Corporate Fraud

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Chapter One: Introduction

1.1 Background

Corporate fraud has dominated the headlines of mainstream national news since the past several years. Accounting issues are now occurring all too often, constraining earnings reaffirmations, and are having a huge effect on the financial markets, companies’ books, and most critically, on the entire economy. During the past few years, the number of corporate earnings restatements due to aggressive accounting practices, accounting fraud or accounting irregularities have increased significantly and it has drawn much attention from regulators, analysts, and investors; so it is not a new phenomenon. Accounting fraud is certainly not new, it has mislead the investors, auditors and the markets alike since the early days on Wall Street. And the recent cases involve sums of money far in excess of any before.

Fraudsters often display certain warning signs or red flags that they are engaging in dishonest activity, as reported by the Association of Certified Fraud Examiners (ACFE) Report to the Nation in 2010(Report to the Nations on Occupational Fraud and Abuse, 2010). It was seen that in 43 per cent of the fraud cases, the cheats were living beyond their means. While on the other hand, in 36 per cent of the fraud cases the fraudster had been experiencing financial problems. Powell asserts that with corruption, bribery, and fraud being so widespread, it has become more and more necessary for companies to understand and perhaps implement lifestyle audits as a prevention method to crime (Powell, 2011). The lifestyle audit is called for by many sectors of government and business who believe they are necessary to expose cases of corruption and fraud and is considered by many to be an effective mechanism/tool in revealing irregular income (Powell, 2011). It is evident that lifestyle audits are used by investigators during investigations, as told by a forensic investigator while referring to their own research experience.

The prevalence of fraud continues to increase across private and public sector organizations and across states. Fraud is a worldwide problem as no nations is protected from it though developing countries and their various states suffer the most pain. The engagement that results from actual or anticipated dispute or litigations is described as Forensic accounting, which is a rapidly growing field of accounting. The term Forensic means appropriate for use in a court of law, and it is to that standard Forensic Accountants mostly work. To determine whether an individual or an organization has engaged in any illegal financial activities, the investigative style of accounting, Forensic Accounting, is used. Specialized Forensic Accountant may work for public or government accounting firm. Forensic accounting has been in existence for several years, it has evolved over time to include several types of financial information inspection. Theft embezzlement, management and employee fraud, and other financial crimes are increasing, thus auditing and accounting personnel must have training and skills to identify those misconducts, both at the grassroots (local) level and the state level to better guarantee the states prospect in the area of fraud inhibition, restriction, recognition, examination, and remediation. In making reference outside the extent of this research to enhance better need of the service of forensic accounting in Kogi State is the news reports following the September 11 attacks depicted how terrorists used the international banking system to fund to support their activities, exchange cash, and conceal their funds, and flagged a requirement for specialists to see how money related data can give pieces of information as to future dangers. These and many more such events raised public awareness of forensic and fraud accounting. Forensic accounting comprises of the use of investigative skills and accounting auditing to assist in legal matters. There are two major components involved. Investigative service that uses a forensic accountant’s skills and may require possible courtroom testimony and Litigations services that recognized the role of an accountant as an expert consultant. Association of Institute of Certified Public Accountants (AICPA’s) forensic and litigation services committee defined it as; forensic accounting may include the application of special skills in auditing, finance, accounting, law, research and quantitative methods. It also involves quantitative skill to gather, evaluate and analyse financial evidence, as well as the ability to interpret and communicate the results.

In 2012, the UK food sector represented a contribution of £96.9 billion Gross Value Added to the UK economy, with £196 billion spent on catering, drink and food (Department for Environment, Food and Rural Affairs, 2014)(, 2015). As a result, of the detection of horse DNA in a number of beef products, the subject of fraud within the sector has only recently come to the attention of the public, although the phenomenon is not a new one. Nonetheless, as a result of Professor Chris Elliott’s review and consequent report into the reliability of the UK food sector, the subject has attracted the attention that it deserves from law enforcement agencies, regulators and the industry itself, both within the UK and beyond our shores. Not to mention the financial cost, the reputational impact of the horse meat scandal on major players within the industry, has crystallised to board members, shareholders and CEOs the need to do more to counter the problem of fraud. The food sector is no different to any other and the majority of fraud that occurs relates to low value / high volume products though the high-profile cases that have hit the national press have been attributed to organised crime. Although the food safety concerns associated with food fraud are paramount, academic research estimates the cost of fraud within the UK food industry as £11.2 billion (Gee, 2014), with opportunistic fraud occurring at every stage and within every aspect of the business.

The food industry carries out multiple inspections on its food production and supply. The sharing of such information should enhance consumer protection but it will need to be carried out in a “blame-free” environment that also addresses concerns about commercial sensitivity. High standards of food safety should not be seen as a competitive matter amongst large retailers and producers. A reason for businesses that are actively involved in such collaborative work might be fast tracking to “Earned recognition” status that is less frequent regulatory involvements. There are several examples of regulators working closely with industry, to the consumer and mutual benefit, in Primary Authority partnerships (PAP) (, n.d.). Yet, this approach should not be regarded as the remedy as it may also create barriers to effective implementation. Particularly, there needs to be consideration of the impact of PAP Inspection plans that restrict enforcing authority activity. Whereas an Inspection Plan is designed to focus on areas recognized for enhancement, restricting other activities such as sampling may be counterproductive by impacting on intelligence gathering. In all business regulator relationships, there must be transparent mechanisms in place to ensure that there is no regulatory capture and that regulatory independence can be maintained.

Although the majority of the food industry is reliable, but there are elements that are not. Even in respectable organizations problems can occur as appeared in the horsemeat episode (Lawrence, 2013) and earlier in the Salmonella sullying of Cadbury’s chocolate (Carroll, 2009). Therefore, whistleblowing should be encouraged by both the employees and the reputable parts of the industry. Information received in this way will need to be carefully examined and the providers given appropriate protections. While there are clear advantages from community-oriented working, Government must keep on giving suitable assets to empower the fundamental independent regulatory checks on food business to be carried out. The on-going and current budget cuts, mainly at LA level severely threaten the ability of the local regulator to carry out necessary checks.

1.2 Research Aim

The main purpose of the research is to study whether the forensic auditing is an effective tool for reducing the fraud in the UK food sector.

1.3 Research objectives

  • To evaluate the forensic accounting frauds.
  • To study about the corruptions held in the food sector.
  • To appraise the case study of UK food sector
  • To evaluate the influence of forensic auditing in the UK food sector crimes.

1.4 Research Justification

As stated by Welman and Kruger, the adequacy of a research topic for study purposes may be judged by giving consideration to its value and viability (Welman and Kruger, 2001). Value involves demonstrating a degree of research competency or problem-solving ability and, to some extent and to a lesser degree, adding to the body of knowledge in a field of science.

Many of the recommendations in the final report relate to actions at a national level to ensure the reliability of food supply networks, but much of them are directed at groups and individuals working in the interests of the communities they serve. Fighting food crime (Croall, 2012) also requires leadership at a local level to ensure consumers have access to safe and authentic food. At the local level, tackling problems will form a key part of delivering a successful food crime prevention approach, with stakeholders working in partnership to develop preventative, coordinated approaches and deterrents to help protect consumers.

1.5 Research Structure

The structure of present research is as follows

  • First chapter provides a background of the study. Moreover, this chapter includes aim and objectives of the present study.
  • Chapter two is the literature view regarding the study.
  • Chapter three concerns with the methodology section which comprises of qualitative analysis.
  • Followed by the method chapter four provides the analysis and discussion of data on the survey questionnaire and case study.
  • Chapter five give the conclusion of the study.

Chapter Two: Literature Review

2.1    Introduction


There have been much fraud and corruption cases reported in the food sector companies in the UK and in spite of the all the measures taken to combat the concerned issue, it keeps on rising. The Fraud and Corruption involved in the food sector expand over a huge range of factors and impacts. They are resulting in social, economic and environmental losses. Before it gets too late, the companies should make an action plan to deal with them and try to decrease them in order to avoid the ultimate downfall.

Mackey and Liang (2012) indicates that when the execution of audit work (financial, management, IT, tax, environmental, government), significant financial frauds are detected; and it is due (mandatory) or desired (optional) deepen them are moving into the so-called forensic audit. The research will be required depending on: 1) the type of fraud; 2) environment in which it was committed; and 3) the applicable law. The work of forensic audit can also be started directly without a previous audit of another kind, for example in the event of specific complaints. The forensic audit is that audit work that focuses on the prevention and detection of financial fraud; therefore, the results of the forensic audit work are generally made consideration of justice, which will analyze, prosecute and punish crimes (financial, public or private corruption).

In the beginning, the forensic audit comes with attempts to detect and correct fraud in the financial statements. Subsequently, it has expanded its scope to the extent that it has developed specific techniques to fight crime and works closely in the implementation of justice.

Mantilla (op.cit), assumes that no company (which makes it extremely difficult crime detection) and the intent is the intent. Therefore, it is necessary to apply a whole new set of techniques for detection and analysis of corruption. The problem of proof (general), as well as evidence (audit), acquires a whole new dimension since they are useful to the extent that can be accepted in the courts.

