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1 – 10 of over 4000Michael Gilbert and Alison Wakefield
Fraud has a significant effect on society. It has been estimated to cost the UK economy more than £50bn annually. The Government have signalled their determination to tackle these…
Abstract
Purpose
Fraud has a significant effect on society. It has been estimated to cost the UK economy more than £50bn annually. The Government have signalled their determination to tackle these losses through a range of preventative, enforcement and collaborative activities. Diminishing police resources allocated to fraud means that this activity will need to be delivered by both law enforcement and civilian counter fraud teams. This paper aims to establish whether UK central government organisations have the legal powers, skills and regulation needed to tackle fraud effectively.
Design/methodology/approach
This research was based upon a literature review, which included academic and other material, a semi-structured interview programme and a survey of counter fraud champions.
Findings
Empirical data suggested that the effectiveness of central government civilian counter fraud teams is hampered by a fragmented legal landscape and a lack of skills, and that further professionalisation and regulation is needed to protect professional standards and individual legal rights.
Research limitations/implications
Postal survey had 50 per cent response rate – below gold standard of 70 per cent.
Practical implications
There are no practical implications, as this is a topical research area which is intended to inform counter fraud practice and development.
Social implications
This research highlights limitations on the UK central government’s ability to tackle fraud. There is therefore a low risk that, when published, this research could inform those considering fraudulent actions.
Originality/value
This research was undertaken for a professional doctorate and has been sent to the Cabinet Office to inform their professionalisation programme. It filled a potential gap in the academic literature by looking at the perceived powers, skills and regulatory pressures in place within the UK central government and the extent of the current gap between current practice and the delivery of a fully professionalised service.
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There is increasing guidance for public bodies on the appropriate counter fraud strategies to pursue. One area covered is anti‐fraud culture strategies. Building upon the work of…
Abstract
Purpose
There is increasing guidance for public bodies on the appropriate counter fraud strategies to pursue. One area covered is anti‐fraud culture strategies. Building upon the work of the UK Government's HM Treasury, the purpose of this paper is to assess the extent and quality of anti‐fraud culture strategies in UK central government bodies.
Design/methodology/approach
Based upon analysis of HM Treasury survey data as well as a survey undertaken by the authors.
Findings
The paper shows that the quantitative data from HM Treasury surveys when compared to the qualitative data also drawn from the authors survey highlights significant numbers of central public bodies with limited anti‐fraud culture strategies.
Research limitations/implications
Some of the responses on screening strategies used by central government bodies varied in the detail offered in response to the authors' survey.
Originality/value
Provides much greater depth to the strategies utilised by central government bodies to develop an anti‐fraud culture.
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Mark Button, Jim Gee and Graham Brooks
The purpose of this paper is to provide evidence, from the analysis of 132 fraud risk measurement exercises, of the average costs and rates of fraud. It advocates greater use of…
Abstract
Purpose
The purpose of this paper is to provide evidence, from the analysis of 132 fraud risk measurement exercises, of the average costs and rates of fraud. It advocates greater use of more accurate measurement which if monitored and repeated can secure reductions which could amount to a new competitive advantage.
Design/methodology/approach
This paper has analysed 132 fraud risk measurement exercises from nine countries in a range of different sectors. Only those which assess a statistically valid sample which have sought and examined information indicating the presence of fraud, error or correctness in each case within that sample; have been completed and reported; have been externally validated; have a measurable level of statistical confidence; and have a measurable level of accuracy were included. Each exercise has been assessed to determine the percentage loss rate (PLR) and the fraud frequency rate (FFR). These data were analysed using Excel to determine average rates and further comparable data.
Findings
Fraud and error losses in an organisation should currently be expected to be at least 3 per cent, probably more than 5 per cent and possibly more than 9 per cent. The PLR when first measured has been found to be 5.40 per cent and 4.61 per cent when last measured, representing an average reduction of just under 15 per cent. The paper shows fraud and error can be measured and if regularly this incentivizes action to reduce it reaping financial benefits to the organization.
Research limitations/implications
The vast majority of the data are drawn from fraud risk measurement exercises in the public sector in large organizations.
Practical implications
The paper advocates greater use of fraud risk measurement and counter fraud strategies tailored to reduce losses.
Originality/value
This is the first analysis of fraud risk measurement exercises across the globe.
