White Collar Crime

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Global Journal of Finance and Management ISSN 0975 - 6477 Volume 3, Number 1 (2011), pp. 69-76 © Research India Publications http://www.ripublication.com/gjfm.htm

Forensic Accounting: A Tool of Detecting White Collar Crimes in Corporate World R.B. Sharma1 and Alaa Mohamad Maloain2 Assistant Professor, 2Assistant Professor & Supervisor Dept. of Accounting, College of Business Administration Al-Kharj University, Al-Kharj, Kingdom of Saudi Arabia Abstract Forensic accounting investigates financial information for the purpose of conveying complicated issue in a manner that other can easily understand. 'Forensic Accounting' approach has a vital role to play in bringing down the degree of such adverse happenings in the corporate sector. It includes enforcement of laws, court litigation and disputes, etc. The issue of whitecollar crime was first addressed by Edwin H. Sutherland during his presidential address at a meeting of American Sociological Society way back in 1939. It is a widespread fact that the corporate crime has been inflicting far greater damage on society compared to all street crimes combined. In the American context, it has been estimated that losses from such crime may be as high as 200 billion dollars every year. To sum up, ‘forensic accounting’ is a very constrictive tool for detecting white collar crimes in the present eaccounting era. For high level of super success of forensic accounting needs to develop fraud schemes, investigation techniques, and the law to fulfill the expectations of clients. Keyword: Forensic Accounting, White Caller Crime. 1

Introduction
‘Forensic’ means relating to the legal matters i.e. law enforcement, court litigation, legal disputes, and so on. Forensic accounting is white collar crimes detective tool that are used by law enforcement and intelligence agencies to uncover, track and document terrorist activities. It is a widespread fact that the corporate crime has been inflicting far greater damage on society compared to all street crimes combined. The dollars lost due to corporate crimes and violence wins landslide position. The losses from a handful of major corporate frauds in India – LIC housing finance Loan, 2G Spectrum, Tyco, Worldcom, Enron, Satyam swamp the losses from all street

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R.B. Sharma and Alaa Mohamad Maloain

robberies and burglaries put together. According to Harper’s research A Swiss bank lost last a minimum of $100,000,000 because of a typing error. In the US Context, it has been estimated that losses from such crime may be as high as 200 billion dollars every year. Occupational crimes differ from Common Street crimes only in that people in a position to do so-Medicaid fraud commit it can typically only be committed by physicians, and banks employees in position of trust can only commit bank embezzlement. The motive of occupational criminals is same as to those of street criminals- to obtain benefits quickly with minimal effort. According to British Prime Minister Gordon Brown, "What the use of fingerprints was to the 19th century, and DNA analysis was to the 20th century, so financial information and forensic accounting has come to be one of today's most powerful investigative and intelligence tools available in the fight against crime and terrorism." (www.ehow.com). The term white Edwin Sutherland coined white-collar crime in the 1930’s who defined crime ‘committed by a person of respectability and high social status in the course of his occupation.’ He raised concerns over the criminological community’s preoccupation with the low status offender and “street crimes” and the relative inattention given to the offenses perpetrated by people in higher status occupations (Cynthia Barnett, 1999). In 1979 the U.S. Congress defined white collar crime as “an illegal act or series of illegal acts committed by non-physical means and by concealment or guile, to obtain money or property or to obtain business or personal advantage”

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