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Why is corporate fraud so high right now? 

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cdeeneedham | Valedictorian

Posted April 7, 2013 at 8:31 PM via web

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Why is corporate fraud so high right now? 

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted April 7, 2013 at 8:40 PM (Answer #1)

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It is impossible to know for sure why any kind of crime becomes more common at any given time.  We do not understand human behavior well enough to be certain of such things.  Therefore, there can be competing explanations for things like the rise in corporate fraud.  Let us look at two major explanations that are put forward.

First, there are those who argue that corporate fraud has increased because of a lack of regulation.  In the last decade or so, deregulation has become a popular policy.  Corporations do not like to be regulated and they typically have a good deal of influence over politicians.  This is particularly true when Republicans are in control of one or more parts of the federal government because Republicans are generally anti-regulation and pro-business.  Some people argue that the lack of regulation allows corporations to engage in more fraud than would be possible if they were more stringently policed.

Second, it is possible to argue that increasing corporate fraud is simply an effect of the state of our society.  In this view, our society has become greedy and has lost some of its ethical and moral compass.  Because we have changed in these ways, people working in corporations do not hesitate to act in fraudulent ways.

Thus, it is possible to look either at society in general or at the government (or a combination of both) to explain the rise in corporate fraud.

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