The forensic audit comes within the context of an actual conflict or legal action with a significant financial loss, where the forensic auditor provides its services based on the application of knowledge related to the realms of accounting (such as financial reporting, accounting, financial services audit and control) and knowledge related financial research, quantification of losses and certain aspects of law.

A forensic audit engagement involves at least: analysis, quantification of losses, investigations, evidence collection, mediation, arbitration and testimony as an expert witness.

When acting as forensic accountants in an investigation, it implements all the experience in accounting, audit and investigations as well as the auditor’s ability to transmit financial information in a clear and concise way in court. Forensic auditors are trained to investigate beyond the figures presented and manage the commercial reality of the moment.


2.2    Previous Researches

The documentary investigation inherent to the study some work as background for the study was selected, making the proviso that the novelty of the issue found little work. To this end, Albrecht et al (2008), in the paper entitled “The forensic audit as a tool for the General Comptroller of Lara State in detecting fraud against public property”, conducted an analysis of forensic audit as a tool for the Comptroller General Lara State in detecting fraud against public property “, for it used a type of non-experimental study, because the variable was not controlled, only the situation in question, based on a field design was observed under a study descriptive, using techniques such as review of references, unstructured interviews and a questionnaire of closed questions; which it was implemented through a questionnaire of twenty (26) items, twenty (20) members from the department of administrative inquiries of the General Comptroller of the Lara State, previously validated by an expert opinion. The results were analyzed in percentage and shown in tables and graphs and then make findings and recommendations thereon. On the other hand, it presented a proposal which sets out the methodology to conduct a forensic audit. In conclusion, a forensic audit is a tool that should base its entire process to the legal field, so as to encourage further research on forensic CPAs audit.

Similarly Houck et al (2006), in their study of “Forensic Audit a new service for the exercise of public accounting”, specifies that the figure of forensic auditor acts as support to judicial bodies in order to support the allegation of crime to generate asset protection controls, reaching the conclusion that the forensic auditor is the most appropriate professional to make a commitment to perform this service, according to exist between the financial issues surrounding the implementation of the service itself, as well the fact that this type of audit is closely related to legal procedures which the public nature of the information is denoted.

Similarly, Albrecht et al (2008) conducted a non-experimental research in order to determine “Acting Professional Public Accounting as an accounting expert in the resolution of labor disputes”. By type of study, variables were not handled and the data is collected in one time and were obtained from reality, it was also supported by documentary work. The population was all CPAs enrolled in the College of Accountants of Lara State and six employees working in the Ministry of Labour. The information was collected in two questionnaires one for each sample. They came to the conclusion that there is little connection between the professional public accounting with accounting expertise and ignorance about the subject matter and made recommendations that were to be taken into account by public accountants and allow maximum participation and knowledge of accounting expertise.

In this vein, D’Ciafrè and Santiago (2003), in his study on Guidelines for Forensic Audit program as an effective tool in detecting fraud, argue that it is an alternative to combat corruption in any financial activity economic and administrative related to the judiciary. To carry out their research employed a documentary research literature, drawing theoretical discourses of well-known authors in the field and legal documents such as the Constitution of the Bolivarian Republic of Venezuela, Penal Code among others, which concluded that it is running procedures of financial audit, investigation, detective techniques to have a broader view of the process to be followed in carrying out the work; from the preliminaries to the report to the judge in court. Consequently, the information analyzed the foundations focuses on design guidelines for a forensic audit program. This study is an important contribution to the proposed research, and society expects of CPAs, greater results that minimize impunity, especially in the detection of crime or fraud determinants, to prevent fraud, theft, embezzlement, laundering money usually come to finance the illegal operations.

Similarly, Anderson and others (2000), at work “Forensic Audit as process control, monitoring and investigation of corruption in the government sector, municipal council XX 2000”, presented at the Faculty of Business Administration and Accounting from the Catholic University of Santo Domingo, Dominican Republic, analyse forensic audit as a process monitoring and control against government corruption at City Hall XX 2000 and describe the causes that give rise to it, and identify the different stages all the process in that Hall (Houck et al 2006). The study was part of a descriptive field research design. As data collection instruments observation, interview and validated by the expert judgment method is used questionnaire. The authors concluded that the city under study lacks an internal control system that allows produce objective and accurate, timely decisions necessary for economic information. In addition, the formal organizational structure was replaced by an informal structure that controls the human resources unit, personal services, purchases of goods and services, disbursements regardless of nature thereof.

On the other Kranacher, Riley & Wells (2010), in their descriptive fieldwork on “Design of a practical guide to the implementation of an internal audit approach that allows reduce the risk of fraud in commercial financial institutions’ side, concludes that currently, when the values of society are changing and technology is advancing by leaps and bounds every professional must be concerned about their formation and integrity of knowledge to meet the challenges of the next century, in this regard recommends that it is important to design a practical toolkit reduce the risk of fraud in financial institutions, which allow the inclusion in this changing world, it informs the means everything that is happening in banking, first providing a useful and necessary for the internal audit staff who work tool in the organization.

Finally, Leo Romero (2005) in his work “Alternatives in law against corruption” investigation was conducted in order to analyse the crimes committed against the “Heritage of the Nation”, statistically analyse the relationship between the number of complaints performed acts of corruption and the number of judgments handed down by our courts, in order to know the reason for impunity, taking into account the specificity of the offenses within the brand new Anti-Corruption Act (Kranacher, Riley & Wells, 2010). To obtain information from secondary sources technique documentary research through signing, selection of bibliographical sources, summary and transcription of information in the same way a case study was conducted, applied for which he went to the Directorate Protection of Public Ministry which has its affiliation eleven (11) prosecutors of the Public Prosecutor with national competition, one (1) Public Prosecutor’s Office at the National Level in the protection with special competence in Banking, Insurance and Market Capitals, three (3) prosecutors of the Public Ministry with competence in Civil, four (4) prosecutors of the Public Ministry in the metropolitan area of Caracas, nine (9) prosecutors of the Public Ministry distributed in different judicial districts and the Anti-Corruption Support Team . The subject of the research is framed in the area of Criminal Law, the Criminal Procedure Law and the probation area, constituting the acts committed against the public, offenses that required for research and testing, expertise in care the difficulties that arise along the process intrinsic technical elements of matter, the relatively high defendants in some cases become senior officials in the exercise of public power social and professional status, the failure of our justice system and complicity.

2.3    Financial Auditing (External) and Fraud

According to Singleton and Singleton (2010), the financial audit is the original, traditional, fully rationed and most widespread of these, because she was born in the profession of the auditor and because in most countries is legally mandatory for certain companies.

For this reason, the financial audit is performed by external audit firms and focuses on the analysis and study of the financial statements in order to express an opinion (opinion) on two fundamental aspects Pedneault et al (2012):

  1. Reasonableness of balances; Y,
  2. Compliance with GAAP (Generally Accepted Accounting Principles).

The financial auditor performs audit procedures necessary to determine whether the balances are reasonable; that is if they are well presented on the important, free from material misstatement (materials) that can be produced in error and / or fraud.

According to Singleton and Singleton (2010), sources of distortion of financial information give in error by distorting financial information non-prejudicial, and fraud through the distortion of financial information with the intention of prejudicial.

If the financial auditor detects fraud is concerned to establish the impact they have on the financial statements; and, therefore, it must determine whether such fraud or do not affect the reasonableness of the balances involved. It is the responsibility of the auditor to communicate to management, the board, the audit committee or the relevant control bodies, fraudulent facts found.

The financial auditor to detect fraud does not dwell on them beyond the evidence and assess the impact they have on audited balances. Deepening the detection and prevention of financial fraud is the work of the forensic audit.

The treatment must be given the financial auditor to detect fraud in the exercise of their duties described in the following standards:

–    International Standard on Auditing (ISA (ISA) – 11 Section 240 “Fraud and Error”

–    Statement on Auditing Standards DNA (SAD) – 99 (AU 316) “The Consideration of Fraud in Financial Statements “.

–    Standard on Auditing “Fraud and Error”.

In this vein, the auditor should take a proactive approach in the execution of their work assessing whether management has appropriate systems and controls to manage the risk of fraud.

Regarding fraud detection by the financial auditor, the International Standard on Auditing ISA on fraud and error determines that the auditor should design audit procedures to obtain reasonable assurance that misstatements are detected arising from fraud or error that they are material to the financial statements taken as a whole.

Similarly, the NIA says that the auditor should seek sufficient audit evidence that no fraud and error which may be material to the financial statements or, if they have occurred, the effect of fraud is properly reflected in has occurred the financial statements or the error is corrected. The probability of detecting errors ordinarily is higher than that of detecting fraud since fraud is ordinarily accompanied by acts specifically planned to hide its existence.

2.4    Forensic Source Term

The forensic term “forensic” Latin for public and manifest or belonging to the forum, in turn, derives from forensic “forum”, which means “forum” public square, marketplace or outdoor location.

