Greed is the driving factor that leads people to desire and take what does not belong to them. The urge to want more than one can rightfully get forces one to perpetrate fraud in an organization or elsewhere in the society (Kanapickienė, & Grundienė, 2015). Unethical behavior or lack of good morals can also persuade one to steal under the influence of colleagues or friends.
What is the cost of the fraud to the economic trends of a country?
The cost of fraud to a country’s economy is huge. Fraud hinders economic growth of a country by a big margin. It is an obstacle to economic and social development. The economic decline of a country resulting from corruption has adverse effects on the less fortunate in society. The cost of transactions and provision of public services are more expensive due to extra costs associated with bribery and fraud. The additional cost of doing business undermines development and creates a high level of unemployment. Fraud and bribery weaken the institutional foundation upon which the economic growth depends. Corruption or fraud hinders the overall development of a country since the money is stolen through dubious transactions ( Kanapickienė, & Grundienė, 2015).
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What motivates people to commit fraud?
Murphy and Free (2015) asserted that pressure from financial distress or from people can make one decide to perpetrate fraud to meet financial obligations that one requires. An avoidable circumstance, spouse or friends or other problems can push one to think about stealing from an organization to meet the financial needs. Rationalization where one tries to prove that fraud is okay someone may justify that taking small amounts of money can do no harm to the organization. In the end, it translates to large amounts that can lead to closure of a company. Opportunity to steal is another factor that motivates people to steal. People steal when they are presented with the chance of sneaking cash or any other property when they are sure that nobody is watching them or aware of the fraudulent activity ( Murphy & Free, 2015).
What current events relate to this?
Financial managers in organizations have been embezzling funds in their respective entities leading to financial constraints and the collapse of big companies. Siphoning of government funds have led to little or no developments especially in developing countries.
References
Kanapickienė, R., & Grundienė, Ž. (2015). The model of fraud detection in financial statements by means of financial ratios. Procedia-Social and Behavioral Sciences , 213 , 321-327.
Murphy, P. R., & Free, C. (2015). Broadening the fraud triangle: Instrumental climate and fraud. Behavioral Research in Accounting , 28 (1), 41-56.
