Details

Technical Note

Frauds & Their Prevention in Organisations

Muhammad Junaid Ashraf

INDUSTRY :

AREA : Business Ethics

ORGANIZATION : Pakistan

LENGTH : 16

LUMS No : 24-001-2014-2

PUBLICATION YEAR : 2014

KEYWORDS:

Frauds,Prevention,Organizations,Skateholders,Sociologists,Oraganizational Behaviour,Capitalist Mode

DESCRIPTION:

Frauds consume precious organizational resources, so their prevention remains a major concern for all organizational stakeholders. This note is an attempt to understand the reasons for organizational fraud, its prevention mechanisms and the causes of those mechanisms' failures. Most of the instructional resources available on this topic are either too technical in nature or are too generic. Technical texts focus on fraud types and the specific tools and techniques that can be used to prevent them. Most of the material written by accountants (for accountants!) falls in this category. In contrast, there are these generic commentaries written by sociologists that address this issue from a sociological standpoint. While very insightful, their utility for executive training is limited. Most executives find these materials too abstract for their liking. The primary motivation for writing this note is to create an instructional resource which falls in between these two extremes. The note covers technical issues, e.g. basic ingredients of internal control systems. At the same time, it links organizational frauds with crisis and contradictions of the capitalist mode of production. The author feels that this middle of the road approach can be of greater instructional value for MBA and executive education.

LEARNING OBJECTIVES:

1) To understand the conventional view of the nature of organizations. 2) To understand the conventional view about the factors that cause organizational frauds. 3) To appreciate the system of internal control and its key components. 4) To understand the nature of capitalist system through the concept of circuit of capital. 5) To comprehend how the circuit of capital affects the functioning of organisations and the society. 6) To understand thow the broader economic system and organizational governance models create needs, opportunities and rationalisations of fraud for different layers of management. 7) To grasp the limitations of internal control in the context of these needs, opportunities and rationalisations.

SUBJECTS COVERED:

Business Ethics, Fraud