can use it to understand where people and value meet in an organization and to expose the potential for fraud. Again, t...
Responsibility and fraud prevention, deterrence, and detection go hand in hand. Exposure to fraud risk arises when there are ambiguities related to operational and oversight responsibilities or when there is confl ict between the responsible party and the benefi ting party. The proverbial fox cannot be allowed to guard the henhouse. You cannot have...
Is fraud complex or simple? Our caveman in Exhibit 1.1 states that he used a club to commit fraud, similar to the rationale offered by Willie Sutton, the infamous American bank robber of the early twentieth century. According to legend, when asked why he robbed banks, Sutton said, “Because that’s where the money is.” Frauds do not have to be compl...
Simple embezzlement can lead to signifi cant losses in an organization. The party embezzling faces jail time and can be charged with more than embezzlement alone. Typically, wire fraud, mail fraud, and tax evasion (since embezzlement income is taxable even though illegal) can also be added. An organization can be put out of business by this type of...
In this chapter, I explain the basics of consumer behavior and show you how you can use it to better your marketability, explain your value, and increase your sales.
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We describe three situational factors that can, sepa-rately or together, produce fraudulent behavior. The second path – intuition couple. with rationalization – occurs when the individual is aware the behavior in question is fraudulent. The individua.
- Pamela R. Murphy, M. Tina Dacin
- 2011
10.1 Introduction: How Does Our Psychological Development Affect Our Consumer Behaviour? 11.1 What Are the Effects of Group Pressure on the Individual Consumer? 12.1 How Does Our Social Class Affect What We Buy? How Does Our Culture Affect What We Buy? Similarities across Cultures Differences between Cultures Cultural Values.
This paper outlines the significant factors that impact consumer behaviour throughout the theoretical framework with the topics of: Internal Influences, Motivation, Emotions and Personality and Influencing attitudes and behaviour. These subject matters brings a comprehensive outlook into the complex mind of a consumer by examining individual ...
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Are there psychological theories of fraud?
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Existing theories of fraud provide some insight into how criminals target and exploit people in the online environment; whilst reference to psychological explanations is common, the actual use of established behavioural theories and/or methods in these studies is often limited.
