Overview
Fraud has become common occurrence in business world. And organizations lose considerable chunk of their hard-earned revenue to fraud. Prevention and Detection are two methodologies to handle a white-collar crime like business fraud. Wisest approach towards any illegal and inappropriate activity is to prevent it from occurring in first place. Prevention is the most economical way of tackling fraud.
Barriers to Fraud Prevention
Fraud prevention is challenged by several barriers which can be broadly categorized into Legal, Political and Social factors. Understanding the motivation
Factors like opportunity and suitable target, presence of fraud motivated persons/groups, absence of able defense mechanism are drivers of fraudulent activities.
Fraud Guilt Neutralization:
Justification of fraudulent act via guilt neutralization is an added motivation to commit fraud. Public attitude towards insurance fraud as victimless or harmless crime factors to increasing number of fraud cases. Sometimes, especially owing to intermediaries’ role, fraud appear as standard business practice making it a crime no worse than millions other do.
Common guilt neutralization arguments:
Authorship denial – blame shifting or even claiming to have been coerced
Sharing responsibility – ‘no big deal for company’, ‘it’s a rife and every one’s involved’ kind …show more content…
Motivation or pressure is the second angle in examining what is driving the individual to commit the act. Just as with rationalization, the perception of a need or a pressure is the key factor, and it does not matter whether or not the motivation makes sense to others or is based in reality. Individuals may be facing financial or other personal problems such as gambling, drugs, alcohol addiction, or extreme medical bills. Pure greed also can factor into the equation but may be flavored with a sense of injustice. For example, the perpetrator may feel like “the company should have paid me what my car was
Fraud has become common occurrence in business world. And organizations lose considerable chunk of their hard-earned revenue to fraud. Prevention and Detection are two methodologies to handle a white-collar crime like business fraud. Wisest approach towards any illegal and inappropriate activity is to prevent it from occurring in first place. Prevention is the most economical way of tackling fraud.
Barriers to Fraud Prevention
Fraud prevention is challenged by several barriers which can be broadly categorized into Legal, Political and Social factors. Understanding the motivation
Factors like opportunity and suitable target, presence of fraud motivated persons/groups, absence of able defense mechanism are drivers of fraudulent activities.
Fraud Guilt Neutralization:
Justification of fraudulent act via guilt neutralization is an added motivation to commit fraud. Public attitude towards insurance fraud as victimless or harmless crime factors to increasing number of fraud cases. Sometimes, especially owing to intermediaries’ role, fraud appear as standard business practice making it a crime no worse than millions other do.
Common guilt neutralization arguments:
Authorship denial – blame shifting or even claiming to have been coerced
Sharing responsibility – ‘no big deal for company’, ‘it’s a rife and every one’s involved’ kind …show more content…
Motivation or pressure is the second angle in examining what is driving the individual to commit the act. Just as with rationalization, the perception of a need or a pressure is the key factor, and it does not matter whether or not the motivation makes sense to others or is based in reality. Individuals may be facing financial or other personal problems such as gambling, drugs, alcohol addiction, or extreme medical bills. Pure greed also can factor into the equation but may be flavored with a sense of injustice. For example, the perpetrator may feel like “the company should have paid me what my car was