FRAUD RISK MANAGEMENT – HUMAN RATIONALIZATION ASSESSMENT

Abstract

More and more organizations are now concerned with the implementation of risk management processes as a proactive function in maintaining economic and financial balance. Losses registred by both companies and employees or managers may become pressure pillars of fraud triangle, increasing the existing fraud risk within the organization. Legislative and information environment changes speed creates an opportunity for fraud and rationalization is easy to find even for people with an average degree of morality, because of the present financial instability. Fraud risk assessment on human resources is made relatively easy in terms of opportunities (lack of internal controls) and pressures (identification management style), but when it comes to the level of an individual's morality the things become complicated. This paper presents an interdisciplinary manner, based on economic sociology and behavioral sciences, factors for the assessment of individual justification that can lead to unethical behavior. Conclusions focus on the importance of building an ethical environment and continuous anti-fraud education, issues that may change the individual justification given the proven adaptability of people to different situations or environments, whether positive or negative, and rapid behavioral copying. This paper is supported by the Sectoral Operational Programme Human Resources Development (SOP HRD), financed from the European Social Fund and by the Romanian Government under the contract number POSDRU ID POSDRU/89/1.5/S/56815.

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