In this special edition of Count Me In, Kelly Richmond Pope returns to help commemorate Global Ethics Day 2022. We discuss her latest IMA report, Ethics in the 21st Century: Management Accounting Practices for Robust Compliance Programs as well as her forthcoming new book, Fool Me Once: Scams, Stories, and Secrets from the Trillion-Dollar Fraud Industry.  In addition to her role as IMA Research Fellow for Corporate Governance and Ethics, Kelly is professor of forensic accounting at DePaul University as well as the award-winning documentary film maker behind All the Queen’s Horses, an in-depth look at the largest municipal fraud in U.S. history.   

Ethics in the 21st Century: Management Accounting Practices for Robust Compliance Programs
Fool Me Once: Scams, Stories, and Secrets from the Trillion-Dollar Fraud Industry
Connect with Kelly

Full Episode Transcript:
Adam:

Welcome back to Count Me In, the podcast that takes you inside the impactful world of management accounting. This is Adam Larson, and today is a special edition of Count Me In to Celebrate Global Ethics Day 2022. And there's no better guess for such an occasion than Kelly Richmond Pope, IMA's Research Fellow for Corporate Governance and Ethics, professor of forensic accounting at DePaul University, award-winning filmmaker and the author of the forthcoming book, Fool Me Once: Scams Stories and Secrets from the Trillion Dollar Fraud Industry. Kelly and Neha discuss her latest IMA report focus on how management accountants are modernized in compliance in the 21st century. Plus we get a preview of her new book and lots of other updates. It's always interesting when Kelly stops by. So let's start the conversation.

Neha:

Welcome back to Count Me in. Kelly, it's such a pleasure to have you again on the show.

Kelly:

Thanks for having me back.

Neha:

First of all, congratulations on your new report, Ethics in the 21st century that came out recently.

Kelly:

Thank you.

Neha:

Our listeners would love to know what the report is all about.

Kelly:

The report is an overview of how to not only update the compliance function within your organization, but utilizing managerial accountants in those updates. So that's really what the gist of the report is, and we focus on three recommendations on how to update that.

Neha:

Wow, that sounds like a very helpful report for management accountants and finance and accounting professionals around the world. So I've went through the report and saw that you call designing an Effective Compliance program, both an art and a science. Can you help our listeners understand what you mean by that?

Kelly:

Well, you know, it's one of those jargon terms you use a lot and it sounds good when you use it, but now you've asked me a question about it. So let me tell you what I mean by that. I think that the science part is the fact that a lot of programs or organizations are siloed into departments, and so that's the scientific understanding of how we believe organizations should work. So you have your legal department, you have your accounting department, You may have your internal audit department, you may have operations, and all of these departments are siloed. And so I think that that's the science of how we organize companies. But the art is how to utilize all of those different departments together and finding the strengths of each of those groups and bringing them together. So they're one cohesive machine that works together, is the art part of it. And that takes some skill because we don't think about an approach of everyone working together. We think about a very siloed approach of how we work, and I think that when we are trying to update our, our compliance programs, we really need to look at these various silo departments and pull from those so that we can have this one cohesive team

Neha:

That is very insightful and it might be a jargon, but thanks for helping us understand it better. Now of course, most companies try to have some sort of compliance program in place, right? What do you think is the biggest inhibitor when it comes to the effectiveness of these compliance programs?

Kelly:

Well, I think there's two inhibitors. One is compliance. The word compliance triggers people to think, all I need to do is check the box and just get this done. And the second is, most people believe that they don't need it. They believe that they're ethical. They believe that they don't need this type of reinforcement. So you have these two forces that you're battling. And quite honestly, most organizations do have very boring compliance training. And some of it is routine, but there is room for it to be more engaging and more dynamic. So I think the fact that we have conditioned people to think about this as, Oh goodness, here comes compliance again. Just let me get this done. And so we have a level set, a level shift that we need to make within our employee base to even get them excited about what we have around compliance. So you're fighting an uphill battle from the beginning. And so how, what, what can we infuse into compliance to really change that to get more people on board, is the big question.