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This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest…
Abstract
Purpose
This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest new directions for future research.
Design/methodology/approach
The paper is based on a comprehensive general literature review using multiple search engines and databases.
Findings
This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud and detect fraud, particularly corporate fraud, insider fraud and asset diversion. Some companies use corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including board leadership and the role of ethics; (b) board characteristics, composition and structure; ownership structure; accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top.
Originality/value
To the best of the author’s knowledge, this is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers and academics alike.
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This study examines the association between emotional intelligence (EI) and the tendency of future accountants to rationalize and engage in occupational fraud.
Abstract
Purpose
This study examines the association between emotional intelligence (EI) and the tendency of future accountants to rationalize and engage in occupational fraud.
Design/methodology/approach
The study adopts a survey methodology and uses a questionnaire containing a fraud scenario and EI construct to gather data from 225 participants. It performed a Cronbach alpha to assess the measurement parameters consistency of EI and fraud tendency and employed Pearson correlation and regression analysis to test its hypothesis.
Findings
The study found that future accountants in Nigeria are emotionally intelligent and have a high fraud tendency. Also, it found a significant and positive association between EI and fraud tendency, suggesting that future accountants that are emotionally intelligent have a higher tendency to rationalize and engage in occupational fraud. In addition, the study found that academic intelligence, a control variable, positively associates with fraud tendency.
Practical implications
The study offers rare insights into the fraud tendency of future accountants, which would benefit the counter fraud community in Nigeria and other developing countries. Recruiters and employers will find the study beneficial in decision-making on job recruitment, placements and moral orientation for prospective accountant employees.
Originality/value
The study is the first to directly associate EI with the fraud tendency of future accountants from a developing country with high fraud profile and underdeveloped counter fraud strategy. Thus, it provides a benchmark for future studies in other developing countries.
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The purpose of this paper is to illustrate the growing problem of cross‐border fraud, assess the structures that have emerged to deal with it, identify weaknesses and make the…
Abstract
Purpose
The purpose of this paper is to illustrate the growing problem of cross‐border fraud, assess the structures that have emerged to deal with it, identify weaknesses and make the case for a new international body to lead the fight against cross‐border fraud.
Design/methodology/approach
This paper reviews various primary and secondary resources drawn from around the world to assess the current infrastructure for addressing cross‐border fraud.
Findings
The paper finds various gaps as well as examples of good practice in the fight against cross‐border fraud. However, to have a meaningful impact it is concluded a new international body is required.
Research limitations/implications
The paper is largely focused upon the English speaking world and the European Union and does not explore the nature and response to the problem beyond these areas, other than in current international led responses.
Practical implications
The findings have implications for national and international bodies in considering appropriate ways forward in creating stronger infrastructures to counter cross‐border fraud.
Originality/value
This paper will be useful to policy‐makers and the law enforcement community in considering options for the future and is the first to advocate a new international capacity to fight cross‐border fraud.
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Mark Button, Chris Lewis, David Shepherd and Graham Brooks
– The purpose of this paper is to explore the challenges of measuring fraud in overseas aid.
Abstract
Purpose
The purpose of this paper is to explore the challenges of measuring fraud in overseas aid.
Design/methodology/approach
The research is based on 21 semi-structured interviews with key persons working in the delivery of aid in both the public and voluntary sectors. It uses the UK Department for International Development as a case study to applying more accurate measures of fraud.
Findings
This paper shows there are significant challenges to using fraud loss measurement to gauge fraud in overseas aid. However, it argues that, along with other types of measures, it could be used in areas of expenditure in overseas governments and charities to measure aid. Given the high risk of such aid to fraud, it argues helping to develop capacity to reduce aid, of which measuring the size of the problem is an important part; this could be considered as aid in its own right.
Research limitations/implications
The researchers were not able to visit high-risk countries for fraud to examine in the local context views on the challenges of measuring fraud.
Practical implications
The paper offers insights on the challenges to accurately measuring fraud in an overseas context, which will be useful to policy-makers in this context.
Social implications
Given the importance of as much aid as possible reaching recipients, it offers an important contribution to helping to reduce losses in this important area.
Originality/value
There has been very little consideration of how to measure fraud in the overseas aid context, with most effort aimed at corruption, which poses some of the same challenges, as well as some very different challenges.
