What Is The Financial Cost Of White Collar Crime

Financial cost of white collar crime is several times as great as financial cost of all the crime is because crime would be committed by a person that has high status in his occupation. By having a high status in the occupation give him the right and authority to access to huge amount of funds and made most of the decision in the organisation, decision that was made by him will severely impact on the company reputation, business and financial. One of the good example was the `ponzi’ scheme which defrauded 40,000 investors of over $15 million. (Ivancevich et al ,2003)

Dynamic of White Collar Crime mean that the person having a high status in his occupation started using his position to commit fraud, it will cause a huge financial cost for

The Fraud triangle will explain why crime was committed.

1) PRESSURE- Pressure come from a significant financial need or problem. Pressure could also be caused by family situation, medical bill, addiction problem or expensive taste. For example, the employee is addicted to gamble which cause him to be in debt, Pressure from it make him start to thought of committing fraud in the company to pay off his debt. Hence pressure make a person to do thing that is wrong to solve their problem.

2) OPPORTUNITY- Opportunity created the ability to commit fraud. Opportunity usually created by weak internal control environment, lack of manpower, poor management oversight and misuse of position. One of the good example would be Former spring employees convicted of fraud. (Vanessa paige, C., 2017).

3) RATIONALIZATION- Person believe that it is justified to commit the fraud. It could be due to job dissatisfaction, poor working environment. The person usually does not think about the consequence of their action. For example employee was treated badly by the manager, OT hours wasn’t paid to him which let him believe company owed him so he decided to get back what he deserve by committing

(Peter, S., 1995). Ethic value got to be morality, legality, integrity, honesty to make an unbiased and good decision making. Ethic theories that is morality and legality would be Deontology. Deontologists think that they should follow their duties in decision making when ethic are involved, there will be consistent decisions as they based on the individual’s set duties. Deontologists will always follow the law. For example, management can make decision by using cookie jar reserve to increase company revenue for greater outcome in company share value but deontology theories let them feel that it is their duty to make decision that is morality and won’t break the law so they decided not to do it by reporting the actual revenue on the financial statement. Hence Ethic theories like Deontology will make good decision making in preventing financial crime as it is morality and