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I have read and own the recommended book at the end, Financial Shenanigans. Anyone who has ever had to measure up to some imperfect KPI will find it relatable.

My way of personally looking for fraud is to look at incentives. What might this person stand to gain if I take this chosen action and do my incentives align in any way with his?




This doesn't work in some fraud cases. If Madoff is selling you an investment, it is obvious what you think he gets out of it, he invests your money and keeps a proportion and that is normal business right?

As the article says, his clever angle was not to over-inflate the ROI of the investments which might well make them look implausible.

What is harder to spot is whether an investment is actually taking place.


Is there any KPI that is perfect? I think you could find a valid criticism of any KPI.

The incentive view is a good one, and one often followed by auditors, starting with the pay of company accountants!


Makes you wonder if having a lottery system for firing people in a company at random would perform better than KPIs, or at least provide a baseline for KPIs to be measured against.

8-12 months severence / perf bonus, glowing reference for taking one for the team, and placement services. It's just like normal attrition, but makes planning a scam and consolidating a lot of anti-patterns way less viable.

It seems psychotic, but compared to the incidence of mendacity, it's a pretty good deal for everyone.


agreed. Who wants to have unlucky employees? Get rid of them by using the RNG!




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