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Mark Button, Alison Wakefield, Graham Brooks, Chris Lewis and David Shepherd
– The purpose of this paper is to illustrate the ways in which contemporary organisations are imposing their own private sanctions on fraudsters.
Abstract
Purpose
The purpose of this paper is to illustrate the ways in which contemporary organisations are imposing their own private sanctions on fraudsters.
Design/methodology/approach
The research draws on primary data from interviews with counter fraud practitioners in the UK, secondary sources and case examples.
Findings
Such developments have been stimulated, at least in part, by the broader limitations of the criminal justice system and in particular a “fraud bottleneck”. Alongside criminal sanctions, many examples are provided of organisations employing private prosecutions innovative forms of civil sanction and “pseudo state” sanctions, most commonly civil penalties comparable to fines.
Research limitations/implications
Such changes could mark the beginning of the “rebirth of private prosecution” and the further expansion of private punishment. Growing private involvement in state sanctions and the development of private sanctions represents a risk to traditional guarantees of justice. There are differences in which comparable frauds are dealt with by corporate bodies and thus considerable inconsistency in sanctions imposed. In contrast with criminal justice measures, there is no rehabilitative element to private sanctions. More research is needed to assess the extent of such measures, and establish what is happening, the wider social implications, and whether greater state regulation is needed.
Practical implications
Private sanctions for fraud are likely to continue to grow, as organisations pursue their own measures rather than relying on increasingly over-stretched criminal justice systems. Their emergence, extent and implications are not fully understood by researchers and therefore need much more research, consideration and debate. These private measures need to be more actively recognised by criminal justice policy-makers and analysts alongside the already substantial formal involvement of the private sector in punishment through prisons, electronic tagging and probation, for example. Such measures lack the checks and balances, and greater degree of consistency as laid out in sentencing guidelines, of the criminal justice system. In light of this, consideration needs to be given to greater state regulation of private sanctions for fraud. More also needs to be done to help fraudsters suffering problems such as debt or addiction to rebuild their lives. There is a strong case for measures beyond the criminal justice system to support such fraudsters to be created and publicly promoted.
Originality/value
The findings are of relevance to criminal justice policy-makers, academics and counter fraud practitioners in the public and private sectors.
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This article aims to focus on the impact of the current austerity measures on UK public sector anti-fraud and financial crime investigative resource capacity building initiative…
Abstract
Purpose
This article aims to focus on the impact of the current austerity measures on UK public sector anti-fraud and financial crime investigative resource capacity building initiative developed over the years to tackle fraud against the public purse.
Design/methodology/approach
The article draws on secondary sources of data and available literature on fraud and financial crime.
Findings
Fraud is a challenge in the UK public sector but the cut-back on anti-fraud and financial crime investigative resources, given the scale of public sector fraud, the growing emphasis on accountability and the time of austerity with public money more exposed to fraud is arguably a back-door/u-turn policy on zero-tolerance approach in tackling public sector fraud and financial crime. There is the potential of this encouraging more fraud and financial crime against the public sector in the long term if measures are not taken to devise strategies for enhancing anti-fraud and financial crime investigative resource capacity.
Research limitations/implications
The research implication for this article is that it opens an avenue for future studies to examine post austerity strategies for strengthening public sector anti-fraud and financial crime investigative resource strategies to deal with emerging fraud threats to UK public sector.
Practical implications
This article acts as a reference guide for policymakers to reflect on the long-term adverse impact of the austerity on anti-fraud and financial crime investigative resource capacity and capability in tackling fraud public sector fraud.
Originality/value
The paper attempts to present an alternative lens to examining the scale of UK public sector fraud problem rather than relying on headline story of declining fraud in UK.
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The petty level insurance fraud, apparently committed by ordinary members of the community, is costing insurance companies millions of pounds a year. Those losses are passed on to…
Abstract
The petty level insurance fraud, apparently committed by ordinary members of the community, is costing insurance companies millions of pounds a year. Those losses are passed on to the consumer. So it is everyone's loss. This problem appears to be prevalent in all Western countries However, it is in the USA where they appear to have both learnt and lost the most. As the problems in the UK are appearing to reach the scale of those which have already been encountered in the USA, law enforcement agencies and the insurance companies can ill afford to ignore the lessons learnt by the Americans. This paper describes the types of insurance frauds and those measures being undertaken to counter them in the USA. In so doing, the author has created a typology of those counter measures being undertaken.