Occupational and Corporate Frauds in Modern Sri Lanka Problems of Principles and Practices

Abstract

While the occupational and corporate frauds are hiking the number of reported cases shows a decline in recent years. Research found two key reasons for the said decline is that organization’s believed that law enforcement authorizes and legal frameworks are not capable and effective to address them and those institutions give priority for prosecuting the individual fraudster than corporates to recover money (Courtois & Gendron, 2020). Hence, this research was primarily motivated to explore why practically law enforcement authorizes and legal frameworks failed to rectify occupational and corporate frauds effectively and to examine why such institution more inclined to prosecute the individual fraudster than corporates to recover money. Thus, study sought to obtain a clear clarification and proper understanding on the terminologies of occupational and corporate frauds and their underpinning theoretical foundations. This is a qualitative and interpretative study. Findings of the study filled the gaps in knowledge by introducing new concept called ‘the triple nexus’ to existing fraud literature. Where first conceptual nexus shows how either occupational fraud converted to corporate fraud and how corporate fraud transformed to occupational fraud. The second practical nexus demonstrate, when the nexus between the fraudster and corporate legal personality is high how such fraud labelled as corporate fraud while there is weaker nexus between them such fraud called occupational fraud. Third nexus exists when the conceptual and practical nexus linked. In other words, where the nexus between the fraudster and corporate legal personality is high the nexus between the occupational fraud and corporate fraud also becomes high. Similarly, when there is weaker nexus between fraudster and corporate legal personality the nexus between occupational fraud and corporate fraud also becomes weak.