In ancient Rome and in other cities of the Roman Empire public meetings, commercial transactions and political activities were held in the main square. In these forums (squares) public affairs also tried and trials were held; Therefore, when a profession provides support, advice or support for justice for the commission of a crime is judged, it is called forensic, as in the case of the following disciplines; medicine, psychology, graphology, biology, genetics, auditing and others.

2.5    Forensic Audit stages

Regarding the steps of the forensic audit there are several approaches; however, most of them agree on what important (background) is even though they differ in minor respects (shape) and the designation of a phase, or have grouped in a single phase or conversely more disaggregated phases. In this context, it is important to note that the forensic audit planning and execution must be designed with total flexibility as each case is unique and fraud procedures designed exclusively for each investigation is required, may be similar but never identical cases.

According to Kayrak, (2008), the stages of the forensic audit are:

  1. Planning: To conduct research planning is necessary according to the fact, situation or matter presented, noting the availability and provision of information that can provide for the determination of reality or existence of the facts, taking that this kind of planning is continuous adjusting it according to changes in the liability initially acquired, as in the case of new developments as they arise.

Although they may initially be difficult to develop the most adequate or accurate as possible planning, because you can hire the forensic auditor based on hearsay, evidence or few accurate findings, it is believed convenient to carry out planning, to the extent possible, considering various aspects are very important, clarifying that may not be the only ones. In any case, experience in practice where a forensic auditor will lead to amendments or additions more convenient and complete, that would imply intervention updates; of course, provided that it has the proper authorization from the customer.

It is noted that in the event that a forensic accountant auditor was named in a lawsuit, should develop a rapid program according to the purpose and reason of the expert opinion commissioned in order to meet present and with due diligence and efficiency its opinion.

In the case of the forensic auditors who are record-keeper in relation to planning, policy making or act in accordance with regulations prompted by the relevant body.

According to Kayrak (2008) which generally will develop planning aspects set out below, adjusting or adapting according to the performance run as independent forensic auditor, appointed public official or expert in a trial:

– Objectives initial particular, according to the intent and purpose of the investigation, be it by a complaint or not.

– Definition of the methodology to be acquired according to the agreement or the internal regulations of the institution to which the official is assigned.

– Establishment of fees and upfront costs, which in the case of public officials who perform this work does not proceed.

– Have knowledge of people and areas allegedly involved in the facts or in suspicious circumstances.

– Tentative Delivery of the report or, in any event, within of evidence.

– Availability of information within or outside the company or the corresponding legal authorizations that lead us to provide reality or existence of the facts, so to be assured on the results of the investigation.

– Freedom large enough to carry out research within and outside the organization, independent, objective and complete.

– Reserve wide enough in the work to be performed by the forensic auditor by the contracting customers, before and during the performance of work.

– Opportunity to perform work taking care that the start date is not disclosed to warn staff which is suspected to be involved in the facts.

– Equipment to be used, if necessary, with appropriate experience in the matter to be investigated; must supervise and monitor the work rigorously; thus avoiding negligence or error of any circumstance that may arise in the routine tasks of review, comparison, evaluation, collation and more.

– Development of a specific tentative program, using the techniques or by establishing specific procedures for the collection and organization of information to be provided by the actual facts, which ordinarily are not used in financial audit and those common should be considerably extended in their scope.

– Other, according to the situation or specific facts that warrant their inclusion.

According to Labour and Kayrak (2008), consider that the methodology presented should not be considered as a rigid model, as in determining the tests must be freedom (under the principle of legality), playing an important role in the creation and professional freedom, based on knowledge and experience. This is why the research involves linking the experience, through thought, the technical discipline, and professional work, including, of course, the legal issues surrounding the facts.

Similarly, it was considered important to refer to Kayrak (2008) again by providing theoretical contributions to this research in terms of methodology to be followed, which the authors should have a dynamic and procedural nature, avoiding conceive a job with significant constraints on testing to determine.

2.6    Fraud and Corruption in the Food Sector

2.6.1    Fraud in the Food Sector

Food fraud is generally accepted as a deliberate action carried out for financial gain. Different types of food fraud include adulteration, counterfeiting, substitution and intentional mislabeling of goods; as shown in the figure below.


2.6.2    What is Food Fraud?


These fraudulent practices have been going on for centuries– from the coloring of preserved fruit and vegetables with copper salts in London to the sweetening of wine with lead in ancient Rome in the 19th century. Food fraud has increased in importance as a result of our multifaceted global food supply chain and costs the food industry an estimated $49 billion each year (, 2016).

According to the statistics, food fraud is on the rise. A report by the UK National Audit Office discovered that local authorities registered almost 1,400 new reports of food fraud in 2012, up two‐thirds on 2009 figures (Fighting Food Fraud, 2014).

Food deception is dedicated when the foodstuff is consciously positioned on the marketplace, for economic improvement, with the purpose of misleading the customer (Armitage, 2015).

Though there are numerous types of foodstuff deception the two foremost categories are:

  1. Sale of food which is unhealthy and hypothetically destructive

Animal reprocessing of waste products enter into the foodstuff chain

Protective material of packaging and marketing of beef, poultry with an unidentified source, evocatively vending food items which are expiry (Armitage, 2015).

  1. The thoughtful miss depiction of foodstuff

Products relieved with an inexpensive substitute like cultivated salmon vended as desolate and rice Basmati contaminated with inexpensive diversities (, 2013).

Fraud in Food might also include the auction of meat gain from the slaughtered animals illegally and also wild animals that have been embezzled as well as desolate disposed creatures e.g. deer that have stolen (Armitage, 2014). Food that is distorted in wrapping and appearance, whether intentionally or by coincidence is measured to be dangerous and must be described (Armitage, 2015).

The UK foodstuff business now has vigorous processes to guarantee that they distribute the first-class foodstuff to customers and foodstuff industries must have a lawful responsibility to support the honesty of foodstuff they trade. It is correctly extremely observed transversely the biosphere and the requirement not let whatever weaken this or the self-assurance of customers in the honesty of their foodstuff (Fortado,2015). Food minister Huw Irranca-Davies which is termed for the prime minister to contrary his “injudicious judgment to splinter the Foodstuff Principles Organization” which intended that accountability for foodstuff protection and truthfulness had been alienated (GS Systems, 2014). Both the Foodstuff and Beverage Amalgamation and the British Trade Association, which exemplify industrialists and superstores correspondingly, said their memberships had familiarized additional payments on the honesty of their foodstuffs meanwhile it arisen former this time that certain meat envisioned for human depletion had been polluted with horse meat (,n.d).

The Overseas Unethical Performs Act, the U.K. Bribery Act, and other anti-corruption verdicts and instinctive demands are troubling foodstuff merchants and originalities feat business overseas, as supervisors hold corporations accountable for the activities of third-party inclusions (Dean, 2004). Corruption action, which disturbs commercial processes, corrodes products, and compensations statutes are an elongated and stimulating procedure for any corporation. Companies can be penalized more than $2 million or double the improvement on an agreement, for a solitary FCPA defilement (, 2014). Personages can similarly face the aspects momentous penalties, incarceration. U.K. execution organizations evaluated about $1.7 billion in FCPA fines in 2010 (Pimentel, 2014)

The punishments are mainly precipitous for administrations and entities imprisoned of pardon the U.S. Impartiality Sector sounds “wilful blindness” not exploit whatever they ought to obligate and disregarding deception that has penetrated a worldwide source chain. Under FCPA, corporations, and personages, comprising generals, administrators, stockholders, workforces or representatives of a U.S. corporation may carry the obligation for the movements of representatives, advisers, and suppliers. In accumulation, they’re accountable for subordinate movements. £182 Billion quantity of UK foodstuff and beverage spending in 2010 and in 2009 this amount scarcely raised as large amounts discouraged customers. The UK created 73% of ‘indigenous-type foods’ in 2010 which is around 60% autonomous when trades and confined depletion are established in contradiction of manufacturing. Food industrialization is the UK’s solitary major industrialized zone. The foodstuff and beverage supply chain are a main portion of the UK budget, secretarial for 7% GDP growth, retaining 3.7 Million individuals and producing £80 Billion annually. Jobs: the agro sector of food completed up to 13% of UK nationwide service in the first four months of 2011(Armitage, 2015). The 1/3rd upsurge in the foodstuff area without cultivation from 2000 to 2009 in Britain and the entire budget of UK augmented about 47% in the same period of 2011. The food area has fewer possibilities for development because of incomplete customer consumption volume and consequently trusts on excellence enhancements. The usual UK domestic currently dedicates near 9% of its disbursement on foodstuff, which is dejected from 16% in the year of 1984 (Armitage, 2015). Whereas £164 million quantity devoted by Defray and the food industry in farming investigation and expansion per year. Total estimation of about £15 Billion is the overall expenses of animal sicknesses to the UK from the past 15 years done manufacture fatalities and application of regulatory approaches (Fortado, 2015).  Employments vs. competence: service in foodstuff and beverage industrial has dropped by 21% subsequently from 2001, therefore pouring efficiency development of about 27% ended in the same era. UK foodstuff employment differences: £18.5 Billion which is based on £32.5 Billion imports and £14 billion exports from the year of 1995 the difference of trade increased (, n.d).

