NCJ Number
235189
Date Published
July 2011
Length
8 pages
Annotation
Based on the selection and analysis of relevant factors, this paper considers issues in predicting fraud trends in Australia in the context of the global financial crisis (GFC).
Abstract
Even professional judgments about trends in fraud should be viewed cautiously, because unless there is plausible argument and some data or case studies, this can be the product of "group-think" rather than rigorous review of evidence; however, even with these caveats, researchers and analysts are not in complete agreement that fraud will increase as a result of the GFC. Interviews with business people and fraud managers as well as professional networking in order to identify evidence and views of fraud trends suggest that any variations in the rate of fraud are dependent on type, and this is a function of the impact of the GFC on both motivations and opportunities to commit various types of fraud. This paper considers how motivations and opportunities to commit various types of fraud under the conditions of the GFC can be analyzed under various existing models of fraud explanation, including "rational choice" theory and "opportunity" theory. Levels of indebtedness and regulation under the GFC are also examined as factors that may influence motivation and opportunity to commit fraud. The authors advise that the impact of changes in guardianship, motivations, and opportunities to commit fraud under the conditions of the GFC is difficult to determine, and most fraud data are too dependent on changing probabilities of recognition, reporting, and recording to enable confident inferences about fraud trends; however, there is no evidence that the GFC has had, or is likely to have, a major impact on increasing the cost of fraud or levels of fraud in Australia or elsewhere. 37 references