White Collar Crimes Rampant At Our Workplaces

0
1301

White collar crime essentially refers to the various forms of occupational fraud and abuse that occur in the corporate environment. It is often referred to as ‘crime in the suites’ (as opposed to ‘crime in the streets’) and is exemplified by the commission of acts of theft, corruption and asset misappropriation in the workplace.

Recent incidents have indicated that the common perception that corrupt and fraudulent behaviour are only endemic in the public sector is far from the truth. In the near past, there have been frequent reports of internal fraud perpetrated by employees of financial institutions (primarily banks), as well as the discovery of complex accounting schemes in publicly quoted companies designed to deceive investors, auditors, and analysts about the true financial condition of these organisations. Now, the situation is different.

The incidence of theft or corruption in the workplace has become a major issue facing the global economy as corporate crimes have rocked the foundation of several countries in recent times. The widely reported corporate scandals that affected Enron, WorldCom and Tyco are typical cases of white collar crimes. Even in Ghana, allegations of corporate fraud and misuse of office have resulted in the removal of several directors and other senior executives of publicly quoted companies within the last decade.

White collar crimes fall into two major categories: crimes committed by individuals and crimes committed by corporations (or other businesses). White-collar crimes by individuals may be committed against an employer or other business, another individual, or the government. Similarly, corporate crimes may be directed at another corporation, the government, employees, or the general public. The various types of white-collar crimes affect businesses and citizens in numerous ways, directly and indirectly.

The Association of Certified Fraud Examiners (ACFE) estimates that the average business loses approximately five percent of its annual revenue to internal fraud, waste and abuse. The ACFE believes that the global cost of white collar crime exceeds $3.5 trillion annually, which easily surpasses the annual budget of several countries. In Ghana, common white collar crimes such as embezzlement of company funds and theft of company assets by employees are believed to cost employers billions of cedis in lost revenue annually.

The true costs of white collar crime are increased operating costs, decreased business efficiency and reduced profits for corporate organisation. For the average citizen, it results in increased economic hardship as such incidents raise the cost of doing business in the country, which is ultimately passed on to the consumer, through increased prices and decreased services.

It is therefore imperative for organisations to put in place measures to combat this canker. Proven counter measures to combat fraud in the workplace include setting a clear ‘tone from the top’ that management operates transparently and the organisation will take appropriate steps to respond to identified incidents of fraud, waste and abuse in a consistent manner. Other measures include establishing a ‘whistle blowing’ mechanism that allows internal and external parties report observed incidents of wrongdoing as well as prescribing a clear framework for conducting confidential enquiries into reports received.

However, note that whistle blowing may not thrive in an organisation where the whistle-blower cannot be guaranteed confidentiality and protection from retaliation.

Another proven way to combat fraud in the workplace is through the use of forensic auditing techniques. Forensic auditing is a blend of traditional accounting, auditing, and financial detective work. It offers a set of tools that companies can use to help detect and investigate various forms of white-collar crimes including financial impropriety and inappropriate or inefficient use of resources. As company structures and controls become more complex, there has been a corresponding increase in the employees’ knowledge of ways to bypass the control systems.

LEAVE A REPLY

Please enter your comment!
Please enter your name here