NCJ Number
184688
Date Published
2000
Length
6 pages
Annotation
This chapter reviews prevention as a tool to reduce corruption.
Abstract
The article describes "forensic accounting," the investigation of possible fraud, waste or abuse within an organization. The main sources of fraud in corporations are employees (72 percent) and management (21 percent). Other sources include customers, service providers and suppliers. Fraud is usually discovered through an organization's internal controls (55 percent of discoveries). Other discoveries are made by an informant/"whistle blower," internal audit, notification by a customer, accident, information technology systems control or by an external auditor. The article claims that corrupt activities can be prevented by an organization's careful attention to internal controls and by having a good internal audit department. However, the efficiency of internal controls is being challenged by the effect of technology on the processing of transactions, and downsizing of organizations is frequently removing the middle management personnel who both provided a sense of corporate continuity and a layer of control. Their departure and the accompanying lessening of control allows corruption to flourish. Figures