Does Managing Occupational Fraud Add Value?

Abstract

The past few years have seen the emergence of new developments in the field of occupational fraud. These have manifested themselves in the forms of both insider trading and the misrepresentation of figures in financial statement reporting. In either case, the result is a loss to stakeholders. The proposed study sets out to establish whether the systemic management of occupational fraud can add value to the firm’s wider risk management practices. It will seek to establish how the nature of these value-adding factors can be identified and analysed. The methodology adopted by this research is the collection of primary data from risk man-agers and senior-level security officers of more than fifty organisations. The study-framework employs a quantitative research design via the application of quantitative data-analysis techniques. These include descriptive and demographic statistics, frequency analysis, correlation, and regression. The principal finding of the study are that: • the use of technology, artificial intelligence and blockchain, alongside government regulation, reinforces fraud risk management. • the removal of third parties adds value to the risk-management practices of the organisation concerned. • the use of whistleblowing is shown to be an effective risk-prevention measure. • the existence of ‘excessive trust’ relationships can increase the risk of occupational fraud. The overall conclusion is that the possibility of occupational fraud can be managed and significantly reduced. This can be achieved with the assistance of artificial intelligence, block-chain and whistleblowing.