Following the research of Eaves, D. (2017). “Fraud costs UK economy £193 billion a year - equating to more than £6,000 lost per second every day” - Latest Thinking Blog. [online] The rapid growth of fraud within businesses since the devastating worldwide economic crisis of 2008 can be altered if corporate executives worked more effectively on trying to reduce and limit the amount of fraud carried out within their own companies by 40%. “Increasing fraud levels could be blamed on technological change, as fraudsters are more insulated from the consequences of their crimes, as well as the increased complexity of systems, which allows frauds to be more effectively hidden.” The effects of tax fraud can be very harmful for not only businesses but …show more content…
Kantian ethics focuses on initial intention, is perceives the act being right or wrong in themselves, regardless of consequences therefore if an individual did not deliberately commit fraud, Kant would agree with the belief that the intention was good equating in a good act despite the outcome. Kant argues that we must obey the categorical imperative that follows three rules; consistency, human dignity and kingdom if ends. The first rule is consistency which Kant believes to be the fundamental principle of morality; “Act only according to that maxim by which you can at the same time will that it should become a universal law.” Groundwork of the Metaphysics of Morals Kant, I (1785) This essay is going to focus on two distinct types of fraud. Firstly, White Collar Crime which is defined by sociologist Edwin Sutherland as “a crime committed by a person of respectability and high social status in the course of his reputation.” Sutherland, E (1939). Secondly, Tax Evasion which is the illegal act of failing to pay government tax, which under its definition, would be perceived as a white collar crime …show more content…
From this evidence, it is clear that there are different scales and extents of fraud. To begin with it is beneficial to understand the reasons that influence individuals or companies to carry out such fraudulent behaviour. To help illustrate this idea more concisely, an American sociologist, Donald R. Cressey devised the theory, “The Fraud Triangle” which assisted him whilst researching criminology and white collar crime. There are three main factors causing fraud according to this theory including; pressure, opportunity and rationalisation. Firstly, pressure on an individual or a company can originate from issues such as lacking income, debt or other prevailing financial trouble commonly leading to irrational thinking such as an individual believing that their problems are unsolvable which may result in them seeking different courses of action ie, creating the pursuit to commit fraud. The second factor of the theory being opportunity, meaning the course of action which an individual perceives to be the best route in order to solve their problem, commonly with the hope that it will be hidden from higher management finding out. This opportunity will most likely involve the individual taking advantage of their role within the workplace. Finally, the final step of the theory involves
Fraud is one of Canada's most severe acts of financial criminality as the economic impact of this crime could potentially handicap an entire society. According to the Canadian Anti-Fraud Centre Annual Statistic Report (CAFC), a report established to monitor fraud with the aid of the Royal Canadian Mounted Police (RCMP), and Competition Bureau of Canada, it reported an annual loss of 74 million dollars affecting over 14,472 victims (Canadian Anti-Fraud Centre, 2014). Given this alarming statistic, it is worrisome that we as a society still ignore or turn a blind eye towards those who commit fraud as seen in the low conviction (Canada Revenue Agency, 2014), and focus our efforts on petty thefts as seen with the high rate of convictions
So just how did Scott Welch fit the profile of the average perpetrator? Based off the information reported by the Association of Certified Fraud Examiners’ (ACFE) 2010 Report to the Nation, Welch fit directly into the median for a perpetrator – he was male, between the ages of 46 – 50, had a tenure of at least 6 – 10 years, an executive position as a Vice President. According to the ACFE’s report a perpetrator’s position within the company, age, tenure, gender and education level all have a have consideration in a fraud. In the 2010 report, it is noted that 66.7% of all frauds are perpetrated by men, more than likely due to the fact that more men hold a position of authority. Of the cases studied, 74% of all managers and 88% of all owners/executives were men (Association of Certified Fraud Examiners (ACFE), 2010). The combination of Welch’s tenure and authoritative position may have exacerbated the losses suffered by Wachovia and may also have helped him hide the fraud from detection for an extended period of time of eight years (“Former Wachovia,” 2011). This period is well above and beyond the 24 months reported by the ACFE as the median time frame in which frauds perpetrated by executives/owners were detected (ACFE, 2010). Taking into consideration all the kn...
