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Article

Dominic Peltier‐Rivest and Nicole Lanoue

The purpose of this paper is to describe the characteristics of perpetrators of occupational fraud and their effects on organizations.

Abstract

Purpose

The purpose of this paper is to describe the characteristics of perpetrators of occupational fraud and their effects on organizations.

Design/methodology/approach

The study is based on a 2006 occupational fraud web survey conducted in Canada by the Association of Certified Fraud Examiners (ACFE) using a multivariate regression analysis to explain the effect of perpetrators' characteristics on fraud losses.

Findings

The authors' analyses show that the perpetrator's position (i.e. employee, manager, executive/owner), gender, education level and the presence of accomplices (i.e. collusion) appear to affect fraud losses when analyzed separately. However, only the perpetrator's position and collusion are statistically significant when controlling for the potential correlation among explanatory factors.

Research limitations/implications

This study contributes to academia and the anti‐fraud profession by measuring the statistical effect of perpetrators' characteristics on fraud losses while controlling for the potential correlation among these characteristics.

Practical implications

This study is useful to regulatory agencies and anti‐fraud professionals because it provides information about the characteristics of perpetrators of occupational fraud, who are more likely to be associated with larger frauds, thus pinpointing where prevention and detection efforts may be most effective.

Originality/value

This paper is based on proprietary data owned by the ACFE and is the first to analyze the statistical significance of the characteristics of perpetrators of occupational fraud in Canada.

Details

Journal of Financial Crime, vol. 19 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

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Article

Paul Bonny, Sigi Goode and David Lacey

This paper aims to present the findings of a study examining fraud in the workplace setting, principally in the Australasian context. Although prior research into…

Abstract

Purpose

This paper aims to present the findings of a study examining fraud in the workplace setting, principally in the Australasian context. Although prior research into occupational fraud is conceptually rich, there is a lack of empirical evidence of this important but elusive problem.

Design/methodology/approach

Based on investigative data from 14 participating firms, the paper provides insights into the gender breakdowns and stated motivations of offenders. The paper also provides evidence of the number of investigations, interviews and reports to law enforcement in these firms.

Findings

The study finds that genders are evenly balanced for most firms, with females significantly outnumbering males in banking firms. Self-imposed financial hardship was the most popular motivator. Of the number of admissions to wrongdoing, only half were subsequently reported to law enforcement.

Research limitations/implications

Particularly complex or advanced types of occupational fraud may go unreported or undetected: as a result, the figures presented in this study may be incomplete. Reported figures are based largely on historical data provided by respondents, and the authors are unable to report accurate details of the respondent firms. This makes it difficult to determine the frequency of offending against the background population.

Practical implications

Investigators should continue to look for changes in the life circumstances of their staff. Such changes will give an indication of instances of staff living beyond their means and the sudden financial pressures that can compel occupational fraud. Instead of trying to supervise staff to an impractical degree, managers and proprietors would be well advised to be alert to the kind of pressures that their staff might experience.

Social implications

Social control and detection measures are likely to be easier to implement and less invasive than technical controls. The study provides additional pressure to update traditional conceptualisations of the male white collar offender. While male offenders were responsible for larger losses per case, females were more numerous in the summary offence data.

Originality/value

Gaining insights into the problem of employee fraud and white collar crime is difficult. The authors’ contribution in this paper is to provide empirical insights into the makeup of white collar offenders, including insights on gender.

Details

Journal of Financial Crime, vol. 22 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

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Article

Paul Andon, Clinton Free and Benjamin Scard

– The purpose of this paper is to explore pathways to fraud perpetrated in accounting-related roles, focusing both on situationally driven attitudes and contextual elements.

Abstract

Purpose

The purpose of this paper is to explore pathways to fraud perpetrated in accounting-related roles, focusing both on situationally driven attitudes and contextual elements.