2.6.3    Corruption in the Food Sector

Corruption has been defined by the World Bank (The Role of the World Bank, 1997) as the abuse of public office for private gain. The opportunity to act in an exploitative manner occurs in a number of ways. An example is the availability of payments that can be obtained from those requiring a commodity or service that significantly exceeds the official price demanded of the consumer. Command economies that seek to control the supply of commodities are seen by some as ideal breeding grounds for such corrupt practices (Lui, 1996).

Corruption in the health and food sector can be classified into four main types – bribes, theft, bureaucratic corruption and misinformation (EN: Regulating entrepreneurial behaviour in European health care systems, 2002). Each is motivated by the potential gain from exploiting one’s position in the system- either direct financial gain through individual or institutional financial transactions or, more increasingly through an increase in power and influence.

2.7    Impact of Fraud and Corruption

2.7.1    Fraud

Food fraud affects consumers, businesses, and ultimately the economy. If customers buy horsemeat, e.g. when they intended to buy beef, they are paying a high price for a cheaper substitute. The adulteration of food also poses potential health risks. Even though the EU is considered to have some of the toughest food safety regulations in the world, but consumer confidence was shaken when the horsemeat scandal arose, and it was a matter of food fraud rather than food safety. There was the particular alarm in the UK and Ireland where horsemeat is not commonly eaten. And this is not the only one, there are more such cases reported in the past.

Some of the Intolerant Food Fraud Cases reported in the UK (Poulter, 2008)

These fraud cases have sown the seeds of doubt and unreliability in the hearts of the consumers. Since agro‐food provides work for 48 million people in Europe, being the second biggest industrial sector, and the food chain is worth some €750 billion a year the food industry, politicians are eager to see consumer confidence rebuilt (Fighting Food Fraud, 2014).  As observed, food fraud and corruption are affecting a lot of areas and the food sector should find out effective ways to tackle and prevent it.

2.7.2    Corruption

The effects of corruption in the food sector have many dimensions related to economic, social and environmental effects. If governments do not control the corruption existing, it can lead to escalating costs and a misallocation of resources. Furthermore, corruption is said to have been factors for the downfall of many organizations as it weakens their structures, reduce productivity, hinder in development, creates social unrest and then eventually leads to their decline (, 2016).

Corruption discourages people from working together for the common good and promotes social inequality, hatred, and insecurity. Demanding and paying bribes becomes the tradition. While the economic effects of such corruption can be categorized as minor and major and both in one way or the other have the severe impact on the individual community and country. Most importantly, corruption leads to the reduction of national wealth. Corruption is to be blamed for increased costs of goods and services, conversion of public wealth to private and personal property, imbalanced economic development, weakling work ethics and professionalism, diversion and misallocation of resources, inflation, hindrance of the development of fair in market structures and corrupt competition thereby discouraging competition. Large scale corruption hurts the economy and impoverishes entire population.

2.8    Ways to combat Food Sector fraud and corruption

The fraud and corruption in the food sector are a serious and intolerable issue. There are different measures which the management keep adopting to avoid such conditions, but these problems exist and affect the food sector in so many ways. It is seen that the level of accountability is important in moderating the amount of fraud and corruption. As they say that, if the decisions by officials are openly known and subject to close public accountability the risk of such happenings might be lower (EN: Regulating entrepreneurial behaviour in European health care systems, 2002).

2.9    Some useful steps to begin with in order to predict, avoid and eliminate such activities are:

  • Understanding the risks, routes to their potential exploitation, and the tools available to discover fraud, abuses, or wastage.
  • Analysing numerical data, comparing actual costs against expected costs.
  • Examining possible reasons for inconsistencies.
  • Contemplating whether secret detection techniques might be more appropriate when investigating cases of probable fraud.
  • External auditing specialists can also be of a great help. Their extensive experience of complex forensic audits can offer industry-specific involvement, advanced interviewing procedures and auditing management expertise. A combination of these external specialists and companies’ internal auditors can achieve shorter audit periods and lower levels of disturbance to the business (What Is Forensic Auditing,? 2016).

After considering all these techniques, what seems to be the most convenient is the external assistance (i.e. Forensic Audit). As Forensic Audit may not disturb the business, it remains an efficient method, it is assumed to be the best in analysing numerical data as the inspection involves looks into all the factors, it is a comprehensive tool in examining possible reasons of discrepancies and risks, and it can help in detecting exploitations and fraud. Thus, keeping everything on one hand and Forensic Auditing on the other, Forensic auditing outweighs it.

2.10    Forensic Auditing – as an effective tool to fight Corruption and Fraud in the Food Sector Companies

How can Forensic Auditing help the food sector?

Forensic auditing is a blend of traditional accounting, auditing, and financial detective work (What Is Forensic Auditing? 2016). Fraud investigation, forensic accounting, and/or fraud auditing put things together rather than take them apart. Forensic auditors design their audits to gather evidence to prove the existence of fraud and corruption. And they often have to give expert evidence at the eventual trial (Crumbley et al.,2005).

The sceptical mind-set is something that has long been in forensic accountants and other internal investigators when inspecting for evidence of fraud. The investigator generally has asked a set of questions different from those of conventional auditor, i.e. the one who is monitoring the financial statements, to see whether they are in compliance with generally accepted accounting principles (GAAP) and, by this means, fairly represent the financial conditions of the corporation (Silverstone and Sheetz, 2007).

2.11    Forensic Auditing as the Game-changer for the Food Sector Companies

Forensic auditing can be really helpful in combating the fraud and corruption issues in the food sector companies.

  • It supports regulatory mechanisms, be they potentially disastrous one-off events that could threaten the viability of the business, or smaller-scale but repetitive misappropriations of company assets over a number of years.
  • Companies under review by regulatory authorities can find forensic auditing important as it is vital to ensure regulatory compliance. For instance, it can also be useful in helping companies ensure that their anti-money laundering processes are both effective and robust.
  • Forensic auditing can help guard organizations from the long-standing damage to reputation caused by the publicity associated with insider crimes. This will help the food sector save and maintain their reputation as quality food providers, and it is really needed. Not only this, a forensic audit also provides a sound base of factual information that can be used to help resolve disputes in case the victim seeks legal redress.
  • Food Sector companies might observe efficiency in their business as the forensic auditing may identify areas of waste for them.
  • Forensic auditing improves transparency and probity in the way resources are handled, in both private and public entities, and help with the detection and recording of potential conflicts of interest for executives(What Is Forensic Auditing? 2016).

Researchers see Forensic Auditing as a game-changer for the food sector and they highly recommend them to go for it.

2.12    Forensic Audit – Fraud and Corruption Management

Forensic accountants are also gradually playing more proactive risk reduction rules by designing and performing extended techniques as a part of the statutory audit, helping in investment analyst research, acting as advisers to audit committees and fraud deterrence engagements.

Fraud and corruption management involves a whole gamut of activities: early warnings and alarms; tell-tale signs and patterns of various types of frauds and corruption; profiles of users and activities; fraud and corruption detection, inhibition, and avoidance; minimizing false alarms and avoiding customer dissatisfaction; assessing losses; surveillance and monitoring; risk analysis; security (of computers, data, networks, and physical facilities); data and records management; gathering of evidence from data and other sources; links to management information systems and operation systems (such as billing and accounting); report summaries; data visualization; and control actions (such as employee education, prosecution and ethics programs, hotlines, and corporation with partners and law enforcement agencies) (Ulucan O¨ zkul and Pamukc¸u, 2012).

Higher-profile full forensic audits can deter future fraud but could also reduce the chance of witnessing the culprit carrying out a deceitful act. These practices might help the food sectors in the UK in predicting exploitation and deception issues to some extent and making a counter plan to tackle them. One step in the right direction can save and restore the UK food industry’s reputation and quality.

2.12.1    What next?

NSF International, a global public health and safety organization, has brought together an expert group of food regulators, scientists, academics and practitioners to help further define the food fraud problem and provide guidelines and best practices to help safeguard against it. According to Tom Chestnut, vice president at NSF International’s Global Food Division, growing engagement and collaboration are necessary to protect our global food supply. Therefore, they suggest that the companies need to focus primarily on the following to lessen or prevent food safety hazards:

  • Many companies have already implemented ways to counter global fraud threats; however more is needed to be done. Companies need to become more proactive in addressing economic adulteration.
  • Engage government as a facilitator because governments can establish global standards and share intelligence on emerging threats, which is essential to addressing threats that are further magnified by globalization, more cohesive supply chains and a global consumer base with similar requirements.
  • Owing to complex challenges in today’s food supply chain, most of the world’s largest food retailers are now mandating supplier certification to Global Food Safety Initiative (GFSI) schemes (Pimentel, 2014). So, another possible solution is certification to global food safety standards.
  • Ensure Farm-to-table responsibility.

