Fraud, Compliance & Integrity Risk During a Crisis and a Downturn

London Overground with the City of London skyscrapers in the background (including The Gerkhin)

As a crisis unfolds, like Coronavirus and markets decline globally, fraudsters will be adapting, and new risks will emerge, and some risks will increase.

Remember, white-collar criminals adapt by profiling us so that they can exploit our weaknesses. So companies need to develop a strategy that enables the deployment of appropriate tactics to manage these new or increased risks.

This writing explores some fraud, compliance, and integrity risks and is intended to provoke discussion.

The Human Factor –”Just One Time”


©Copyright 2020 Advanced Meta-Model of Fraud – Jonathan T. Marks, Richard Riley Ph.D., and Scott Fleming Ph.D.

A crisis can and often does increase the pressure on senior management and, of course, salespeople to meet their sales targets! Deviant behavior, like overriding or circumventing controls “just one time”, is easily justified.  So it should go without saying that companies and their boards need to recalibrate and, in most cases, increase their oversight today and after the crisis until things stabilize.

Why? Because of the likely mindset to maintain and if that’s not possible, make up for lost opportunities!

©Copyright 2020

Live Human Interaction

A crisis could and today have restricted “live” human interaction, thus performing investigations, maintaining the compliance program, internal auditing, and conducting other procedures could be challenging.

Some areas that we should focus on:

Note: The Audit Committee will more likely than not will be focused on scenario plans, stress tests, and the company’s enterprise-wide risk management program. They will need to understand and then explore with senior management the plan for monitoring and dealing with emerging and increased risks and the possible impact.

I have some creative ways to tackle some of the challenges above. So please reach out when you are ready.

Other Risks that Should be Considered by Boards and Senior Leadership

While not all-inclusive, the list below could increase risk:


Most employee frauds are opportunistic and not well-planned, ingenious schemes.

During a crisis the speed of change is such that opportunities to commit fraud will be prevalent. Thus, recognizing risks and staying vigilant is a must to reduce those opportunities.

Lastly, remember trust can be, and often is, a professional hazard!  To read my writing on Skepticism click here.

I welcome you thoughts and ideas.  Stay safe and be well.


Jonathan T. Marks, CPA, CFF, CITP, CGMA, CFE and NACD Board Fellow