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 ...