Neha:

That's so true. Every time I've had conversations in companies, people think compliance training is going to be a snooze fest. So thanks for bringing that up. And can you help us understand how can companies avoid that kind of mentality or perception about compliance training?

Kelly:

Well, I think when compliance, there are some routine things about compliance, and that is true, but I think where you have the opportunity to be creative, you should be. And so my passion area, my research area is around fraud and forensic accounting. And I think that there are areas within the compliance training realm that can lend itself to more creative and more engaging types of approaches. And we tend to not do those. If we do that more, I think that we can change the attitude around compliance and make people more excited about it.

Neha:

Absolutely. Love that, Kelly. Let me pivot from that and ask you another question about whistle blowing. Now, how can companies incentivize internal reporting? So employees feel empowered to speak up when they see any misconduct?

Kelly:

You know, whistle blowing is an interesting topic because again, you have this same uphill battle that you're fighting. And a couple years back, I did a TED Talk entitled how whistleblowers shape history. And one of my motivations around doing the talk, because the whole idea around TED is do you have an idea worth sharing? And so my motivation around doing the talk was because whistleblowers are so valuable to organizations and to society, but how can we encourage more people to come forward when it has such a negative stigma? So I think one of the things that we need to do within our organizations is first remove the stigma and almost celebrate it. And it's, it's hard because despite the benefits that whistle blowers offer us, we tend to not trust them when they come forward. We tend to be skeptical of them, and we then tend to shun them.

Kelly:

And so if that's the, if that's the negative connotation around the action, no one's gonna do it. So if an organization can switch that thinking, and maybe they have an e-newsletter where they're sharing monthly, quarterly, annually, the wins and the value that internal reporters, maybe we even call 'em a different name, but what they've offered to an organization, maybe that is one way that we can encourage people to come forward prizes, whether they're monetary or non monetary, in other words, incentivizing people for their actions always will, will warrant a different type of behavior. So I think that we have to embrace a new attitude around the types of actions that we want our our employees to, to display for us.

Neha:

And that sure is an idea worth sharing. Thanks for sharing that, Kelly. I was thinking about some, some of the things that I read in the report and I came across the term values-based compliance programs. Can you help me understand what that means?

Kelly:

Well, I think the, just using the exact terms, I think that what we have to do, and this is really how we get more buy in from people, from our employees, is we link our training to the values and the missions of our organization. And I think that's one of the ways that you can get more people championing this kind of work. I think that one of the problems is employees and I, you know, I'm an employee too, we often see a huge disconnect between what we're being asked to do and the mission of the organization. So if we can have more of a value based approach to compliance so we can show people the why even more as to why this is important and why we have to do it, I think again, you'll have more engagement, more buy-in, and hopefully even more retention.

Neha:

So true about the why, right? It brings all of it together. And you also talk about other things like gamification and storytelling in compliance training. That sounds really fascinating for a talent development professional like me. Can you tell us how that can be done?

Kelly:

Absolutely. I mean, just think about what if I said this to you, I wanna tell you a story about you automatically get excited because you know that I'm about to take you on a journey versus if I say, I'm gonna tell you the rules of driving, you're going to automatically say, oh goodness, she's about to go through some procedures and policies with me and it's gonna bore me out of my mind. So I think that when we use stories as our foundation, we engage people, The science around storytelling shows us that we see ourselves in the story that we're listening to, and that's why we have more connection to what we're listening to. So I think that when it lends itself appropriate, we should use scenarios, we should use stories, we should use cases when it's appropriate. The problem is, I think a lot of times with compliance, we end up just focusing on the rules and the procedures and we lose the human connection.

