NCJ Number
108416
Journal
Journal of Security Administration Volume: 10 Issue: 1 Dated: (July 1987) Pages: 2-9
Date Published
1987
Length
8 pages
Annotation
Studies of corporate fraud deal exclusively with criminal activity and neglect the processes whereby social control mechanisms are called upon. This paper examines how three corporate frauds were brought to the attention of regulatory agencies and the public.
Abstract
In many cases of fraud, criminal activity is known to many yet goes undetected for years (Bologna, 1984). Detection is not always a function of police activities such as routine audits or alert management. We focus on situations that transform tolerable illegal behavior into intolerable behavior within the realm of corporate fraud by isolating the conjunction of events which led to exposure of the crime. In all cases, the criminal activity had gone undetected for some time. Events external to the company occurred which exposed the fraud. These events were beyond the control of the offenders. In all three cases, circumstances external to the company and not policing by social control agencies led to revelation of the crime. This does not mean regulatory agencies are ineffective. Many frauds have been discovered by them (Shapiro, 1984). The largest category of frauds, the 'unsophisticated frauds' by low level employees are the most common and involve relatively small sums of money. Larger frauds are much better covered-up and are often revealed by different means (Albrecht, et al., 1984:18). (Publisher abstract)