In the intricate world of occupational fraud, the decisions victim organizations make about punishing perpetrators are as varied as they are complex. A recent study published in the Journal of Forensic Accounting Research by Erlina Papakroni, Marie Rice, and Lisa M. Dilks delves deep into this subject. The research, utilizing data from the Association of Certified Fraud Examiners (ACFE), examines how the duration of fraud, the type of victim organization, and the status of the perpetrator influence the decision-making process regarding punishment outcomes.
The study reveals a fascinating interplay between these factors. Notably, the duration of fraud emerges as a crucial element in shaping the response of victim organizations. This response also varies significantly based on the type of organization—be it publicly traded, privately held, nonprofit, or governmental—and the perpetrator’s status within the organization. The research highlights that different organizational types exhibit distinct tendencies in dealing with fraudsters, with nonprofit, governmental, and privately held organizations being less likely than publicly traded companies to terminate principal perpetrators, especially in cases of prolonged fraud.
Moreover, the study explores the influence of perpetrator status on punishment decisions. It finds that organizations tend to be more lenient towards high-status perpetrators in short-duration fraud cases. However, as the duration of the fraud increases, this leniency diminishes, leading to more severe punishments irrespective of the perpetrator’s status.
These findings carry significant implications for both practitioners and researchers in the field of occupational fraud. They underscore the complexity of decision-making in fraud cases and highlight the need for a nuanced understanding of how various factors interact to influence organizational responses to fraud. This research not only adds depth to our knowledge of occupational fraud but also points to areas needing further exploration, particularly the role of fraud duration in shaping organizational responses.
For a more comprehensive understanding of these dynamics and their implications, the full article „The Fraud Goes On: The Effects of Fraud Duration, Victim Organization Type, and Perpetrator Status“ by Papakroni, Rice, and Dilks can be accessed in the Journal of Forensic Accounting Research, 2023, Volume 8, Issue 1, Pages 44-73. Read the full article here.
