This article was originally published in the Fall 2014 issue of ICPAS INSIGHT Magazine.
Many people choose to ignore their ethical voice within and they suffer consequences for doing so.
Being back on college campuses around the great state of Illinois and speaking with accounting students has me wondering exactly what it means to "Think like a forensic accountant."
What I’ve discovered over the course of my career is that forensic accountants have an innate ability to process large amounts of data and make instant analyses of very complicated data sets. We also seem to have instincts that protect us from harm and guide us when we encounter conflicting information— let’s call this “the voice within,” which most people simply choose to ignore.
When I offer this up to accounting students, however, I’m often met with some skepticism. Then I ask them this: “A close and trusted friend approaches you with an investment opportunity. They tell you that you can expect returns in excess of 20 percent and that you can invest as much as you want. Do you make this investment?”
“Of course not!” they answer. They can tell this is a trick question from a mile away. When I tell them that 100 percent of them will do this, they scoff in disbelief.
Ever hear of Bernie Madoff? Some of the most successful and sophisticated investors on the planet gave millions to Uncle Bernie. The question is, what is it that would compel someone to completely ignore their voice within and barge ahead?
Sociologists, psychologists and criminologists have studied the causes and effects of fraud for decades and they differ in their assessments, but the bottom line is, “we all want.” We all want more money and possessions, job security and acceptance to the point that we’ll disregard our own welfare. If we’re embroiled in litigation, we may seek vindication, retribution or justice, and the desire for justice may outweigh the rational ability to analyze a situation objectively from all perspectives and consider possible outcomes.
Gerald L. Pauling II, Esq. is a partner with the law firm of Seyfarth Shaw in Chicago. His practice focuses on employment litigation and labor and employee relations, and he also provides advice, training and counseling to clients regarding employment policies and practices and diversity issues. Pauling’s clients have included some of the largest organizations in the world, and he’s seen firsthand what happens when they ignore the voice within.
“Instinct, and 20-plus years of experience practicing law, no longer allows me to view any case, situation or fact pattern as a ‘slam dunk.’ A layup maybe; but true slam dunks are quite few and far between,” Pauling explains. “Clients and their counsel need to listen to the inner voice that ought to be telling them there are two sides to every story, at least two counterpoints to every argument, and unknown facts that may later come to light. Clients and lawyers put themselves at risk when they ignore the voice that begs them to think critically, even pessimistically, about their case and all of the possible outcomes. This ignorance can lead to results that are unfavorable to the client and unexpected by the client. None of my clients like surprises.”
I’ll offer you a simple piece of advice: If you have any hesitation about a situation, then hesitate. There’s a reason you’re feeling what you feel. Stop and listen to your voice within. Ask yourself why you’re so committed to moving forward when red flags are waving right at you. The sad truth often lies in the wants. If we want something badly enough, we’ll ignore all the warning signs, good counsel and inner voices to get it.
I’ll share this cautionary tale from my own past. I was at a new firm and my colleagues asked me to interview a candidate for a staff position, who I knew they quite favored. I wasn’t so impressed, but wanting to fit in and be accepted I agreed to the hire. Within 30 days it was evident that something was seriously wrong. Further scrutiny revealed that this person had falsified the majority of their resume. A fraudster victimized me, all because I wanted to be accepted by others— me, the new head of the forensic practice. It was a lesson that I learned the hard way.
We can all look back on lessons from our lives and find paths taken that led to bad outcomes. Hindsight is 20-20, and it’s easy to think about the would haves, could haves and should haves.
My sincere hope is to focus on a proactive response when I receive conflicting data. I’ve tried to build in some stopgap measures in my professional and personal life; I have a spouse and close friends who I trust intrinsically to tell me their honest opinions, and I have service providers (accountants and attorneys, for example) whom I pay to provide counsel.
However, when I want something and I know that my trusted advisors will likely add volume to the voice within, I often choose not to share the full details or to exclude them completely before committing to action. Irrational? Absolutely, but it’s also very, very human. How often have you offered advice and counsel to clients or colleagues and watched them completely ignore you and forge ahead?
Daniel H. Minkus, Esq. is a member in Clark Hill's Birmingham, Mich. law office, where he practices in the Corporate Practice Group and concentrates in the areas of business and real estate. He has significant experience advising and assisting clients with ongoing business needs, including issues often faced when entering into or terminating relationships with third parties. He offers this perspective:
“Many businesspeople have very good instincts, especially about their industry, and these instincts are worth heeding. When something doesn’t look right, it usually isn’t. Ignoring the concern in favor of proceeding with haste rarely ends up saving time in the long run. An ounce of prevention is truly worth a pound of cure, and listening to one’s instincts often provides that preventative measure—or at least a more critical look at an open issue or challenge. I have seen buyers of businesses get so caught up in the momentum of the acquisition that they ignore their usual good instincts and critical analysis in favor of getting the deal done. Often this results in costly expenditures after the deal closes— expenditures that could have and should have been at the expense of the seller. Not only can failing to listen to your instincts result in added costs, it can also lead to added time and effort to address issues that could have been addressed early in the process.”
If I can push you in a positive direction just once, the next time you’re faced with one of these situations, you’ll choose a new course and listen to your voice within.
Note: Every effort has been made to update pertinent employment information and relevant details since the date of the original publication.