Using Appreciative Inquiry in Fraud Prevention and Detection

Transcription

1 Using Appreciative Inquiry in Fraud Prevention and Detection 1. What is Appreciative Inquiry? 2. Using AI in Fraud Awareness 3. Using AI in Fraud Prevention 4. Using AI in Fraud Detection

2 Ground Rules Keep an open mind We are learning a new tool Only positive thoughts are allowed 2

3 Level 3 Conscious Competence 3

4 Appreciative Introduction What would you describe as being a peak experience or high point in your lifepersonal or professional? What do you value most about your work? Your organization? What are the core factors that gives life to your organization, without which the organization would cease to exist? Without Being Modest

5 Traditional Fraud Audit Approach Assumptions The Fraud Triangle always exist in an organization Internal controls will break down over time The best approach to identify frauds is by performing a fraud audit If we find a broken area and fix it, the whole problem will be fixed. Unintended Consequences Reinforces the culture of suspicions Produces negative vocabulary Lack of creativity/innovation Lack of holistic view

6 The Fraud Triangle 6

7 COSO Internal Controls AI As A Problem-solving Tool

8 Exercise 1 Identify Weaknesses AI As A Problem-solving Tool

9 How to shift from What s Wrong? to What s Right? Avoid the all or nothing Realize the difference between being right and being happy Avoid over generalizing a situation focus on details

10 Exercise 2 Identify Strengths AI As A Problem-solving Tool

11 Shifting from What s Wrong? to What s Right? What is working well in your organization? When is your organization performing at its best? When is your organization s internal controls performing at its best?

12 What is Appreciative Inquiry (AI)? It s a technique based on positive psychology that focuses on strengths rather than deficits. Appreciate Affirming past and present strengths Inquire To explore and discover Reframing our mental models: from deficits to affirmative models

13 From Deficits to Strengths: Fraud Audit from the AI Perspective Discovery: The strengths of IA, Risk Management, People, etc. Dream: Based on these collective strengths, how could we build a zerotolerance fraud organization? Design: How best do we design our future? Destiny: Let s envision a new collaborative integrated team that fully support our organization s ERM framework.

14 The Eight Principles of AI 1. Words Create Worlds The Constructionist 2. Inquiry Creates Change The Simultaneity 3. We Can Choose What We Study The Poetic 4. Image Inspire Action The Anticipatory 5. Positive Questions Lead To Positive Change The Positive 6. Wholeness Brings Out The Best The Wholeness 7. Acting As If Is Self-Fulfilling The Enactment 8. Free Choice Liberates Power The Free Choice

15 How to frame positive questions Use positive experiences to help the person realize their owns skills and ambitions Realize how you ask the question will set a direction Be pleasant and positive

16 Framing Positive Questions Exercise 3: What s the best thing that happened to you today? Exercise 4: What was the best job you ve had? Exercise 5: What do you value most in a job?

17 How to engage people in positive thought Make them focus on the positive side of things and avoid negative phrasings Encourage the positives Make them feel better and proud about themselves

18 Engaging People in Positive Thought Exercise 6: What first attracted to your work? Exercise 7: What do you admire about your organization?

19 Objective: Understanding the Practice of Appreciative Inquiry We live in a world our questions create Change begins with the very first question we ask Our questions determine the results we get The more positive our question, the more it will create the possible Our questions create movement and change I want to encourage you, as a leader, to absorb AI for a while. Listen to this presentation, and then give it some time. Use it to reflect, review, and renew!

20 A Definition Phase Develop the inquiry goals including the framing of the question and the inquiry protocol, the participation strategy, and the project management structure

21 Create a Topic of Inquiry Exercise 8: What would you like to happen in your organization/ department?

22 Topics of Inquiry Traditional Title Time management Change management Conflict management Performance management Sexual harassment Customer complaints Lost baggage complaints Low morale Affirmative Topic Valuing time Creating change positively Respectful relationships Peak performance Positive cross-gender relationships Magnetic customer connections Exceptional arrival experience Stories of passionate enthusiasm

23 Discover People talk to one another, usually via structured interviews, to discover the times when the organization is at its best. These stories are told as richly as possible and from them people start to discover the positive core of the organization, what gives life to it when it is at its best. People appreciate themselves and their colleagues and significant transformations begin to occur.

