|Topics:||White Collar Crime, 🔪 Crime, 🕵🏻♀️ Criminology, 👨🏻⚖️ Criminal Justice|
Table of Contents
In the recent past, scholars have exhibited interest in understanding occupational crimes. Notably, occupational crimes denote criminal offenses committed in one’s line of duty. Employees working for various organizations may commit crimes with the intention of benefiting the organization. Government officials also exhibit occupational crime if they use their power to gain undue advantages. Professionals such as teachers, healthcare professionals, and lawyers may also commit occupational crimes if they compromise the trust that defines their relationships with clients. Individuals may also choose to commit various crimes in their daily practice regardless of the workplace. In the past, the concept of occupational crimes was narrow-based since it denoted only white-collar crimes (Payne, 2012). However, scholars have expanded the concept to include crimes committed by individuals in the workplace regardless of the job category. Organizational occupational crimes committed by employees with the purpose of benefitting the organization have proven to be the most significant in the recent past. Particularly, financial accountants compromise the reporting guidelines and regulations with the purpose of helping the organization to impress investors. Numerous cases of non-professional financial reporting rely on falsified information. This paper delves into a comprehensive discussion of the steps for punishing such crimes.
As highlighted above, employees commit offenses with the core objective of benefitting the organization. Falsified financial reporting is one of the popular crimes that employees have been committing in the recent past. Particularly, financial accountants work together to develop unrealistic financial reports. The Sarbanes-Oxley (SOX) Act provides compliance requirements that all financial accountants should comply with when developing financial statements (Pontell & Geis, 2007). Particularly, the regulation requires companies to disclose honest financial information that has integrity. The regulations surround internal controls that determine the data that appears on financial statements. Unfortunately, many financial accountants have contravened this regulation and have distorted the information provided in financial statements. The business world is becoming remarkably competitive. Many companies seek to assure investors that they are making good progress and have remained profitable.
The frenzy to impress potential investors motivates companies to falsify financial information and protect the company’s reputation. In many instances, such companies do not report losses. Organizations have a responsibility to their stakeholders of providing them with pragmatic financial information. However, many financial accountants misrepresent the information to formulate a good image of the organization that does not exist. The falsified information leads to a great disadvantage to the investors who put their money in a company that is registering losses (Friedrichs, 2010). Notably, investors seek to provide financing to companies that have a good financial record. However, with falsified information, investors take a great risk. Shareholders and other interested parties rely on falsified information to make important decisions. When that happens, the investors suffer great losses.
Companies such as Enron became bankrupt because of the tactics that the chief executive officer was using to hide its financial losses. The company continued to trade with other businesses while in actual sense, it was registering huge losses. The chief financial officer played an active role in falsifying the information and making the financial data to suggest that the company was still profitable (Leap, 2007). The chief executive officer alongside the chief financial officer used special purpose entities to keep the losses under cover. For a long time, investors and creditors believed that the company was performing well. The truth eventually emerged revealing that the company was becoming bankrupt. The case of Enron serves to demonstrate the implications of falsified financial information.
Occupational crimes have increased significantly, as companies seek to adjust to the highly competitive business environment. For this reason, there have been numerous reports of financial accountants who have taken the risk to alter financial information with the aim of creating a positive impression to protect the company. In many cases, employees who commit such crimes are subject to losing their certification and serving a jail term depending on the ruling presented by the court. In other instances, the organization also suffers unpropitious effects because of the falsified documents. Despite the emphasis of complying with the existing regulations, many employees still find themselves cornered, especially if the company leaders compel them to alter financial reports (Coleman, 2006). Many organizations recognize the adverse effects of committing such crimes by compelling employees to alter financial information. Altered financial records place the organization at a great risk of losing its positive reputation.
There is a need to establish measures of punishing and reducing occupational crimes. The penalty should depend on the damage caused by the falsified records as well as the regulations violated. Moreover, the government should establish strategies for enforcing financial reporting regulations. Without proper reinforcements, organizations may take the regulations for granted. There is a need for organizations to execute measures that promote honesty in financial reporting. Increasing the punishment for occupational crimes such as falsified financial records is likely to prevent employees from engaging in such behavior (Lewis, 2005). Establishing strict audit measures will ensure that experts can discover any falsified records in good time. The implementation of such regulations should be a priority for every organization. Financial accountants should recognize the implications of falsifying information. Particularly, they should serve jail terms equivalent to the damage they cause to different stakeholders.
In the recent past, cases of occupational crimes have increased remarkably. In the case of organizational crimes, there have been cases of company leaders collaborating with financial accountants to alter financial information. In many instances, organizations take such measures since they want to protect the image of the organization. As a result, they use tactics of hiding losses and failing to reveal the financial challenges that the company is facing. Such crimes have adverse effects on the company and its stakeholders. Specifically, investors suffer great losses because they finance the organization, even when it is no longer profitable. They use falsified information to make important investment decisions and take a huge risk. Stringent measures in the reinforcement of financial reporting regulations are likely to register positive outcomes in reducing financial accounting crimes (Croall, 2007). Increasing the punishment will also ensure that companies do not take the risk of falsifying financial information.
- Coleman, J. W. (2006). The criminal elite: Understanding white-collar crime. New York: Worth Publishers.
- Croall, H. (2007). Understanding white collar crime. Buckingham: Open University.
- Friedrichs, D. O. (2010). Trusted criminals: White collar crime in contemporary society. Belmont, CA: Wadsworth Cengage Learning.
- Leap, T. L. (2007). Dishonest dollars: The dynamics of white-collar crime. Ithaca: Cornell University Press.
- Lewis, R. V. P. D. (2005). White collar crime and offenders: A 20-year longitudinal cohort study. Lincoln, NE: Writers Club Press.
- Payne, B. K. (2012). White-collar crime: The essentials. Thousand Oaks : SAGE Publications, Inc.
- Pontell, H. N., & Geis, G. (2007). International handbook of white-collar and corporate crime. New York: Springer.