Kelly:

And I think what storytelling does is it brings back the human side of what we're trying to convey. You know, I just finished writing a book and it's a book about fraud. It's called Fool Me Once. And one of the things that I really focus on in the book is the human side of fraud. Not just the scheme, but there is often a reason why a person ends up where they're ending up. And so I like to bring the, the human side back to anything, any type of content that I'm training around. And I think with compliance training, there are great stories. I mean, just think about why, just talk about the rule when you can use a story that almost exemplifies a person that broke that rule. Not only is it more interesting, you are talking about the why it's important within your company, and then you're linking it back to the mission of, hopefully you're linking it back to the mission of your organization. So it's, it's a win, win, win for everyone. When I think you can ground your training into a story

Neha:

That's very fascinating, Kelly, you, you write about the human side and when emotions get involved in learning, people do remember their, their stuff so much better. The learning is so much more sticky for them. And you mentioned your book Fool Me Once, would you like to tell us more about it?

Kelly:

Sure. I can talk all day about that. So Fool Me Once is the full title is Fool Me Once: Stories and Lessons Inside the Trillion Dollar Fraud Industry. And it's being published, it'll come out March, 2023 but you can preorder it now, but it's being published by Harvard Business Review Press. And one of the things that I talk about in the book is I use the journey of doing my documentary all the queens horses as really the through story throughout the book. So what I'm talking about is what I do, I use a story to really pull everyone in, everyone that I want to read it. And so as I was doing the book and as I've been interviewing white collar felons and whistle blowers throughout my career and victims of fraud, what I've noticed is why that I've had these different emotions around whistleblowers, victims of fraud and and perpetrators.

Kelly:

And so understanding their why is, is something that the book is all about. And so what I did is I came up with this fraud archetype of whistleblowers, perpetrators and prey. So I'll call 'em perps, prey, and whistle blowers. And so I argue that there are different types of perpetrators. There's intentional perpetrators, there are accidental perpetrators, and then there are righteous perpetrators. And that righteous perpetrator category might be a little controversial for a lot of people, but some people do things to truly help other people. That is true. And so my premise is that all perpetrators are not the same. And same with prey. Sometimes you can have two categories here, innocent bystanders and organizational targets. And so organizational targets deals with the company and innocent bystanders deals with the personal aspect of when people are preyed upon.

Kelly:

And then with whistleblowers, you still have these different categories of whistleblowers. You can be an accidental whistleblower, you can be a noble whistleblower, and you can be a vigilante whistleblower. And a lot of times when we think about snitches, rats, tattle tails, traitors, they're that vigilante whistleblower category. But we have these other categories too. So I break that down in the book to help people understand that you have these different emotions because some people get involved in a fraud scheme for varying reasons. It's not all the same, it's not all cookie cutter. And so I use my documentary experience as the through story because my documentary is about the largest municipal fraud in US history. And so I talk about my experiences filming that. And so the perpetrator in that story was an intentional perpetrator, and her crime was discovered by an accidental whistleblower. And the, the victims of her crime were innocent bystanders. They were residents of a town called Dixon, Illinois. So I used my theory that I came up with to really help understand just the different descriptors that I offer in the book.

Neha:

It is a fascinating story. By the way, Kelly, I've watched it and I invite all the listeners here today to go check out All the Queen's Horses too. And I, for myself, cannot wait to get my hands on your book. It sounds like a page turner to me. Now this is my last question for the day. Our listeners who are mostly finance and accounting professionals, they're always looking to continue learning. Now, apart from you, are there any other experts in the field who our listeners can read and also follow on social media to get the latest and greatest in the field of compliance?

Kelly:

Absolutely. And in the report, we have two thought leaders. We have two sidebar interviews with two thought leaders that I highly recommend. Thomas Fox, who is one of the well known compliance leaders and Richard Bistrong. And so they're different because Richard and I'm not gonna spoil the stories you go after go read the report. But Richard has both have experience with compliance and fraud, but in different ways. And so those are two thought leaders that are both on LinkedIn and on Twitter. And I would highly recommend following them and reading their writings because I've learned a lot from those two compliance thought leaders through my experiences.

Neha:

Fantastic. Thank you for those recommendations. And that brings us to the end of our episode today. Thank you so much for a wonderful chat and sharing your insights with us today. Kelly,

Kelly:

You are so welcome and I look forward to coming back again.

Outro:

This has been Count Me In, IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.