The conception of organisational fraud: the need for rejuvenation of fraud theory
| DOI | https://doi.org/10.1108/JFC-09-2020-0180 |
| Published date | 09 November 2020 |
| Date | 09 November 2020 |
| Pages | 784-796 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Ach Maulidi,Jake Ansell |
The conception of organisational
fraud: the need for rejuvenation of
fraud theory
Ach Maulidi
Business School, The University of Edinburgh, Edinburgh, UK and
Department of Accounting, BINUS Graduate Program, Bina Nusantara
University, Jakarta, Indonesia, and
Jake Ansell
Business School, The Universityof Edinburgh, Edinburgh, UK
Abstract
Purpose –This paper aims to challenge someof the underlying concepts about causation of fraud and in
doing so enrichesknowledge and insight into the management of fraud.
Design/methodology/approach –This study is a partof fieldwork carried out in Indonesia.
Findings –Organisational fraud is an exceptional type of crime. Hence, the underlying antecedents and
consequences of fraud in organisation are distinct from other crimes, especially violent crimes. The
underlying logic in criminological and sociological theories and literature cannot fully explain the causal
factors of fraudin the organisation. This leads to a theoretical discussionabout the reconstruction of the fraud
theory.Implications and suggestions for further studiesare discussed in this study.
Originality/value –This study provides a new understanding of fraud and its antecedents and
consequences. In doing so, it examines the long-standing debate in criminology and sociology about the
theoriesconcerning crime causation, as these areas provide the underlyinglogic of fraud theory.
Keywords Fraud, Crime causation, Fraud causation, The concept of fraud
Paper type Research paper
Introduction
Fraud happening in organisation is unique as a crime. It costs organisations and
governments billions in monetary terms and also has a large effect on its victims.
Understanding the antecedentsand causation of fraud is therefore crucial, as this will allow
steps to manage the occurrence of fraud. This paper challenges the theories that currently
underpin the prevention strategies providing an alternative formulation. Thus, it provides
the grounds for developingbetter prevention strategies.
Crime causation is a significant area within the criminal justice communities (Collins,
2010). A large body of literaturehas explained the main reasons why crimes happen orwhy
people commit crimes (Gottfredson and Hirschi, 1990;Sutherland, 1940). Various
explanations have been offered to understand such concerns. Some places emphasis on the
offender’s disposition and mental health issue as being leading causes of crimes (Mcniel
et al., 2005;Gottfredson and Hirschi,1990;Raine, 1993). Others suggests that these elements
are debatable as the main attributesof all types of crimes (Scheff, 1963; Maulidi, 2020).
Teplin et al. (1994) explain it is important to differentiate the characteristics of violent
and non-violent crimes when exploring causation. For non-violent crime, Monahan (1992)
argues mental disorders cannot be generalised as main reasons. These authors highlight
JFC
28,3
784
Journalof Financial Crime
Vol.28 No. 3, 2021
pp. 784-796
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-09-2020-0180
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