Design/methodology/approach

Drawing on an anomie-based criminological taxonomy developed by Waring et al. (1995) and Weisburd and Waring (2001), which highlights individual attitudes and situational elements and their connection to illegitimate behaviour, the authors perform a qualitative content analysis of available media and court-reported information on a hand-collected database of 192 accountant frauds in Australia during the period 2001-2011.

Findings

The analysis highlights four distinct pathways to accountant fraud – crisis responders, opportunity takers, opportunity seekers and deviance seekers – and the relative distribution of identified cases among these pathways. It also identifies the prevalence of gambling, female offenders, small and medium enterprises as victims, as factors in fraud, as well as the relatively unsophisticated methods in much accountant fraud. In addition, it establishes the importance of situational attitude in moderating inherent character as it relates to fraudulent behaviour and the variable importance of the fraud triangle elements across the pathways to accountant fraud.

Originality/value

This paper provides direct evidence on the nature and pathways to accountant fraud, thus improving understanding of a significant category of occupational fraud. The evidence challenges conventional characterisations of accountant fraud offenders in prior research.

Details

Accounting Research Journal, vol. 28 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

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Abstract

Details

Advances in Accounting Education Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-84950-868-1

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Article

Hafiza Aishah Hashim, Zalailah Salleh, Izzati Shuhaimi and Nurul Ain Najwa Ismail

A number of highly publicised scandals such as Enron, Lehman Brothers, Parmalat, Satyam, Toshiba and 1MDB (to name a few) have heightened the awareness of the effects of…

Abstract

Purpose

A number of highly publicised scandals such as Enron, Lehman Brothers, Parmalat, Satyam, Toshiba and 1MDB (to name a few) have heightened the awareness of the effects of fraudulent financial reporting. While enormous measures have been taken to curb the fraudulent activities among large and small businesses, the issues are still alarming worldwide. Thus, this study aims to explore the extent to which the prevalence of fraud risk in state-controlled companies and to enhance understanding of the underlying reasons of the fraudulent activities.

Design/methodology/approach

As this study is a descriptive and exploratory in nature, an exploratory case study method was used in four state-controlled companies. Using the fraud triangle theory to underpin this study, the qualitative face-to-face interviews were carried out with top management of the companies.

Findings

The study reveals a high risk of fraud occurrence at state-controlled companies that involve dealing with various suppliers, governments, customers and shareholders, even when standard operating procedures and rules and regulation are in place. The apparent reason for this phenomenon is attributed to not only opportunities but also incentives and rationalisations in engaging fraudulent activities.

Originality/value

As there are relatively few qualitative studies conducted in this area specifically among Malaysian state-controlled companies, this study extends the fraud literature by examining risk exposure and reasons underlying the fraudulent activities. The findings demonstrate that to a certain extent, the fraud triangle theory explains the motivations behind the fraudulent activities. The finding from this study is relevant to regulators, investors, companies and academicians in understanding, preventing and combating fraud.

Details

Journal of Financial Crime, vol. 27 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

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Abstract

Details

Advances in Accounting Education Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-84950-868-1

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Article

Maria Krambia Kapardis and Konstantinos Papastergiou

The purpose of this paper is to investigate fraud victimisation of Greek companies during the financial crisis years. Moreover, the paper seeks to encourage the…

Abstract

Purpose

The purpose of this paper is to investigate fraud victimisation of Greek companies during the financial crisis years. Moreover, the paper seeks to encourage the implementation of proactive and reactive measures in an effort to minimize fraud victimisation.

Design/methodology/approach

Drawing on an extensive literature review and utilising a questionnaire administered by Krambia-Kapardis and Zopiatis (2010), auditors and management of companies who had fallen victim to fraud provided information on the typology of fraud and on proactive and reactive measures taken after a fraud incident had been reported to them. Both descriptive and inferential statistics were utilized to analyze the collected data and address the postulated research questions.