24 POSITIVE CORE What aspect of the positive core of your organization do you love most? (i.e., most interesting, most meaningful, most satisfying?) Describe one outstanding contribution or achievement of the positive core? What made it outstanding? What organizational factors helped to create or support the achievement?

25 Dream Identifying images of a desirable future based on the collective strengths of the groups. People develop a vision of the future based on a past success. What will the project/program/portfolio look like 3, 5, 10 years from now? Visions shared in words and/or visual images. Groups share their visions and images.

26 Wishes What are the three things that you do best that you like to perpetuate? What three wishes would you like to make to transform your current organization? Who do you wish to show up in your life?

27 Dream of Your Future Organization Developing a vision for the future based on past success Identifying images of a desirable future What will your organization look like 5, 10 years from now? Visions share in words/images Groups share their visions and images What do you tell the reporter about the future state of your organization?

28 Design Translating the vision into actionable statements and steps. Develop provocative propositions for themes from stories and visions. The propositions are stated in affirmative and present tense. Represent the organization s social architecture (culture, leadership, policies, business processes, communication, systems, strategy, structure, relationships

29 DESIGN Design (Innovate, i.e. straddling bus) Identifying images of a desirable future Develop provocative propositions Stretch the imagination Go beyond the obvious Use affirmative statement

30 Destiny Making the propositions become reality. This is an iterative process. Participants select those propositions they wish to work on. Monitor, evaluate, and celebrate progress. Keep the conversation going.

31 DESTINY Phase 4 - Destiny (Turning into realities ) Please select those opportunities that they wish to work on Monitor, evaluate, and celebrate progress Keep the conversation going

32 Traditional Vs AI Fraud Prevention Traditional Identify the issue or problem We ve got a problem mindset Determine Root Causes Brainstorm solutions and analyze Develop action plans Appreciative Inquiry Talk stories and find the stories and the positive cores - Discovery Analyze patterns of success so that we can repeat them - Dream Every living system has something that works well already - Design Expand and amplify that which works - Destiny The role of leadership is to build on organizational strengths so that weaknesses seem irrelevant. (Peter Drucker)

33 AI as a Fraud Awareness Tool Socializing Fraud Awareness by looking at what's going right Discover Dream Design Destiny

34 AI As A Problem-solving Tool The ERM FAN

35 AI as a Fraud Prevention Tool Socializing Fraud Prevention Topics of Inquiry by looking at what's going right Discover Dream Design Destiny

36 Top Five Perceived Barriers to Internal Audit Involvement in Risk Management (Source: The IIA Research Foundation) PERCEIVED BARRIERS Perception that this is beyond the scope of internal auditing Lack of Management Support Lack of coordination or clarity of roles with other risk control units Lack of knowledge within internal audit of risk management practices and techniques Need for training for internal audit staff AI Topic of Inquiry Embracing the ERM Fan through positive dialogues Positive Management-IA relationships Magnetic inter-departmental connections Enhancing risk management knowledge through mutual collaboration Continuous learning through cross-pollination of staff

37 AI as a Fraud Detection Tool Socializing Fraud Detection Topics of Inquiry by looking at what's going right Discover Dream Design Destiny

38 Appreciative Closing AI is not just a positive thinking but it s an overall philosophy of achieving an internal audit engagement project objective using the techniques that are uniquely AI. An internal audit objective could be as grand as a transformation or could be as practical as a fraud audit. Appreciative Inquiry helps integrate our existing traditional fraud audit knowledge with AI approaches.