Part A: Foundations of prevention and detection
Introduction to criminology
Key takeaways
- Criminology explains why people commit crime, and a forensic examiner uses it to decide where controls are placed, not only to explain offenders after the event.
- Edwin Sutherland named white collar crime: non-violent crime for financial gain by persons of respectability and high social status in the course of their occupation.
- White collar crime reaches middle-class offenders too, such as accountants, mid-level managers and professionals, whose access and trust create the opportunity.
- Occupational crime, against one's own employer, is best explained by control theory and the fraud triangle; organisational crime, for the organisation's benefit, by organisational culture and differential association.
- Fraud studies find that tips detect more fraud than audit does, and that most perpetrators are first-time offenders with no prior criminal record.
Understanding criminal behaviour
Criminology studies why people commit crime, essential background for a forensic examiner because effective prevention depends on understanding what actually drives fraudulent conduct, not just how it is technically committed.
Theories of crime causation
White collar crime
White collar crime, first named by criminologist Edwin Sutherland, is non-violent crime committed for financial gain by persons of respectability and high social status in the course of their occupation, a definition still central to how fraud and corruption are studied today.
Crimes of the middle class
White collar crime is not limited to senior executives, it extends to middle-class occupational offenders (accountants, mid-level managers, professionals) whose access to systems and trust within an organisation, rather than their social status alone, creates the opportunity to offend.
Occupational crime
Occupational crime (crime committed against one's own employer, see CFFE Fraud and Corruption Schemes) is best explained by opportunity- and rationalisation-focused theories, control theory and the fraud triangle in particular, since the offender's legitimate access is precisely what enables the crime.
Organisational crime
Organisational crime (crime committed for the organisation's benefit, see CFFE Fraud and Corruption Schemes) is better explained by theories of organisational culture and differential association, poor tone at the top and normalised rule-bending spreading through an organisation the way social learning theory predicts.
What fraud studies show
Large-scale fraud studies (such as the ACFE's Report to the Nations) consistently find that:
- Fraud is more often detected by tips than by audit.
- A lack of internal controls is present in a large share of cases.
- Perpetrators are more often first-time offenders than repeat criminals.
- Losses are disproportionately larger where the perpetrator holds a position of higher authority.
The theories of crime causation converge on a small set of ideas a fraud examiner uses daily. Differential association explains fraud as learned behaviour: an employee who joins a unit where padding a claim is normal learns that it is normal. Social control theory explains it as the weakening of the bonds that ordinarily restrain, which is why a long-serving employee who suddenly faces personal crisis becomes a risk where none existed. Rational choice theory treats the offender as weighing gain against the probability and cost of detection, which is the theory behind every control that raises the perception of detection rather than the penalty.
Criminology matters to this paper because it decides where controls are placed rather than merely explaining offenders after the event.
Who commits fraud
Revisiting the perpetrators of fraud from CFFE Law Related to Fraud through a criminological lens: perpetrators typically do not fit a common 'criminal' profile, most have no prior criminal record, which is precisely why the fraud triangle's pressure and rationalisation elements, not criminal propensity, best explain their offending.
Exam tip
The fraud triangle deserves special attention even though it is formally introduced in the next chapter, it is the single most examined criminology concept across this whole diploma, know its three elements (pressure, opportunity, rationalisation) cold before this paper's exam.
Self-check
(a) State the theory of crime causation that best explains occupational fraud, and name its three elements. (4 marks)
(b) Distinguish white collar crime from ordinary street crime, per Sutherland's definition. (3 marks)
(c) Explain why most fraud perpetrators do not fit a common 'criminal' profile. (2 marks)
Show worked answer
(a) The fraud triangle; pressure, opportunity, rationalisation (4 marks).
(b) White collar crime is non-violent crime committed for financial gain by persons of respectability and high social status in the course of their occupation, distinguished from ordinary street crime by the offender's social position and the occupational, non-violent means of the offence (3 marks).
(c) Most perpetrators have no prior criminal record, their offending is best explained by the fraud triangle's pressure and rationalisation elements acting on an otherwise law-abiding individual with legitimate access, not by any inherent criminal propensity (2 marks).