The placebo effect term is very well known in the medical world as this term is used to provide make‐believe or an illusionary treatment to the identified patients.
With the usage of certain substances like sterile water or a pill of sugar, a perceived beneficial impact is created. It does not have any medical significance however, in some cases, they tend to produce real responses. What works and a key element is the expectations of the patient. The more they expect the treatment to work, the more chances of exhibiting a placebo response are higher. It makes the patient comfortable, however, in reality, it does not have a direct physical effect on the disease itself.
You must have seen notices such as “You are under CCTV surveillance” or “Beware of Dogs”. This notice puts a potential thief on high alert even if CCTV is not in working condition or the dog may be a small harmless puppy.
Similarly, in the corporate environment if effective awareness is created amongst employees and third parties that:
- Strict measures & controls exists for fraud detection, and
- Management has zero tolerance for
- Management is committed to the fight against bribery and corruption
This can have a great deterring effect on fraudsters’ minds even if such measures do not exist or may not be in force. This instills fear in the mind of fraudsters and can help reduce fraud occurrence. E.g.
- Management’s announcement of surprise visits late at night OR
- Publicizing instances of wrongdoers caught and penalized
This is a fraud and risk management exercise and extensively used by consultants and risk management experts during mystery audits, and investigation projects especially in cases like
product adulteration, IP infringement, and counterfeiting of the products in the supply chain business process which exists across various locations PAN India basis.
This content is meant for information only and should not be considered as advice, legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.
Posted by
CA Ankit Salot
AKGVG & Associates