Don’t let the cycle break, keep undergoing audit sessions. If the audit is conducted more often, the culprits might become afraid of getting caught and may not try to cause any harm to the company, its resources, and reputation.

2.13    Fraud costs food sector £11bn a year

According to a novel report which is written by Professor Lisa Jack from the  University of Portsmouth’s Centre for Counter Fraud Studies and the head of forensic and counter fraud services for PKF Littlejohn Professor Jim Gee give their perception related to the fraud issues in food sector in UK in which he said that in the UK food and drinks registered companies can be loss approximate greater than £11.2 billion per year because of fraud and miscalculation comparable to more than 85% of their overall revenues (Malnick,2014).

The investigation studied statistics from the registered companies of about 37 food and drink industries along through entire yearly transactions is about £200 billion (whit,n.d).

According to the study:

1)    The industries of food and drinks could enhance its effectiveness by £4.48 billion and recognized more than 34% by undertaking deception.

2)    Neglecting fraud and inaccuracy would make corporations more economical and permit them to decrease expenses for the purchase.

3)    The cost of foodstuffs might be the bargain buy as abundant as 5 denominations in each pound.

Technical analysis and organizations reviews have a habitation but the fraud of food alike any additional scam can also be undertaken if track the cash, ask the correct queries and have panels in residence that sort impostors think double before offensive the industry (, n.d).

According to the Professor Gee, he said that the fraud of food results in increasing the food items more expensive as compared to their actual price and dropping deception could ominously progress worth for currency (,n.d). He further said that the fraud of Food and beverage is the corruption in our carriers. By harsh scam the worth of foodstuffs could be cheap by 5 pence on the bread loaf; 11 pence will be less on 6 eggs while 16 pence on beer and in a bottle of wine 28 pence will be reduced (Maxwell,n.d).

Estimation occurs in which 58 registered food and drink companies which described incomes, 6 would upsurge their productivity by amid 1% and 9% while 31% can do by among 10 to 49%, 15 would do so approx. 50 to 99% while 6 registered corporations would surge their productivity by greater than 100%. 15 corporations who made fatalities in which 3 can make a revenue, not a loss while 8 companies decrease their fatalities by10%  and 4 organizations  by more than 10% (Boucher, n.d)

2.14    Food and drink fraud are the crime in our baskets

Food and beverages deception is the corruption in our carriers. It can clue to less economically constant foodstuff and beverage enterprises and, therefore, its decrease dismiss expressively recover productivity; it consequence in foodstuff and beverage being extra costly than it would be, so its bargaining level can expressively recovery for money and possibly decrease the budget of the foodstuff that can purchase (,2014). These optimistic consequences ascend from the economic welfares resulting from the discount of the noteworthy changes which deception signifies (The Economist, n.d).

2.15    Fraud is endemic in the food and drink industry – and it’s costing you money

Deception is so prevalent in the companies of UK food and drinks industries that it expenses the state more than £11 billion per year, according to a disturbing novel documented report in which the detection of greater than 3% of it becomes noticed (Cahill, 2012). Publics are tapping off money at each phase in the resource chain, with each contributor short altering the subsequent, either it is in the type of excellence or amount, by relieving components, created untrue entitlements or just burglary cash (Cahill, 2012).

2.16    Reducing Deception and Exploiting Worth of Food and Drink Sector 2014 in the United Kingdom

The report which is named as “Minimizing Fraud and Maximizing Worth in the UK Food and Drink Sector 2014” were inaugurated on 25th Nov in Conference at the Foodstuff Corruption which was held in London and planned and arranged by the Food Safety Integrity & Protection Institute incorporation with the Commissioned Institution of Ecological Healthiness (Willitts-King, 2005). It also includes robbery, bountiful marginally fewer than the decided quantity, relieving components, like a horse for chicken and appealing carbon-based status where nobody is deserved. According to the documented report which is named as “The investigators” were also envisioned the price of dodge by investigative the expenses and proceeds of 73 corporations in the UK of foodstuff and beverage. Fraud adds 9% to the rate of a £1.70 chunk of margarine, 3% to the price of a 49% on lettuce and 16% on the cocktail (Han Shih, 2013).

Chapter Three: Methodology

3.1    Introduction

This chapter states the methodology applied in this study. It emphases on the explanation of the methods applied in this study and generated knowledgeable consequences. This chapter illuminates all specific strategies and the foremost determination for selecting them. It is also accountable for the rationality, validity and the consistency of the exploration and analysis. The motive for this segment is to the emphasis on the method used in the thesis. The study is assembled on data of primary as well as data of secondary; however, the proceedings are solely quantitative.

3.2    Research Philosophy

In order to seem with a worthy study, the exploration viewpoint is of the amalgam form. It approaches down beneath realism, which is a combination of positivism, concludes and subjectivism. This technique was designated depend on the exploration queries and also be contingent on the researcher’s consider to these philosophies in supporting to acquire the premium consequence or statistics for the study in edict to originate a consistent consequences and assumptions (Hughes et al., 1997). There are two research philosophies that are; Ontology and Epistemology beliefs. The technique of Ontology is basically a method that entirely be prejudiced by upon the proficiency of the detective and the abilities, methodologies and the assurance of the investigator complement to the research accomplishment (Gill and Johnson, 2002). The philosophy of Epistemology is not an exertion by a particular individual but armoured by the theoretical activities of collecting statistics and it deals with rationalized facts for the study (Black, 1999).

For this exploration, the suitable exploration beliefs can be obtainable as the epistemology inquiries study that acquire statistics from the occurrence to recognize forensic audit as a tool to fight fraud and corruption in food sector companies in the UK.

3.3    Purpose of the research

The expansion of the objective and analysis query should be the motive of choosing the precise examination approach. There are three methods from which we can establish an appropriate approach of the investigation studies in which explanatory, exploratory, and descriptive are included.

3.3.1    Exploratory study

The experiential study is intended to allow the examiner fundamentally aspect proximate concerning to assured recognizable statistic, using the determination to generate reminiscent perceptions. According to Patel and Tebelius (1987), the perception is to gather applicable facts concerning towards the specific problematic situations. An exploratory study is often used when a situation is indistinguishable predictable, or the obtainable evidence is not sure. Consultation is the pre-eminent appropriate technique for gathering evidence while considering the empirical study.

3.3.2    Descriptive study

Patel and Tebelius (1987) specified that this is given that in the enlightenment of numerous understandings connected to individuals, conditions or occurrence that occur. The experiential simplification is the foremost purpose of it. Such impressions are appreciated once it elucidate and foremost the enlightened philosophy (Reynolds, 1971). Moreover, descriptive study is normally executed when a delinquent is straightforwardly identified and there is no detached to discover the cause-effect relations (Wiedersheim-Paul & Eriksson, 1999). This form of study generally endorses when the facts are normally subordinate, so as to articulate diminutive sorts of a noticeably intended delinquent (Aaker & Day, 1990).

3.3.3    Explanatory study

The objective currently is to evolution precise philosophy that can be implemented to clarify the experiential generalization (Reynolds, 1971). Fabricated on this, the researcher articulates assumptions that are established empirically (Patel & Tebelius, 1987). Yin (2003) specified that descriptive study focused when there is a cause-effect relationship, instructive what foundations shaped what impacts. According to Aaker and Day (1990), the explanatory study technique can be trained when it is obligatory to demonstrate that one modification possessions or normalizes the significance, once a problem is rigid to regulate. Such kind of study is also appropriate when it not occur an unadulterated apprehension around which instance that intend to be disbursed and what capabilities and relations that are substantial (Wiedersheim-Paul & Eriksson, 1999).

This study was originated on analytical method because this study was initiated on the associated review reflected later in this section. This study environment aided to explore new about the study refrain and propose a distinction of indication that influence clues to the outcomes of new inventiveness or complications that obligatory to be addressed.

3.4    Nature of Study

According to Phillibers et al., (1980), on the explanation of the statistics assortment twofold approaches are extensively castoffs that are quantitative of explanatory and the research design of empirical qualitative.

3.4.1    Qualitative data

According to Saunders, Lewis and Thornhill, (2011) data gathering is non-numeric in the qualitative study. The foremost determination is thoughtful by the worth of overwhelming additional confrontations or statistics; in its place of inventing descriptions and audio-visual records can be functional inside the study to enhanced facts.Qualitative methods aid investigators to distinguish performance human well. As Fossey et al., (2002, p.717) exposes its engrossment around the qualitative investigation that growing an understanding of the pointing and information possibilities of entities’ lives and social worlds.

3.4.2    Quantitative data

In discrepancy, the quantitative study is basically the assortment of numerical approaches. The collected facts and data have to be diminishing with and inspected to produce the consequence. A suitable method of influence such category of data collection is to practice figures charts, tables and visual information distribution to conclude, portray, choose and scrutinize associations and tendencies close inside the data” (Saunders et al., 2011).

