Fraud victimization in Greece: room for improvement in prevention and detection

The purpose of this paper is to investigate fraud victimisation of Greek companies during the financial crisis years. Moreover, the paper seeks to encourage the implementation of proactive and reactive measures in an effort to minimize fraud victimisation.

Drawing on an extensive literature review and utilising a questionnaire administered by Krambia-Kapardis and Zopiatis (2010), auditors and management of companies who had fallen victim to fraud provided information on the typology of fraud and on proactive and reactive measures taken after a fraud incident had been reported to them. Both descriptive and inferential statistics were utilized to analyze the collected data and address the postulated research questions.

The survey has found that no industry or size of company is immune from fraud, with bigger companies and small- and medium-sized enterprises (SMEs) falling victim to industrial espionage and theft of cash and counterfeit, respectively. The banking and insurance sector appeared to be affected mainly by money laundering. Management fraud was mainly in the form of window dressing, whilst employee fraud involved predominately theft of cash and assets. Loss of reputation emerged as the main concern for the victim, and it had a determining impact on deciding not to report cases to the police.

Because of the sensitive topic being investigated and despite having assured the respondents that their anonymity would be guaranteed, the respondents were hesitant in responding. Thus, the response rate was 16.4 per cent, slightly lower than a similar study carried out in Cyprus (Krambia-Kapardis and Zopiatis 2010). The findings, however, are considered to be reliable, given the fact that the respondents were individuals well versed with the topic under investigation and in a position to know if their company had fallen victim to fraud.

The findings have practical relevance to both industry stakeholders and academics who wish to further explore fraud victimization in the Greek business environment. Given that the financial crisis in Greece is continuing, fraud risk assessment ought to concentrate in the area of cash, and preventative measures need to be considered by the regulators and the victims.

Whilst fraud victimisation studies are becoming popular by the Big 4 accounting firms, there is no fraud victimisation study concentrating on the typology of fraud in Greece. With this survey, it will be possible to draw conclusions and make suggestions to the accounting profession on how to combat fraud, at a time, when the economic crisis is persisting and fraud is expected to escalate.