Date of Award

2010

Document Type

Thesis

Degree Name

Master of Arts

Department

Business

Abstract

Throughout the 20th century, researchers studied financial fraud in order to better understand the factors, motives and environments that increase the occurrences of fraud. By studying these historical trends, modern governmental agencies and public organizations are able to more effectively detect and prevent financial fraud.

Economic climate directly influences the occurrence of fraud; specifically, it is during periods of economic downturn when organizations are more vulnerable to fraudulent attacks. While it has always been assumed that recessionary periods lead to an increase in fraudulent activities, the direct correlation between the two has been greatly understudied by researchers. This thesis is important in part because it helps reduce that gap in research. It also confirms the theory that financial fraud increases during periods of economic downturn.

In Chapters 1 and 2, fraud research by notable scholars Donald R. Cressey and W. Steve Albrecht are explored. Keeping in mind the research objective to observe changes in fraudulent activity in years of economic downturn vs. years of economic growth and stability, Chapters 3 and 4 provide detailed analyses of fraud statistics found in yearly governmental publications. Statistics on investigations, civil and administrative proceedings, criminal proceedings and monetary penalties are also compiled and analyzed. Chapter 5 concludes the research and paper with interesting results. The findings clearly show a 2-3% average increase of fraudulent activities during periods of economic downturn when compared to years of economic growth or stability, affirming the assumption that fraud increases during recessionary periods.

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