The effects of reducing opportunity and fraud risk factors on the occurrence of occupational fraud in financial institutions. (March 2019)

• Record Type: Journal Article
• Authors: Suh, Joon B.; Nicolaides, Rebecca; Trafford, Richard
• Is Part Of: International journal of law, crime and justice. Volume 56(2019)
• Page Start: 79
• Page End: 88
• Publication Date: 2019-03
• Subjects: Collusion -- Financial institution -- Fraud risk -- Management override -- Occupational fraud -- Opportunity; Law -- Periodicals; Criminology -- Periodicals; Justice -- Periodicals; Justice pénale -- Administration -- Périodiques; Criminologie -- Périodiques; Sociologie juridique -- Périodiques; Electronic journals; 340.11
• DOI: 10.1016/j.ijlcj.2019.01.002
• Languages: English
• ISSNs: 1756-0616

Abstract

Abstract: Internal fraud has been attributed as one of the contributing factors for serious banking crises. Given that opportunity is the pre-eminent cause of white-collar crime, this study attempts to measure the relationships between the perceived 'opportunity reduction' and other fraud risk factors with regard to the 'likelihood of fraud occurrence' in financial institutions. For analysis, the study gathered 395 survey responses from South Korean financial sector. The results of logistic regressions of the study highlight that how to operate control mechanisms combining prevention and deterrence measures (the qualitative aspect of internal control), is more important for preventing fraud than the mere existence of many anti-fraud controls. In addition, the study discovers that the employees of the Korean financial institutions view that the risk of management override of controls is a more critical risk than collusion in their organization.