Applying Six Degrees of Separation to Preventing Fraud
Companies are increasingly exploring ways to take tools and techniques used in fraud investigations and apply them proactively to help prevent and detect corporate fraud before it does serious damage. One such opportunity involves drawing on the theory of Six Degrees of Separation, that every person on Earth is connected to every other person by no more than six steps.
The potential value of integrating the human factor in your fraud risk management program or due diligence efforts is highlighted in a recent article from the Deloitte Forensic Center. Edition 11 of ForThoughts discusses how considering the human element of corporate fraud can help companies mitigate fraud and other compliance risks.
Yogesh Bahl, Northeast leader of the Anti-Fraud Consulting practice for Deloitte Financial Advisory Services LLP, suggests that the 'Six Degrees of Separation' premise illustrates the opportunity for companies to help mitigate their fraud risks by seeking out undisclosed connections among individuals.
According to Bahl, “Fraud risk factors can take on a different life when more people are associated via common or complementary interests, goals, and objectives. In investigating allegations of fraud, a number of electronic tools can be used to help identify these relationships, especially those that are not obvious.”