Accounting and Financial Management
Our PhD students
- Role Title: PhD student
- Address: Richmond Building Portland Street Portsmouth PO1 3DE
- Telephone: 01256 381156
- Email: email@example.com
- Department: Accounting and Financial Management
- Faculty: Portsmouth Business School
Nationality: British - Director of studies: Professor Lisa Jack - Year of graduation: September 2019
The thing about most crimes is that their execution is never black and white. Some people are born criminal, some achieve criminality or others have crime thrust upon them. In fact a lot of crime is so petty as to be deemed unimportant or petty by those given the task of categorising behaviour as criminal or deviant from the ‘norms’ set by society, whoever the standard setters might be.
These definitions in fact lie at the centre of the problem of crime prevention and detection since no deviant act is criminal unless it is labelled as such by the guardians of our laws. The law making executive must put to the people forming a social group to implement their ideas and proposals to enforce peace, tranquillity and conformity. Too much authoritarian intervention and there is a “jack booted” dictatorship crushing opposition underfoot. Too little rule setting and enforcement, theoretically leads to anarchy, dysfunctional selfish or deviant behaviour and ultimately the collapse of social order and the disintegration of society itself, as described in the Gisbonian Rise and Fall of an empire. However, even this is an overly simplistic analysis.
Any society is made up of a random population of individuals with different genetic inherent and learned characteristics of belief, character interaction fuelled by motives such as greed, loyalty, public humiliation, power dominance and inferiority. Each organism or individual at any particular moment is at a specific stage of development in its own lifecycle and subject to external forces, factors, economic and emotional constraints. The possible number of variables is huge and the individual’s reaction to particular circumstances and opportunities is very difficult to predict.
In October 2008 (Personnel Today 8/10/08) the consultancy firm Employment Law Advisory Services (ELAS) reported a 36% increase in the number of queries about fraudulent expense claims in the previous three months as more businesses consider that their staff sought to find extra money by fiddling their expenses to cope with the rising cost of living in shops and at the petrol pumps to cope with the economic downturn. Commercial organisations throughout the UK failed quite spectacularly to get to grips with the fraudulent activity of their staff and the BDO Stoy Hayward figures for the six months to June 2008 showed that employee fraud cost UK companies more than £77m up £10m from the same period in the previous year.
Peter Mooney of ELAS commented that “Disciplinary measures can be taken, and in certain cases this will mean that staff being sacked or even prosecuted. It all depends on the nature of their contract, and the terms and conditions of their employment.” This statement is very revealing as it shows that employers would not automatically discipline, sack and prosecute every offender – to the observer this means a soft approach to those frauds that are discovered and a subliminal message to would be fiddlers and fraudsters about the potential consequences of their actions.
It follows that people inside an organisation are the biggest threat to a business and logically the best preventative measure is to thoroughly “vet” all employees and continuously monitor their changes in circumstances but that is extremely resource hungry and expensive exercise. There is a natural tension between the cost in loss of trust and economic loss of suffering minor frauds and the costs in time and resources of designing, implementing and monitoring employee behaviour through CCTV or accounting systems. For the smaller business which already has a disproportionately high compliance burden in relation to its output by comparison to larger organisations then these “fraud” prevention costs in time and money become a barrier in implementing any strategy at all or even acknowledging that there is a risk of fraud.
Smaller organisations tend to operate in a “family” environment of trust so that key employees are effectively given access to the innermost centres of control of the operation of the business and its bank accounts and could perpetrate any fraud and cover it up as they have no-one checking their actions. As long as the owners of the business have the dividend stream and paperwork showing results as they anticipated they have no reason to ask questions of those they have left in charge of their businesses. If theft or fraud does occur then the reaction is one of betrayal as well as loss and the public humiliation of being cuckolded is a barrier to public admitting or reporting fraud. Indeed, there is a tendency to accept weak explanations rather than believe that the “family” trust has been betrayed by the steward.
The focus of my research is to ascertain why businesses do not protect themselves against fraud.