The approach implemented occupied the report from previous studies and study applied secondary approach to critically analyse the aim and objectives set for this research.

3.5    Ways of conducting research

There are three ways to conduct a research:

  1. Induction method: On the conflicting to the logical methodology, inductive approach is a bottom-up technique. It shifts from elucidations to comprehensive descriptions and perceptions. This method pledges with enlightenments and admittance to recognize summaries and reliabilities and coherent certain theories that can deal with and lastly turn out to emerging various wide-ranging theories and conducts (Tracy, 2012). As the inductive method is embedded on investigations, it is extensively used in science. Though, it is not all the time right to suppose that an entire assumption is accurate. With respect to nature, the inductive approach is more investigative and open-ended. This method progresses and built on interpretation, experiments and case studies, therefore, it permits possibilities for extra studies to enlarge its analysis.
  2. Deduction method: The deductive approach pledges from the simple or general matter in the approach to the more accurate and certain. It is also reflected as a top-down way. It twitches with an indication about the concept then efforts it down into more precise testable theories and suggestions. Then come up with the collection and assembling of data to direct the hypotheses. This finally accomplishes to verify the assumptions with precise data as the endorsement of the creative theories (Manna et al., 1980).
  3. Abduction method: The abduction method of study includes explanations and perceptive to enlighten the concept (Kovacs and Spens, 2005). This kind of study can also be considered as ‘intellectual from influences to reasons or clarifications’ (Lamma, Mello, Milano and Riguzz, 1999).

3.6    Techniques for Data Collection

Primary, as well as secondary data, is gathering for the research study.

Primary data

There are two strategies of research that are used to gather primary statistics, for instance, quantitative research approach and qualitative research approach. Quantitative research methodologies measure the reconnoitre consequences to develop the final inference and it every time elaborates with logical exploration analysis and positivism attitude as well (Marshall and Rossman, 2014).

For this study the Secondary data assembled by means of assessment method. Self-administrated reviews via online approaches will be given out in the assortment of the sample and the outcomes are structured with the Research papers, Google Docs, Analytical reviews, descriptive reports and Survey form is created by assembling various questions.

Secondary data

It is a realistic another source of material which presents comparative and suitable data that can progress in other conclusions. Secondary data assortment will embrace with other third-party records, case studies and newspaper articles, former researchers obtainable in the articles of the journal, records, and other theoretical literature. The perceptions obtained and variables recognized will be cooperative in scheming queries for the primary (Donnellan and Lucas, 2014).

This study has begun with describing and distinguishing the concepts and then progressing to study empirical technique can be active for this exploration. As deductive method permits to necessitate a qualitative inquiry, this study is accumulated on deductive technique. So, study first composed the secondary indication with respect of perceptions, beliefs and existing empirical evidence regarding forensic auditing. Then Secondary data has gathered from the pre-determined sample so as to critically analyse the main theme of this study.

This study has involved two phases. In the first phase, important theories and beliefs were considered so as to gain simple perceptions and know projections for creating the study regarding the previous literature and studies regarding forensic audit as a tool to fight fraud and corruption in food sector companies in the UK.

3.7    Case study investigation

In the field of social sciences, case study place a significant role, in certain studies of ethnographic and anthropology (Voss et al., 2002). According to Westbrook (1994), Kurt Lewin was the creator of field theory, which between other things, highlights the implication of seeing the general conditions rather than abstracting certain variables from a circumstance.

While case studies are usually measured to be qualitative studies, but it not only a qualitative but the quantitative approach may be also suitable. Therefore, case studies can be created on qualitative and quantitative proof as well (Yin, 1994). It is an objective, detailed analysis of an existing occurrence where the researcher has slight commands over concerns (Yin, 1994). This clarification masks numerous important facts.

3.8    Methodological Approaches in Case Study

According to the Lalle (2003), researches having more than one case study include a constant cycle of the interface between theory and its follow-ups, confirming that research having case study is significant as well as demanding.

Phase 1: Foundation

This stage encompasses two foremost steps, (1) literature review (2) selection of particular case. A review of the literature is the appropriate tactic because it is an essential pace in constructing an investigation area and practices an essential portion of any study. Seuring and Mueller (2007) categorized review of the literature as an archival research method. Additionally, theoretical outlines have been established built on a detailed review on the literature.

Phase 2: Induction

This phase also contains the two foremost steps that are (1) data analysis of case study and (2) determine of assumptions. By the two dissimilar perception case data can be examined, firstly analysis of data inside the case and then cross case analysis. As the analysis complete its schemes, estimations and hypotheses are obtained and associated with the data analysis previously.

Phase 3: Iteration

Theory modification was done in phase 3. The research quality requires to be confirmed by productive analytical consideration on production awareness, its possibility, and the degree of its implication. In advance, the fresh theory has to attach into the previous works. If the study is not come to an end it can be further analysed. Getting towards the conclusion is the precursor for the end phase, where the fresh concept is assessed.

Phase 4: Conclusion

This part is a conclusion phase in which directions for future studies are also recognized in this phase.

3.8.1    Case selection

In this research, we have been focused the auditing tools and procedures in order to audit on the registered companies food sector in the UK and to detect the food frauds which are being attempted in the UK.

3.9    Triangulation

According to Becket and Turner (2001), triangulation is the combination and approach on the perspective of numerous studies of the similar phenomenon. Linking several viewers, procedures, theories, and experimental provisions, academics can expect to overwhelm the weakness or necessary preferences and the complications allied with the method having the single observer and single theory research. It comprises traverse analysis of proves by means of obtaining data from numerous source, correlating and contrasting one finding with the other. Triangulation is often availed to specify that various techniques were set up in the study in order to verify the results twice or thrice. This technique was used for the result confirmation and to prove the consistency and validity of the collected data. In this research, we used the secondary information to gather relevant data.

3.10    Research Quality

The research quality endures a noteworthy accomplishment tool of the entire project of the research. Novel researches ordinarily bring about latest consequences whose precision requires being certain so as to depict precise hypotheses. Therefore this associated determination assigns with two foremost features that most affect the quality study – Reliability and validity.

3.10.1    Reliability

While the word ‘Reliability’ is an awareness applied for analysis or assessing measurable study, the thought is most frequently applied in all categories of study. If we understand the conception of examination as a method of material elicitation then the highly significant test of any qualitative research is its quality (Lyle Essey, 2015).

An upright qualitative study can aid us to comprehend a condition that would then be puzzling or unclear (Eisner, 1991). Stenbacka, (2001) stated that the idea of reliability is still deceptive in qualitative research. If a qualitative study is examined with reliability as a standard the importance is somewhat that the research is no good (,2013).

On the contrary, according to the Patton (2001), dependability and validity are two features which any qualitative scholar ought to be alarmed about whereas constructing a study, examining results and assessing the study quality (mang.2016).

3.10.2    Validity

The perception of validity is defined by a wide range of conditions in qualitative studies. This thought is not a specific, enduring or worldwide concept, but somewhat a depending concept inevitably deals within the processes and aims of specific research methodologies and projects (winter, 2000).

3.11    Limitations

It has been clearly explained that this research study was completed with the help of secondary method of collecting data, so there will be more limitations in this case.

Inclusion Criteria

  • The Only UK Based Study
  • Frauds in food sectors
  • Research papers of 2005-2016
  • Scrutinized papers

Exclusion Criteria

  • Other Europe Countries
  • Other sectors
  • Prior to 2005 research papers

3.12    Ethical Consideration

As the study of philosophies, ethics is primarily practical philosophy whose task is not exactly resolved conflicts, but to raise them. As the study of principles, ethics is primarily practical philosophy whose task is not exactly resolve conflicts, but to raise them. So in this study whatever information and idea that have been written is entirely secondary and in this study possible referencing and citation was done in order to avoid an ethical issue. The credential for keeping human study contributors by the university will be ended prior to begin this research.


Chapter Four: Discussion and Analysis

4.1       Crime and Fraud in Food

This section covers the descriptive view of fraud and crimes in foods which are particularly used in the same concept but have discrete features. Fraud in food includes cautious and premeditated replacement, accumulation, altering or falsification of food, food components or foods wrapping false and deceptive declarations are made in order to increase their growth financially and economically by false means (, 2012).

4.2       Types of Fraud

  • Corruption
  • Fiddling
  • Artefact infested
  • Robbery
  • Distraction
  • Imitation
  • Imitating

Food deception can become the corruption of food until it’s not involved in the act like reprobates in the food sector but it becomes a prearranged action, whose intension is to cheat others in this sector or damage who can buy food stuff with fully trust (, 2015).

There is continuously the probability in food fraud which gives unembellished disorder, or in the vilest situation death will also happen due to the ingesting the adulterated foodstuff or foodstuff which is not actually it claim to be (, n.d). Different trepidations have been articulated through this investigation that the word foodstuff deception produces an impress of certain low level violation of the instruction of inoffensive negligible obstacle of technical regulations of the kind that many hard-pressed businesses may be desirous to resort to in problematic periods. The thoughtful culmination of food scam is systematized corruption and the revenues can be ample. The commendations will not stop foodstuff corruption but are envisioned to create it abundant more challenging for offenders to function in UK (Women’s Health, n.d).

