I was reassured recently when it was reported that President Jagdeo said that there was no evidence of fraud in the Clico meltdown; and secondly when I read that the Guyana Chapter of the Institute of Internal Auditors has planned a one-day workshop on Fraud Prevention, Detection and Investigation.  These two reports served to give recognition to some concerns which may be lurking below the surface.  Corporate fraud (according to Jack Bologna who has done extensive work but who does not consider himself a world authority on the subject), cannot be understood without reference to such other fields of study as sociology, personal and organizational psychology, political science, economics, ethics to name a few.  He suggests that it would take several rounded individuals working ceaselessly to do the subject justice.
The element of breach of trust or violation of trust may be perpetrated in any of the following scenarios: the Chief Executive Officer of a public company who deceives stockholders by falsely representing the value of corporate assets or liabilities or the amount of income earned by the company; a vendor, supplier, or contractor who intentionally overbills, double-bills, or substitutes inferior materials; a corporate employee who gains legitimate access to assets but converts or embezzles them; and a loyal employee who covers up losses and mistakes to save the company from embarrassment.  In a nutshell corporate fraud involves the theft or conversion of assets by corporate personnel or financial deceptions practiced by personnel against shareholders, creditors, and regulatory authorities.  In all of the above nowhere do we see any consideration being given to the ultimate victims of the trust violation.  I believe sincerely that just as how we express concern for the victims of violent crime; we should have some concern for those non-violent crimes which are no less violent to the psyche of the defrauded.
The notion that corporate fraud is committed by a corporation is misleading since it is people occupying positions at all levels in a corporation where accounting and security controls can be overridden – particularly by high level employees with questionable personal ethics which – in reality is expected to act as a form of control.  As with many intangibles in life, personal ethics may be compromised when those in positions of trust have to weigh their economic and professional survival against the interests of stockholders, customers, and employees.  In such a situation the needs, wants, and demands of spouses, children and lifestyles are contemplated; however though this may be understandable, it does not translate into being acceptable.  In this regard organizational culture should focus on enhancing the ethics of high-level managers who would be expected to be the personification of truth, justice, honesty, integrity, and fairness in an environment where those values are seen as important by subordinates.
With no end in sight and no permanent remedies seemingly available to society especially the victims of fraud we should hope that by addressing the motivations and the opportunities which weak controls provide the risk of fraud would be drastically reduced.