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Fraud includes the improper usage of resources and the misrepresentation of facts to receive gain. It is related to the misallocation of resources, or the distorted reporting of the existence and availability of resources. Fraud is a parasite that maims and eventually kills an organisation.

Fraud threats in organisations

Fraud includes the improper usage of resources and the misrepresentation of facts to receive gain. It is related to the misallocation of resources, or the distorted reporting of the existence and availability of resources. Fraud is a parasite that maims and eventually kills an organisation. After a while, its contagious effect would find its way to another host organisation.

Fraud does not pay whatsoever, but to a few it could although the final outcome would often end up in prison or prosecution.

It erodes the bottom lines and in the end or ultimately the very existence of any organisation is negatively impacted. Whatever an organisation is, be it non-profit or profit/business in nature, it cannot remain healthy to survive and be competitive if fraud continues to go undetected and unchecked because obviously any organisational resource that is misallocated or “misused” threatens the continued existence of an organisation.

The cost of fraud. Is there such a thing as fraud cost? If there is, what then is the cost of fraud? Fraud cost can be looked at by saying that the resources allocated to combat fraud could have been profitably invested in other productive and useful pursuit such as employee training and education, corporate research and the furtherance of diverse knowledge for the organic expansion of an organisation in particular, and for good of mankind in general.

Fraud cost can be in the form of losses attributable by fraud and crime and these can easily be reflected in decreased sales, asset loss or diminution, employment productivity loss, poor creditability, image, reputation and goodwill decline, legal external liability/obligation and punitive costs.

An obvious impact. The obvious impact is that with fraud, the costs of legal and insurance protection tend to increase. Fraud cost can also be linked to the repercussion it has on the moral fabrics of the economy and of course the country's reputation that would be lowly graded by global agencies like Transparency International.

Many sociologists contend that fraud causes a pervasive attitude of “if others or other countries can do and has done it, so why not I or we?”. This callous attitude perpetrates further indulgences of the many blue and white collar crimes these days. We have seen or read the many past and recent offenders, including chief executive officers and politicians. Such forbearing indeed erodes the ethical value system further.

Why would this be so? Because such acts sent out conflicting messages of higher management responsibility and social as well as moral ethics, people who are hired and paid to supposedly preserve and enhance corporate governance but when crime and fraud creep in the essence of accountability/responsibility, openness/ transparency, and honesty/integrity fizzled out or become non- existent.

Fraud transcends all boundaries. There are no barriers, demarcations, territories or borders for fraud and crime, be it organised crime or discreet and one-man show kind of event. It taints and permeates the sanctity of religious entities, the fibres of corporate structures, and the credibility of governmental organisations.

Many academic thoughts tend to agree that fraud is a result of that general disregard for ethical behaviour stemming from a variety of educational and social disorders.

On a macro perspective, to say the least, fraud is considered a public crime that denies any economic country the chance of possibly retaining its position as a model economic power.

An attempt to define fraud. There are many versions or definitions for fraud by the so-called corporate crime-experts, researchers and authors on fraud studies.

Among the many interpretations is common belief where the spectrum of illegal acts falling under the umbrella of white collar crime is synonymous with fraud, because those illegal acts represent a metaphoric decision of fraud perpetrators.

For this article, the definitions are looked at from an ordinary business' perception that combines a symbolic distinction between physical or violent crimes like murder or armed robbery, hijack, ransom, theft and arson. The general business community views fraud as a crime of intelligence as they believe that it represents abuse of power by an individual or a group of individuals working in cohort. In such an environment the element of “intelligence” has to exist.

The business community tends to group fraud and crime into white- collar and blue-collar, where some are obvious while others are less so.

Some examples of common and obvious white collar crimes are as follows:

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