4.3       Food Crime Drivers

The food manufacturing has the enormous significance for the economy in UK. In 2013, £196 billion is the total estimation related to the expenses of customers in the UK on foodstuff, beverages and cuisine while, £24 billion is the gross worth auxiliary of the foodstuff industries in UK (Google Books, 2013). The worldwide foodstuff marketplace contributes in the UK purchaser’s admittance to all kind of products which are seasonal and non-seasonal and has developed a tremendously difficult classification. Customers have habituated to variety and entrance at small charge, and at minimal revenue to dealers. These are the basic aspects that have increased the opportunities for foodstuff offence. As the industry of food is more reliance on international components there is a emergent consciousness of the significance and complication of assertion in foodstuff resources networks. Later the meat of horse flesh happening there has been a severe exertion by productivity to rationalize source of supply chains where possible. The food manufacturing in UK is very expensive and there is an incessant inventiveness to decrease rates and exploit incomes (, 2014).

Consumers can expect from the government and from the food industries to deliver the food items should be safe and without the interference of any criminal activity. Consumer can trust on the food that they consumes and purchase

Each source restraint is distinctive, presenting that there is no single methodology to guaranteeing supply chain reliability (WSJ, 2013).

The analyses have many examples of good industries like McDonald’s and Morrison’s

Fraud in food is considered to be a major crime because from this people are highly affected by their health and sometime many sever that causes death due to this crime, it’s not a victimless crime and whenever fraud in food occurs in the supply chain network. Wherever fraud occurs in the supply chain, the costs get high on to customers. Food manufacturing Industry claimed to be the victim of the horse meat incident because of the cost of eliciting foodstuffs and their impact.

But the consumers are the real sufferers as they acquired foods which are not good in nature and beneficial for health while all the customers are affected from the fraud in food. Those people whose income resources is low will spend more money on that food items which is not beneficial for food consumption and this will cause that is more vulnerable to fraud. Some customers are also at under thereat if they depend on the other peoples for the preparation of food like in hospital foods and in the care home (Chown, 2010).

According to the recent survey which was taken by the native authorities in which West Yorkshire, Leicester City Council, North Yorkshire, West Sussex and the customer association group were included in which they posed that the consumers who intakes fast food which is taken from the inner city locations are habitually purchasing foodstuff which is not actually the food what it said to be but in various cases the confirmation proposes that difficulties ascended because of unintended tagging faults but it also take concerns that many fast food channels can have been obtaining inexpensive flesh which augmented the threat of foodstuff scam

In small streets small food business are susceptible in food fraud and so many have said that they are belligerent to stay in corporate as they are contending against those that fraud. The Criminal activities cost could be extensive and have a serious impact on a food businesses which are responsible. 70% contribution in UK food manufacturing in which mainly Small Medium Enterprises (SMEs) are include. The defense of authentic trades, and the formation of a situation that permits them to flourish, is a vital part of the Management’s strategy in order to create the UK further competitive. Both the manufacturing’s productivity and the Management’s development program and trade determination will be impaired if the system to efficiently confrontation foodstuff corruption are not ended (Treanor, 2013).

4.4       Enumerate the level of crime food

The total estimation about the corruption and organizations crimes related to food manufacturing and distribution spreading widely and the complete amount of the problematic situations in the UK is unidentified. By the experience getting form the other nations that there should be a methodical method to tackle the food corruption indication has rapidly been exposed. There are various evidences about the food corruption which is happening in UK and the assessment has been obtainable facts about intimidations made by offenders to supervise the scrutinizing food industries and by authentic industries wanted to strive with cheaters. Specific evidence related to food corruption has been accepted on to the related implementation organizations where suitable (The Insider, 2015).

4.5       Gathering Evidence of Food Corruption

In the case study phase more evidence about the crime of the food was sought. Food fraud is generally accepted as a deliberate action carried out for financial gain. Different types of food fraud include adulteration, counterfeiting, substitution and intentional mislabeling of goods. Food fraud has increased in importance as a result of our complex global food supply chain and costs the food industry an estimated $ 49 billion each year (, 2016). Therefore, the analysis is linked with the food industries by trade relations and also regional forces of police. Whilst it may appear from this response that foodstuff corruption is not extensive in the UK, it is more likely that this authorizes that proof that are gained from the food crime which is not presently pursued at the obligatory level or with the essential proficiency. The meat of horse crime event and other stated belongings of food corruption have established that convicts penetrate supply chains of authentic industries deprived of their familiarity. Some trade bodies have inside trade organizations that have their own private planning for gathering and allocation evidence on impending illegal movement, but these contrivances unaccompanied are not a defense in contradiction of planned offenders.  Total 18 forces of police contradicted to the request for evidence (Kenny, 2014).

Corruption in the health and food sector can be classified into four main types – bribes, theft, bureaucratic corruption and misinformation (EN: Regulating entrepreneurial behaviour in European health care systems, 2002). Each is motivated by potential gain from exploiting one’s position in the system- either direct financial gain through individual or institutional financial transactions or, more increasingly through an increase in power and influence. Several forces emphasized in a problematic circumstance with extracting facts on cases connecting foodstuff corruption as there is not presently a Home-based Workplace Corruption Code for food corruption significance it is not likely to examine corruption footage organizations for food deception. Foodstuff deception may be estimate UK organizations of food sectors, extensive volume of money and threats producing noteworthy reputational impairment. Decisively, some examples exposed foodstuff protection threats. Though, some factors like absence of intelligence created recognition, the balance of the problematic situations are unidentified (, 2005).

 4.6      A Systems Method to Deal with Food Crime

In the case study a systems structure methodology initiate in order to ensure the veracity and guarantee of foodstuff resource linkages and then informed the concluding endorsements. The method is proposed to deliver a means to permit execution which is prevailing in a national food corruption preclusion structure (Chonghaile, 2014).

4.7       A Systems Methodology to Tackle Crime Food

The appraisal took an organizations tactic to confirming the honesty and reassurance the food networking resource and this have well-versed in the ending approvals. The method is envisioned to deliver the resources to permit execution of a national foodstuff corruption deterrence agenda (Wójcik, 2000).

There are some basic pillars mainstays of a system in which:

  • Customers First
  • Zero Acceptances
  • Intellect Congregation
  • Testing Services in Laboratory
  • Audit
  • Government, Administration, Management Support

The research included these key pillars in which discussion of these points are discusses in order to avoid the crime rate in food industries

In a number of zones exertion is now happening but additional requirements to be prepared. This research contains more comprehensive evidence to reinforce the endorsements which is need to be updated and amalgamated to reproduce development and response (Alternet, n.d).

4.7.1    Policymaking Summary & Endorsements

In this research study it was encouraged by increasing anxieties about the organizations used to discourage, recognize and indict foodstuff corruption. The horse flesh disaster of 2013 was identified as were alarms about the accumulative probable for foodstuff deception and food corruption. Food deception converts in to foodstuff corruption when it no extensive includes haphazard deeds by rascals inside the foodstuff manufacturing industries but develops a systematized movement by collections which significantly set out to mislead or damage those acquiring foodstuff. These occurrences can have a huge deleterious influence both on customer self-assurance and on the character and investments of food industries (Alternet,n.d).

In June 2013, Evidence was taken from the extensive collection of interpretations commencement with a call for transcribed indication and tracked by conferences and appointments to a varied collection of foodstuff evidences.  In order to recognize and tackle the food crime, food frauds systems there are some systematic approach that plays a vital role in detecting of the food system corruptions in which adopts a zero tolerance approach to food crime, finances in intellect congregation and allocation, maintenances resistant laboratory amenities that use consistent, authenticated practices which progresses the competence and eminence of audits and further vigorously examines and confrontations foodstuff corruption, recognizes the strategic part of govt. has to play in subsidiary manufacturing and strengthens the requirement for robust management and operative disaster organization (Chonghaile, 2014) .

UK Customers have right to feasibly the good and reliable food and all those intricate in providing foodstuff and adaptable manufacturing ought to be acclaimed for whatever has remained accomplished but there is no place for gratification and there should be a emphasis on undertaking foodstuff offence to defend customers and the UK’s repute for foodstuff welfare and endorsing the welfares of truthful and meticulous foodstuff industries. The endorsements seek to improve the UK’s repute and progress operative obstructions in contradiction of impostors who function locally and internationally. Application would not lead to additional controlling encumbrances on manufacturing, predominantly on small enterprises and medium enterprises which create up the mainstream of UK foodstuff trades (Chonghaile, 2014) .

In this research study, inter-reliant authorizations form the foundation of a nationwide foodstuff corruption deterrence structure with indistinct characters and accountabilities for govt. and industry.

