Finding fraud : the role of auditing in the detection of white-collar crime
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- Master of Science 
Economic or white-collar crime is on the rise, making the study of possible means of both deterrence and detection of such crime ever more relevant. Accounting fraud is among the fastest growing categories of economic crime, and is also the category of white-collar crime most naturally linked to auditor detection. Part of the rationale for this piece of research is the fact that the number of Norwegian cases of white-collar crime only recently has become large enough to allow this type of multiple case study. Another part of the rationale for this thesis is the heavily conflicting views on auditor ability to detect fraud found during a mapping of existing research on the topic. The role of auditing in the detection of white-collar crime is therefore a topic which, due to rapidly changing circumstances and social relevance, is deemed to be in great need of updated description. This thesis seeks to improve on one of the areas now made researchable: What is the role of the auditing function in the detection of white-collar crime in Norway today? The concrete research questions thought to answer this query satisfactorily are: 1) What are the responsibilities of the auditing function regarding the detection of white-collar crime? 2) What are the most common means of white-collar crime detection? 3) Are these findings in accordance with the views presented in extant literature and research on the matter? 4) If not, what are the implications for the auditing function of these findings? This thesis will seek to clarify further the role of auditing in detection within the Norwegian context, based on a convenience sample of Norwegian cases to date. By providing indications about this role this research may also provide valuable input for further investigation of the topic. Concrete suggestions for further research are given in the last chapter of the thesis. Structured as a descriptive multiple case study including 44 instrumental cases, it is hoped that this thesis will allow a better understanding and increased ability to theorize about the broader context of white-collar crime. A multiple or comparative case study is chosen over other alternatives for the range of characteristics inherent in it. It allows the description of a multitude of different Norwegian cases from the recent past, mapping the auditor role in more detail than a strictly quantitative approach would allow. At the same time, the number of cases lets us count and categorize instances in a way that would not be possible if one or two cases received all our attention. Also, such a design implies the added benefit that evidence from multiple cases is considered more compelling. The first part of the analysis involves a description and subsequent quantification of various means of detection of white-collar crime. The second maps and judges auditor involvement by phase of the detection process by use of three external and independent raters. Main findings include an interesting connection between various means of detection, illustrating what seems to be a synergy effect between whistle-blowers and the media. Also, the included cases indicate a lower auditor detection rate than what has previously been shown to be the case in other countries, a finding which may warrant further investigation of country specific conditions that may influence auditor willingness or ability to engage in detection.
Masteroppgave(MSc) in Master of Science in Business and Economics - Handelshøyskolen BI,2012