Can Fraud, Bribery and Corruption be Minimised with the Culture of an Organisation?

The culture of an organisation is greatly important in regards to fraud, bribery and corruption. If employees think they can get away with defrauding the organisation, more likely than not, they will. It has been found that an organisations susceptibility to fraud is related to the organisations culture and management style (Tan, Chapple, Walsh, 2015). Honesty and integrity is a desirable culture within an organisation.

Even in my own life I can relate to responding to the culture set within my family. For as long as I remember my family has gone without private health insurance, thinking the cost of having it outweighed the cost of not having it. When I turned 18 and moved out of home I had the choice to take up private health insurance and unconsciously made the decision not to, as that was what I was used to being around.

An example of bad culture being introduced into an organisation, would be if an employee was found to be defrauding the company by taking cash and misreporting it in the accounting systems and management did nothing to punish the employee but rather just brushed it under the rug and moved them to a different section of the organisation. By doing this, the organisation is opening itself up to employees knowing that they don’t care about fraud and will most likely react the same to them if they were caught.

After considering my own experiences with how the culture in my family influenced my decision, I would recommend to CEO’s:

• To care about honesty of the employees
• Respond to conduct breaches by employees; have zero tolerance
• Ensure there is an internal and external audit team regularly auditing the organisation
• Ensure management leads by example (tone from the top) (Van Akkeren, J., 2016)
• Have clear organisational structure, written policies and procedures and fair employment practices (Reed, S., 2014)

Relevant Links:

Why Corporate Culture Matters in Fraud Control


Reference List:

Reed, S. (2014). Six Strategies for Fraud Prevention in your Business. Retrieved from http://www.cgteam.com/blog/six-strategies-for-fraud-prevention-in-your-business


Tan, D. T., Chapple, L., & Walsh, K. D. (2015). Corporate fraud culture: Re-examining the corporate governance and performance relation. Accounting and Finance, n/a. doi:10.1111/acfi.12156

Van Akkeren, J. (2016). AYB115 Governance, Fraud and Investigation: Week 9 [Lecture Notes]. Retrieved from https://blackboard.qut.edu.au/bbcswebdav/pid-6300325-dt-content-rid-6147959_1/xid-6147959_1