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- Title
PREVENTING AND DETERRING OCCUPATIONAL FRAUD DRIVEN BY EXCESSIVE INFLATION.
- Authors
Treadwell, Gregory W.
- Abstract
During excessive inflation, business owners may raise selling prices or reduce operating costs to maintain profit margins. For businesses that raise selling prices, customers may move their business; thus, profits may decline. Businesses that reduce the number of employees or decrease wage rates, benefits, or work hours may lose employees, enabling motivated employees to commit occupational fraud. The motivation for these occupational frauds can occur when the remaining employees believe management wrongfully denied requests for pay raises or added more work hours without additional pay. Thus, employees may also commit occupational fraud to obtain retribution. Alternatively, desperate employees may misappropriate and convert employer assets to cash to purchase desperately needed food, clothing, or other items. In addition, reducing controls or having too much trust in employees may motivate some employees to commit fraud. Finally, executives may recognize a need to falsify records to maintain their access to capital. Therefore, business owners, executives, and managers must understand that occupational fraud can flourish for many reasons. As a result, management should develop, implement, and maintain fraud prevention and deterrence controls to reduce potential losses.
- Subjects
FRAUD; PERSONNEL management; WAGES; WORKING hours; WAGE increases; WAGE decreases
- Publication
Journal of Business & Accounting, 2023, Vol 16, Issue 1, p64
- ISSN
1944-2874
- Publication type
Article