Stockholm University
Fraud Risk Management Syllabus
Preliminary: Subject To Change
A. COURSE DESCRIPTION
This course involves a careful examination of the phenomena of fraud and corruption in an
organizational context. By developing an understanding of the conditions which allow fraud or
corruption to happen, or even motivate them, we can draw conclusions about what organizations
can and should do in order make risks less likely, and reduce the negative impact of incidents which
occur.
The course will be at the introduction level, and there are no prior course requirements. We believe
that students will find the material interesting and challenging. The concepts themselves are not
difficult, and students who apply themselves will do well.
B. ORGANIZATION OF THE COURSE
The course will include a serious of lectures, individual assignments and group work. Students will be
assigned to groups consisting of approximately 5 students each. During the first week, classes will
meet Monday and Wednesday, with both a morning and an afternoon session, and on Friday, a
morning session only.
During the second week, classes will again meet on Monday and Wednesday, both morning and
afternoon sessions. On Friday, June 24th, a full day field trip will take place where the class will travel
to one of the islands in the Stockholm archipelago.
Two or three short quizzes will be held during the two weeks, and a final examination on the topics
covered will be held on Wednesday afternoon of the second week.
After the two week lecture and group work period, students will choose among several research
topics and individually prepare a paper which will be submitted to the instructor to complete the
course. The research paper may be submitted to the instructor in outline or first draft form up until
July 1st, after which they will be returned with comments.
C. COURSE OBJECTIVES
The general objective is to introduce students to fraud risk management. Fraud is historically one of
the most underestimated and poorly managed risks that organizations face. This is somewhat
surprising, considering that fraud is an ancient risk; it has always been with us. It is also very
common; one can hardly pick up a newspaper without reading about some fraud scandal. We have
also seen catastrophic frauds, and fraud is one of the contributing factors to the financial crisis from
which the world is still recovering. Yet until recently, Fraud Risk Management has not been on the
business school curriculum. As a consequence, the current generation of managers are for the most
part ill equipped to deal with the risk of fraud. Corruption is distinct from fraud, but is similar in many
ways and we will treat it as part of fraud for the purposes of this course.
The specific objectives of this course include:
 Introduce fraud risk, and how it differs from other risks in the organization
 Understand individual and organizational factors that increase fraud risk
 Examine the components of a fraud risk management system.
Summer Program 2011
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Stockholm University
Fraud Risk Management Syllabus
Preliminary: Subject To Change
D. COURSE TOPICS
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The nature of deception and fraud
Definitions of Fraud and Corruption
The Fraud Triangle
Theory of Rationalization
The myth of amoral business
Moral Muteness
Mystification
A Holistic Fraud Risk management concept
Culture, Code of Conduct and Awareness Training
Aligning employees’ motivations with organizational objectives
Preventive and Detective Controls
Communication Channels and Whistleblowers
Managing an Investigation.
E. REQUIRED TEXT
The Anatomy of Fraud and Corruption /Brytting, Minogue, Morino. Note that chapters 16-19 will
not be covered in the course. Books may be ordered by enrolled students at a 20% discount from
the UK publisher from March 1 – June 1 using a promotion code that will be provided.
Books will also be available at approximately the same price from the University of Stockholm
bookstore or from the instructor.
Some additional material covering risk management and internal control techniques will be
distributed free of charge during the course.
F.GRADING PLAN
Coursework will be weighted as follows:
1.
2.
3.
4.
5.
Attendance
Quizzes
Group Assignments
Final Exam
Written Assignment
Total
Summer Program 2011
10%
20%
20%
25%
25%
100%
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Stockholm University
Fraud Risk Management Syllabus
Preliminary: Subject To Change
Group work will consist mainly of case studies related to the topics being discussed, where
students will be asked to analyze the material, identify issues and propose actions. All
materials necessary for the group study work will be distributed.
Two short quizzes will be given to test student’s knowledge of the materials presented in
lectures or reading assignments. Each quiz will take no more than 15 minutes to complete.
The Final Exam will take approximately one hour to complete, and will consist of both
multiple choice questions and written descriptive answers.
Several alternative subjects will be presented, and each student will select one subject for
their individual written assignment. Students will be asked to research historical facts about
their selected area, and discuss them in relation to the concepts presented during the
course. The subjects selected will be suitable for internet or library research. The papers
presented will consist of between 1500 – 2500 words.
F. TENTATIVE SCHEDULE
Date
Day
Time
Chapters 31
(5 pages)
July
18
Mon
July
19
Mon
13:30 15:00
Chapter 4
(13 pages)
July
20
Wed
09:00 11:00
Chapters 5-7
(50 pages)
July
21
Wed
13:30 15:00
Chapters 7-8
(8 pages)
July
22
Fri
09:00 11:00
Chapter 9
(20 pages)
1
09:00 11:00
Advance
reading
Class Activity
Practical matters, Introductions, Course Agenda,
Expectations
The nature of Fraud and Corruption – What
does it cost? Who commits fraud? Why? How?
Group work: Read and discuss chapter 4
The construction of fraud as a social fact; What
is it that makes us call an act “fraud” or
“corruption”? We look at cultural issues,
including internal organizational culture. Are
there organizational factors that cause us to
overlook fraud and corruption going on under
our noses? Group study assignment.
The Fraud Triangle; opportunity, need and
rationalization. The myth of amoral business –
The dangers of “common sense” The Corporate
Psychopath
Group work: Read and Discuss chapters 7-8
Discussion of group work from Monday’s
assignment. Trust in Organizations. Professional
cynicism. Group Case study assignment
Establishing the cultural norm. The value of
mystification and investigation. Delivering
“morale”. Remove the taboo, make it safe to
discuss fraud. The good bureaucracy.
Chapter 3 will be distributed in advance to students enrolled in the course
Summer Program 2011
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Stockholm University
Fraud Risk Management Syllabus
Preliminary: Subject To Change
July
25
Mon
09:00 11:00
Chapters 1012
(25 pages)
July
26
Mon
13:30 15:00
Material to be
distributed
July
27
Wed
09:00 11:00
Chapters 1315
(40 pages)
July
28
Wed
13:30 15:00
July
29
Fri
All day
Summer Program 2011
Chapters 2
and 20
(23 pages)
Motivational alignment. Group Case study
assignment.
Experiential learning as an anti-fraud tool. The
Drama metaphor. We will also watch a short
film / dramatisation of a fraud scenario.
Risk identification and internal control
techniques.
A high level overview. The
construction of preventive and detective
controls, and their inherent limitations.
Communication – the importance of Fraud
Awareness Training. Design and distribution of
the Code of Conduct.
Final Exam (about 1 hour)
Fraud Cases, Whistleblowing and Incident
Management
Presentation of topics for written assignments
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