22: Corporate Fraud: The Cases of Barings Bank, Volkswagen, and HIH Insurance

Corporate fraud is not an isolated incident. The number of fraudulent events across industries and countries belies a systemic problem. For example, a recent study identified fraud in 125 countries in 23 industry categories amounting to $7 billion in total losses (Association of Certified Fraud Examiners 2018). The increasing frequency of corporate fraud results from a perfect storm of technological advancement and more sophisticated schemes. As a result, international organizations such as the World Bank and the Group of 20 (G20) have increased their enforcement and cooperation to curb corporate fraud globally and across borders. The increased awareness about corporate fraud forces big multinationals to be more transparent about their business dealings. As a result, common standards are emerging to reduce corporate fraud. According to PricewaterhouseCoopers' (PwC's) Global Economic Crime and Fraud Survey (PwC 2018), 49% of the respondents claimed that corporate fraud has affected their companies. This recognition of corporate fraud was the highest for the preceding 10 years. For 2018, every major territory in the world reported a drastic increase in corporate fraud.