The Stop Light Model Synopsis

‘The Stop Light Model is a way of illustrating a new philosophy for fighting financial crime.’ In this model Red are the staff that combat fraud, Yellow are all the other staff in the organization, Green are the career criminals. Using this model as support for risk management workshops and prevention of fraud training can improve staff awareness of the risks of fraud and how these can be reduced. It asks the right questions, promoting a zero tolerance against fraud. It is a cutting edge practice for internal auditing in its fight against crime. All internal auditors must be Red.

Contributed by K.H. Spencer Pickett, with permission. The description of the Stop Light Model is his. More details on the model and its implementation to fight financial crime can be found in his book Financial Crime Investigation and Control (2002), published by John Wiley & Sons Inc., New York, USA.
After Reading the Case Study Consider:
1. Who is at Red and Yellow in your organization’s fight against financial fraud?
2. What actions, if any, does your organization take to move people from the yellow light to red light? Does this include fraud awareness training?
3. What contribution does your internal auditing make to encourage this to happen? Is any of this activity at the cutting edge of internal auditing? If not, why not?
4. Does your organization have a zero tolerance to fight fraud? If so, how does it compare with the Stop Light Model?
5. Are the fraud awareness questions listed in the case asked and measured regularly in your organization?