Fraud and Corruption

Introduction ix
1 Characteristics of Fraud 1
Defi nition of Fraud 1
Causes of Fraud 2
Consequences of Fraud 6
Private Fraud Examinations 6
Acar Investigated by Sidley 9
2 Characteristics of Corruption 13
Defi nition of Corruption 13
Causes of Corruption 15
Consequences of Corruption 17
Control of Corruption 18
3 Th e Shadow Economy 21
Elements in the Shadow Economy 22
Expert Elicitation 25
Fraction of White-Collar Criminals 27
Fraction with Probability Distribution 28
Fraction of Off ender Groups 29
Fraction of Crime Categories 30
Fraction of Victim Groups 31
Gender Fractions 31
Total Crime Magnitude 32
Comparison with U.S. Estimates 34
4 Th e Th eory of Convenience 37
Economical Dimension: Motive 40
Organizational Dimension: Opportunity 43
Behavioral Dimension: Willingness 53
Financial Crime Signal Detection 63
Organizational Opportunity Expansion 65
Case Study of a Chief Financial Offi cer 68
Case Study of a Public Hospital 73
5 Convenience Th eory Testing 77
Convenience Orientation 78
Research Model 80
Research Results 82
Entitled to Fraud? 86
Motivational Characteristics 87
Neutralization Techniques 90
Th e CEO Case 92
Th e CFO Case 94
Discussion 95
Conclusion 98
Family Firms 98
Characteristics of Family Members 99
Case Studies of Family Members 102
Discussion 103
Conclusion 105
6 Case Study 107
Convicted Police Offi cer 108
Principal-Agent Th eory 110
Principal-Agent Behavior 112
Crime Opportunity 115
7 Recidivism in Crime 119
Recidivism Defi ned 120
Extent of Recidivism 120
Th eory of Recidivism 122
Predicting Recidivism 122
Convenience Th eory 124
Empirical Study 125
Th omas Middelhoff 126
8 Control Committees 133
Supervisory Body 134
Committee Performance 135
Research Model 136
Research Results 141
9 Whistleblower Retaliation 147
Retaliation Literature 148
Retaliation Actions 150
Retaliation Processes 150
Research Method 152
Retaliation Case 153
Case Discussion 156
Probability of Voicing 159
10 Fraud E xamination 167
Internal Investigations 168
Research Model 171
Research Method 173
Research Results 177
Research Refl ection 179
Institutional Deterioration 182
First Fraud Examination 185
Second Fraud Examination 191
Fraud Examination Failure 197
11 After Fraud and Corruption Scandals 201
Change Management 201
Research Method 202
Research Findings 206
Th eoretical Perspectives 208
Reports of Investigations 210
Conclusion 219
References 229