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Perceptions on the Causes of Individual and Fraudulent Co-offending: Views of Forensic Accountants

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Abstract

Individual and/or co-offenders fraudulent activities can have a devastating effect on a company’s reputation and credibility. Enron, Xerox, WorldCom, HIH Insurance and One.Tel are examples where stakeholders incurred substantial financial losses as a result of fraud and led to a loss of confidence in corporate dealings by the public in general. There are numerous theoretical approaches that attempt to explain how and why fraudulent acts occur, drawing on the fields of sociology, organisational, management and economic literature, but there is limited empirical evidence published in accounting literature. This qualitative inductive study analyses perceptions and experiences of forensic accountants to gain insights into individual fraud and co-offending in order to determine whether the conceptual framework developed from literature accurately depicts the causes of fraud committed by individuals and groups in the twenty-first century. Findings from the study both support and extend the conceptual framework, demonstrating that strain and anomie can result in fraud, that deviant sub-groups recruit and coerce members by providing relief from strain, and that inadequate corporate governance mechanisms both contribute to fraud occurring, and provide the opportunity for fraudulent activities to be executed and often remain undetected. Additional factors emerging from this study (the ‘technoconomy’, addiction and IT measures) were also identified as contributors to fraud, particularly relevant to the twenty-first century, and consequently, a refined conceptual framework is presented in the discussion and conclusion to the paper.

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Authors and Affiliations

  1. School of Accountancy, QUT Business School, Queensland University of Technology, Brisbane, Australia

    Jeanette Van Akkeren & Sherrena Buckby

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  1. Jeanette Van Akkeren
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  2. Sherrena Buckby
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Correspondence to Sherrena Buckby.

Appendix

Appendix

Semi-Structured Interview Protocol

Introductory Statement

We are interested in the types of cases that forensic service professionals undertake as part of their role. In addition, it will help in raising public awareness (academics and professionals) on the types of fraud cases you are required to work on, and, importantly, the causes and enablers of fraudulent activities.

  • Question 1 From your experience, what are the main reasons given by individuals for committing fraud?

  • Question 2 Can you please describe any cases you investigated where more than one person colluded with others to undertake fraudulent activities?

  • Question 3 Are you able to identify any governance issues that contributed to fraud occurring or provided opportunities for fraud to occur in cases you investigated?

  • Question 4 What are the major control measures that you have found are lacking in organisations?

  • Question 5 Have you found that organisations, even though they are aware of fraud risk, do little about it or are steps taken to mitigate the risk?

  • Question 6 What are your top five recommendations to a firm in trying to mitigate fraud occurring in the future?

  • Question 7 Without identifying the client(s), can you please describe in detail two cases you have investigated outlining the type of fraud committed, reasons given by perpetrators for committing fraud, and the governance constructs that were lacking in the organisation at the time the crimes were committed.

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Van Akkeren, J., Buckby, S. Perceptions on the Causes of Individual and Fraudulent Co-offending: Views of Forensic Accountants. J Bus Ethics 146, 383–404 (2017). https://doi.org/10.1007/s10551-015-2881-0

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