Private Investigations of White‐Collar Crime Suspicions: A Qualitative Study of the Blame Game Hypothesis

2017

PIJPSM

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Purpose The purpose of this paper is to discuss the legitimacy of private policing of financial crime by fraud examiners. Design/methodology/approach The literature on fraud examiners is interpreted in the legitimacy context. Findings A number of critical issues based on the institutional theory and social psychology issues are discussed that question the legitimacy of private policing of financial crime. Research limitations/implications There is a need for regulation of the private fraud examination industry. Practical implications A number of legitimacy issues should be addressed by financial crime specialists. Social implications Victims of private investigations require regulation of the investigation industry. Originality/value Criteria for police legitimacy are applied to the private sector.

Section: Are Actions Of Fraud Examiners Proper?mentioning

confidence: 99%

“…To reconstruct the past successfully in a professional manner, there is a need for knowledge management, information management, systems management, configuration management, and ethics management (Gottschalk, 2015(Gottschalk, , 2016.…”

Section: Objectivity In Private Investigationsmentioning

confidence: 99%

Private police legitimacy: the case of internal investigations by fraud examiners

2017

PIJPSM

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“…The following description of the blame game hypothesis is based on research articles by Gottschalk (, ) in the Journal of Investigative Psychology and Offender Profiling , where the blame game hypothesis as well as the rotten apple hypothesis was applied to the private investigation in a utility company.…”

Section: Blame Game Hypothesismentioning

confidence: 99%

“…An investigation should be independent and apply information sources and knowledge categories that are relevant to the case. Characteristics of professional examiners include integrity, objectivity, and accountability (Gottschalk, , ).…”

Section: Introductionmentioning

confidence: 99%

Blame game in private investigation reports: The case of Deloitte examination at Telenor VimpelCom

Journal Invest Psychology

2017

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Business and public organisations hire fraud examiners to conduct private investigations when there is suspicion of misconduct or financial crime. Fraud examiners carry out their investigation based on a mandate. Often, individuals in the organisation are suspects. The blame game hypothesis is concerned with factors that cause blame attribution to some individuals but not to others. In this case study, only executives were blamed who had not disclosed corruption information to a major shareholder and to the chief executive officer.

“…Private investigators are typically fraud examiners from major accounting firms and law firms. Examiners are hired to conduct a goal-oriented procedure of creating an account of what has happened, how it happened, why it happened, and who did what to make it happen or let it happen (Gottschalk, 2015). When examiners move into the latter question of who did what to make it happen or let it happen, then the examination resembles a criminal investigation normally conducted by law enforcement in the police at local and national levels (Osterburg and Ward, 2014 (Gottschalk, 2016a).…”

Section: Introductionmentioning

confidence: 99%

Private policing of financial crime

International Journal of Police Science & Management

2016

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Fraud examiners in white-collar crime investigations represent private policing of financial crime. Examiners in crime investigations reconstruct the past to create an account of who did what to make it happen or let it happen. This article addresses the following research question: What is the contribution from fraud examiners in private investigative policing of white-collar crime? Contributions are considered benefits from an investigation. Benefits should exceed costs to make private policing a profitable investment. Based on analysis of five U.S. cases and eight Norwegian cases, private policing does not seem profitable.Keywords: private policing, financial crime, white-collar crime, investigation reports, fraud examinations. INTRODUCTIONWhen suspicions of misconduct and crime emerge in business and public organizations, private investigators are often hired to reconstruct the past. Private investigators are typically fraud examiners from major accounting firms and law firms. Examiners are hired to conduct a goal-oriented procedure of creating an account of what has happened, how it happened, why it happened, and who did what to make it happen or let it happen (Gottschalk, 2015). When examiners move into the latter question of who did what to make it happen or let it happen, then the examination resembles a criminal investigation normally conducted by law enforcement in the police at local and national levels (Osterburg and Ward, 2014 (Gottschalk, 2016a). Especially in cases where top executives and investors and others from the elite are investigated for potential white-collar crime, then organizations tend to avoid public attention.As a result, reports of investigations are difficult to find to evaluate the quality of private policing in cases of financial crime suspicions in general and white-collar crime suspicions in particular. After two years of searching in the United States and Norway, it was possible to obtain 13 reports and 40 reports respectively. 5 out of 13 fraud examinations in the United States can be linked to white-collar crime, while 8 out of 40 fraud examinations in Norway can be linked to white-collar crime. Gill and Hart (1997), private policing is directly accountable to the paying customers rather than democratically elected bodies and tight legalistic procedures and constraints. Meerts (2014) found that corporations and organizations generally value the possibility of secrecy, discretion, and control that private investigations bring to corporate security. Openness could lead to problems such as reputational loss, which can have economic repercussions. In the same book edited by Walby and Lippert, Williams (2014) discusses the private eyes of corporate culture in terms of the forensic accounting and corporate investigation industry and the production of corporate financial security. Button et al. (2009) found that 68 % of fraud victims report strong feelings of anger.Reports of investigations by fraud examiners are typically written at the final stage of private investigati...