Findings

The survey has found that no industry or size of company is immune from fraud, with bigger companies and small- and medium-sized enterprises (SMEs) falling victim to industrial espionage and theft of cash and counterfeit, respectively. The banking and insurance sector appeared to be affected mainly by money laundering. Management fraud was mainly in the form of window dressing, whilst employee fraud involved predominately theft of cash and assets. Loss of reputation emerged as the main concern for the victim, and it had a determining impact on deciding not to report cases to the police.

Research limitations/implications

Because of the sensitive topic being investigated and despite having assured the respondents that their anonymity would be guaranteed, the respondents were hesitant in responding. Thus, the response rate was 16.4 per cent, slightly lower than a similar study carried out in Cyprus (Krambia-Kapardis and Zopiatis 2010). The findings, however, are considered to be reliable, given the fact that the respondents were individuals well versed with the topic under investigation and in a position to know if their company had fallen victim to fraud.

Practical implications

The findings have practical relevance to both industry stakeholders and academics who wish to further explore fraud victimization in the Greek business environment. Given that the financial crisis in Greece is continuing, fraud risk assessment ought to concentrate in the area of cash, and preventative measures need to be considered by the regulators and the victims.

Originality/value

Whilst fraud victimisation studies are becoming popular by the Big 4 accounting firms, there is no fraud victimisation study concentrating on the typology of fraud in Greece. With this survey, it will be possible to draw conclusions and make suggestions to the accounting profession on how to combat fraud, at a time, when the economic crisis is persisting and fraud is expected to escalate.

Details

Journal of Financial Crime, vol. 23 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

Abstract

Details

International Journal of Accounting & Information Management, vol. 19 no. 2
Type: Research Article
ISSN: 1834-7649

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Article

Ach Maulidi and Jake Ansell

This paper aims to challenge some of the underlying concepts about causation of fraud and in doing so enriches knowledge and insight into the management of fraud.

Abstract

Purpose

This paper aims to challenge some of the underlying concepts about causation of fraud and in doing so enriches knowledge and insight into the management of fraud.

Design/methodology/approach

This study is a part of fieldwork carried out in Indonesia.

Findings

Organisational fraud is an exceptional type of crime. Hence, the underlying antecedents and consequences of fraud in organisation are distinct from other crimes, especially violent crimes. The underlying logic in criminological and sociological theories and literature cannot fully explain the causal factors of fraud in the organisation. This leads to a theoretical discussion about the reconstruction of the fraud theory. Implications and suggestions for further studies are discussed in this study.

Originality/value

This study provides a new understanding of fraud and its antecedents and consequences. In doing so, it examines the long-standing debate in criminology and sociology about the theories concerning crime causation, as these areas provide the underlying logic of fraud theory.

Details

Journal of Financial Crime, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1359-0790

Keywords

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Article

Kemi Yekini, Paschal Ohalehi, Ifeyinwa Oguchi and James Abiola

This paper aims to investigate employee fraud within small enterprises in the Nigerian mobile phone sector. It also seeks to understand the key factors that motivate…

Abstract

Purpose

This paper aims to investigate employee fraud within small enterprises in the Nigerian mobile phone sector. It also seeks to understand the key factors that motivate employees to engage in fraudulent behaviours against their employers, and the consequences of these fraudulent behaviours on small businesses (SMEs) in Nigeria.

Design/methodology/approach

The empirical study involves the use of quantitative research. Data were collected through structured questionnaires from 159 business owners, sales representatives, cashiers and suppliers. Frequency distribution, percentages, Pearson correlation and multiple regression analysis were used to analyse the collected data.

Findings

The findings from this research show a significant relationship between personal and organisational factors and employee theft. Particularly, organisational factors made the strongest positive contribution to employee theft. The research also revealed that employee theft had significant effects on employers but less significance on employees. In addition, the research revealed that many businesses did not have preventive measures against employee theft in their firms. The findings of this study were compared with existing literature.

Originality/value

This study shows the relationship between different factors that could cause an employee to engage in fraudulent behaviours, particularly in SMEs in Nigeria.

Details

Journal of Financial Crime, vol. 25 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

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