Accounting for Fraud: Lessons From the Gokal/BCCI Schemes

Nikos Passas, Temple University

This paper draws attention to the systematic and organized criminal acts committed by legitimate enterprises and professionals, focusing on accounting fraud. Firstly, the extent and consequences of 'false accounting' are considered, then a theoretical framework is outlined which focuses on structural issues commonly found in financial scandals around the world. The Gokal/BCCI fraud is summarized as a case study offering insights into the motives and modus operandi of accounting frauds. The analysis centers on theoretical and practical lessons to be learned from this case, which is placed in the context of evidence from other frauds around the world. The article points to the importance of strains and pressures perpetrators are subject to, the rationalizations they use, the organizational culture and anomie.

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Updated 05/20/2006