Identifying and Responding to Risks of Serious Fraud in Australia and New Zealand

• NCJ Number: 205283
• Author(s): Yuka Sakurai; Russell G. Smith
• Date Published: December 2003
• Length: 8 pages
• Corporate Author: Australian Institute of Criminology
• Sale Source: Australian Institute of Criminology
• Publication Format: Document
• Publication Type: Issue Overview
• Language: English
• Country: Australia
• Note: Australian Institute of Criminology Trends & Issues in Crime and Criminal Justice, No 270

Annotation

This document discusses the circumstances present in cases of serious fraud in Australia and New Zealand.

Abstract

This study examined a sample of Australian and New Zealand serious fraud cases within the years 1998 and 1999. For the 2 years in question, the total amount in respect of which offenders were sentenced was $260.5 million, while the total actual loss suffered by victims was $143.9 million. A number of circumstances that arise regularly in cases of serious financial crime have been identified by recent studies. Internal audit was the most frequently identified manner of discovery (19 percent), followed by cases in which offenders failed to make payments to creditors or investors (13 percent). A number of cases were discovered during police investigations (11 percent) or inquiries by law enforcement agencies (10 percent). Relatively few cases involved whistleblowers. Internal auditing generally led to the discovery of accounting anomalies resulting from fraudulent transactions, such as those carried by a bank employee or a company’s financial manager. Behavioral anomalies associated with professional misconduct, such as professionals failing to make payments due to their clients, were detected often when the clients reported this to the police or other regulatory bodies. The anomalous circumstances that give rise to the commission of serious fraud and to its discovery include prudential failures such as poor investment controls; personnel failures such as inadequate staff employment screening; accounting/auditing failures such as internal and external auditing failures; security failures such as inadequate computer access controls; and regulatory failures such as non-compliance with legislative requirements. A new standard provides useful guidance to both private and public sector organizations on the implementation of fraud and corruption control programs. The new standard focuses on three elements: structural elements; operational elements; and maintenance elements. 1 table, 18 references, 3 notes