I believe that asset misappropriation by accounts payable fraud is occurring at Wayland Manufacturing Company due to a lack of proper internal controls. Making the company’s Chief Accountant responsible for additional day-to-day functions provides him with opportunity to commit by creating fictitious vendors with his information and then creating fictitious invoices. Newbaker can then conceal his fraud by approving the invoices for payment. Employees working at an organization for more than five years are more likely to commit fraud. Therefore, Newbaker’s six-year history with the company has made him trustworthy and very knowledgeable, which could indicate involvement in asset misappropriation. The high employee turnover could represent a past fraudster leaving before getting caught or employees refusing to continue with the asset misappropriation. In addition, the varying monthly accounts payable transactions ranging from the lowest being April 2014 and
Last week, we talked about the IRS Criminal Investigation unit, which just released their Fiscal 2012 report. That report was filled with the sort of dry statistics you would expect from an IRS annual report: 5,125 total investigations launched, 202 crooked tax preparers indicted, 199 identity thieves sent to prison, and 64 months average time behind bars for money launderers. But the report also includes dozens of stories of tax cheats who really just should have known better — and some whose stories are so entertaining we just had to share them. Are you having a bad day? Well, be glad you're not one of these people!
Ulinski, Michael. "AN ANALYSIS OF SMALL COMPANY FRAUDS AND." American Society of Behavioral Society. Dept of Business, Pace University. 05 Feb. 2008.
Throughout Kant’s, Groundwork of the Metaphysic of Morals, some questionable ideas are portrayed. These ideas conflict with the present views of most people living today.
As Sam Duncan wrote “Kant equates morality with acting freely. When we act on the moral law, we act independently of any impulse…” We all know crimes such as murder or stealing are morally wrong, but it is the decision we chose to make as we are faced with the dilemma of acting on a good or bad decision. No one else is to blame at that particular moment since it is the individual right then and there doing good or
Fraud is usually comprehended as deceptive nature calculated for advantage. And usually this kind of people might be called a fraud. According to the U.S. legal system, fraud is a particular offense with specific features. Fraud must be proved by showing that the defendant’s actions involved five separate elements: 1. A false statement of a material fact; 2. Knowledge on the part of the defendant that the statement is untrue; 3. Intent on the part of the defendant to deceive the alleged victim; 4. Justifiable reliance by the alleged victim on the statement; 5. Injury to the alleged victim as a
Enron and their accounting firm Anderson Accounting brought what we know as “white collar crime” to the forefront. White-collar criminals are not known to be dirty criminals, because they use their heads to get what they want from society. White collar criminals do not use their muscle; instead they use their brain for mischievous way to manipulate people. These criminals are just as dangerous as the bank robbers and murderers in my opinion. In these times, even the most trusted people are being convicted of white-collar crimes, your neighbor, the banker you have trusted for ten plus years, the closest of family friends, no one can be ruled out. White-collar crimes can differ in the sort and magnitude of the crime. There are always new scams coming out every day that society falls victim
Giroux, G. (Winter 2008). What went wrong? Accounting fraud and lessons from the recent scandals. Social Research, 75, 4. p.1205 (34). Retrieved June 16, 2011, from Academic OneFile via Gale:
Fraud and white-collar crime are common forms of crimes that people commit in various aspects and positions in the corporate world. Fraud and white-collar crimes have similar meaning as they refer to the non-violent crimes that people commit with the basic objective of gaining money using illegal means. The cases of white-collar crimes have been increasing exponentially in the 21st century due to the advent of technology because fraudsters apply technological tools in cheating, swindling, embezzling, and defrauding people or organizations. White-collar crime is a complex issue in society because its occurrence is dependent on many factors such as organizational structure, organization culture, and personality traits. Thus, the literature review examines how organizational structure, organizational culture, and personality traits contribute to the occurrence of white-collar crimes.
The Hollate Manufacturing case provided by Anti-Fraud Collaboration has well illustrated how several common issues in an organization contributed to the fraud’s occurrence. These issues can be categorized into two major groups: ethical culture (internal aspect) and internal control system (external aspect). By taking effective actions to enhance these two aspects, an organization can protect itself against the largest frauds, which result in financial and reputational damage.
The principle territory we are planning to address is accounting fraud and how it could impact an organization by answering, the who, what, when and how. Its goal is to increase the awareness of accounting fraud and fraud counteraction. The intriguing thing about accounting fraud is that little disclosure as a rule usually leads to an enormous increase in fraud. A number of categories and sub-categories can be divided up for fraud.
In today’s day and age, there is a lot of news that is related to corporate accounting fraud as companies intentionally manipulate their financial statements to show a better picture of their financial health. The objective of financial reporting is to provide financial information about a company to its various stakeholders such as investors and creditors so that these stakeholders can make decisions accordingly. Companies can show a better image of their financial well being by providing misleading information. This can be done by omitting material information from the books or deceitful appropriation of assets such as inventory theft, payroll fraud, check forgery or embezzlement. Fraudulent financial reporting will have an effect on the This includes but is not limited to; check forgery, inventory theft, cash or check theft, payroll fraud or service theft.
Fraud is defined as someone try to act with intention to cheat other people in order to acquire an unfair or illegal advantage. The fraud happens due to management override the internal control of the organisation and fraud will affect the financial reporting. The main categories of fraud that can affect financial reporting are fraudulent financial reporting and misappropriation of assets.