4.7.2    Customers First

Government should authorize that the requirements of customers in relative to foodstuff safety and prevention from the foodstuff corruption are the highest priority. The Administration ought exertion with productiveness and supervisors in order to Continue customer self-assurance in foodstuff, Stop adulteration, corruption and deceitful assertions about foodstuff and to make food corruption as hard as promising to obligate and to make customers conscious of foodstuff offense. Fraud in Food and its inferences, instantly contrivance and yearly beleaguered analysis database based on prospect perusing and intellect, data gathering as well as well-structured reviews (Chonghaile, 2014).

4.7.3    Zero Acceptances

Where foodstuff deception or food crime is alarmed, even insignificant corruption must be dejected and the reaction to major deceit purposely punishing.

4.7.4    Responsibility of Government

The Govt. should full fill particular responsibilities in order to discourage and identified the food crimes in food sector which are as follows:

  • Embolden the industries of food to inquire examining queries about whether assured agreements are too moral to be factual.
  • Effort with food stuff manufacturing industries to confirm that prospects for foodstuff deception, foodstuff corruption and vigorous alleviation are encompassed in corporation threat inventories
  • Urge food manufacturing industries to adopt induce contrivances that reward responsible attaining practice
  • Embolden business to comport sampling for analysis and observation of foodstuff deliveries at all phases of the foodstuff resource sequence
  • Deliver assistance on private region attaining agreements concerning authentication and reassurance of foodstuff source restraints.
  • Encourage the delivery of tutelage and information for controllers and manufacturing on the deterrence and documentation of foodstuff corruption.

4.7.5    Intellect Congregation

Here requirements to be a communal emphasis by Administration and trade industries on intellect collecting and distribution. The Administration ought to be exertion with the Foodstuff Values Assistance and supervisors to gather, analyses and allocate evidence and astuteness and to effort with the manufacturing industries to help it found its possess safe harbor to assemble analyses and broadcast material and astuteness (, n.d).

4.7.6    Testing Services in Laboratory

Those individuals, who involved in the process of auditing, assessment and execution, must have admission to resistant, justifiable services of laboratory that use consistent, authenticated methods. The responsibility of government is to assist work to normalize the methods used through the laboratory public testing samples for authenticity of food.

Exertion with attentive gatherings to grow midpoints of Excellence making a structure for standardizing legitimacy testing phases and to simplify the growth of assistance on reconnaissance programs to notify sampling of national programs.

Adoptive corporation employed through those community segment administrations now responsibility foodstuff observation and analysis containing consistent appraisal and justification of foodstuff observation Effort in organization with Community Health England and local establishments with their own testing laboratories to reflect suitable selections for an assimilated communal methodical examination around foodstuff values certify this development is business to applicable community inspection (, n.d).

4.7.7    Government, Administration and Management Support

For the reliability and reassurance of foodstuff resource systems Administration maintenance must be reserved unambiguous, quantifiable, achievable, truthful and opportune. The methodology of Foodstuff Morals Organization’s planned and co-ordinated method to foodstuff commandment implementation distribution should be obliged for the reduction of food crime. The need of assistance and preparation of local specialist administration officers will also necessary in system in order to tackle the food crime.

4.8       Audit

The Audit food Industry and devices can contribute in weighting to audit and declaration commands so as to permit recognition wherever it is unpaid but similarly effort to minimalize replication wherever conceivable. Audits are basically assessments of foodstuff provisions by manufacturers, storing amenities, mainframes and traders are assumed both consistently and haphazardly. The FSA consumes that lead in situation out morals for the foodstuff manufacturing industries to follow to in obeying with the guidelines. The research study has noted the growth in private auditing commands to content predetermined responsibilities and claim due to assiduousness certification. The consideration has detected that the superiority and extensiveness of these private audits which are adaptable and certain requirements seem useless or unreasonable. The emerging amount of reviews appointed by traders is not attaining the envisioned determination. The evaluating association consumes in some cases become an industrialized in itself since it involves food trades to pay for their audit. As a result, there is a hazard that an audit command can be used for rising expenses, placing excessive charges on foodstuff industries, mainly small and medium enterprises (, n.d).

Provision the Foodstuff Morals Action to progress a model for co-ordination of high profile investigations and implementation and facilitation preparations to deal efficiently with foodstuff offense.

Ensure that investigation into validity analysis, related strategy and policy expansion and functioning actions linking to food corruption develops more consistent and these responsibilities are clearly recognized, interconnected and widely assumed by all investors.

4.9       Unannounced Audits

The behavior and possibility of audit and scrutiny might fluctuate according to native conditions, but reliance on identical disclaimers and standards will decrease movement expressively. Unnecessary and frequently duplicative third party and vender asserted audits place a gratuitously high affliction on foodstuff trades companies mainly those providing seller exclusive produces. There is untrustworthy indication of providers being checked on an almost every day which is subsequent in significant commercial source existence knotted up in organizing for and enabling each scrutiny. Food manufacturing industries appraisal commands ought to be rebalanced from proclaimed to unexpected audits. Corporations that attain a constantly high level of acquiescence should earn acknowledgment for their worthy record, permitting the business appraisal resource to emphasis on those industries that signify greater threat. Foodstuff industries ought to be operational properties on an appraisal ready foundation. Unexpected audits will assist to retain annual record of the food organizations round high values whilst sinking the load of source devoted to making for declared audits. By agreeing arduous principles for unexpected audits, which offer superior allowance to discovery of foodstuff offense, the amount of reviews could be meaningfully reorganized as traders would be more motivated to receive third party approval (Neville,2014).

4.10    FSA Responsibilities

All parties needs a maintainable method to native instruction that can distribute actual assistances for companies but it is also significant to confirm customers are endangered. Local establishments want the choice, elasticity and tackles to transport their own purposes, but when it originates to foodstuff source systems they want to deliberate evidence about national significances, jeopardies and industry antiquity of their region. Infrequently, broader co-ordination of exertion is required and local establishments requirement to survey the lead of additional assistance. The FSA will take this role. FSA was documented its main determination was to defend customers. It was tasked with location strategy connecting to public well-being, foodstuff security and other welfares of customers in relation to foodstuff and was official to attain, accumulate, retain underneath appraisal and broadcast evidence about matters associated to these matters (, n.d).



4.11    Predicament Organization

An organized system is need be follow to deal efficiently with any severe food protection and food corruption occurrence. The Administration should confirm that all instances are observed as a threat to public wellbeing till there is indication to the conflicting

It’s the responsibility of Food Standards Agency to deliberate with the Cabinet Office in their character as organizing frame for Cabinet Office Briefing Room for the arrangement and association of reactions to occurrences (, n.d).

4.12    Evolving and Foremost Indigenous Elucidations to Food Offense

A number of the endorsements in the research analysis that relate to movements at a general level to guarantee the reliability of foodstuff source systems but numerous are focused at clusters and entities functioning in the benefits of the publics they help. Undertaking foodstuff corruption also necessitates management at a native level to guarantee customers have admittance to safe and trustworthy food. Deal with the complications at a local level will develop a strategic part of transporting a effective food corruption deterrence approach, with investors employed in company to progress synchronized, defensive approaches and preventions to help defend customers. The study betrothed with the Birmingham City on the aforementioned initiative to progress nearby based preparations based on the organizations method and co-hosted a workspace in city of Birmingham with The Novel Realists, a not for revenue undertaking founded in Birmingham(, n.d).

4.13    Justifying Audits

The food manufacturing industries nowadays has a propagation of consumer, vendor and third party inspections as well as distinctly lead assessments by native establishments in which the requirements of some basic food safety are evaluated. This leads to replication of assessments which enhances considerable charges to production deprived of any ostensible advantage. In addition, representatives of the food business are anxious that merchants, traders and particular foodstuff service corporations are necessitating their traders to carrying out assessments, appraisals of subordinate food contractors.

This means that numerous main contractors might be auditing the same secondary suppliers thus creating a second tier of duplicate audits. There is food manufacturing industries support to progress and magnify the standard appraisals established by governments like Standards of BRC Global, mainly in relation to manufacturers of individual trademark brand of foods. Though, this can occasionally upsurge the paper liability. In certain circumstances, the paper liability may have augmented unintentionally as a consequence of the desire to conduct legislatures physically into industrial unit. Subsequent commitment with foodstuff companies, morals proprietors and those intricate in undertaking audits, the analysis determined that the finest method forward will be for the manufacturing to change towards a linked organization of appraising.

This would involve:

An essential foodstuff protection and veracity audit acknowledged by the Global Food Safety Initiative (GFSI) and approved by foremost traders and standards proprietors. Distinct dealer components planned according to their corporate priorities. It would become a necessity of contractors inadequate to do corporate with a particular trader to be appraised in contradiction of its own component. This would permit traders to validate due conscientiousness whilst reducing replication, these audits will be taken at the same time as the central segment (BBC News, 2014).

Endorsement organizations ought to be deal with inspections merging the essential foodstuff security and veracity audit beside with superfluous components. If such accepted morals can be put in residence then the existence of assessments to foodstuff companies which show finest practice might be reduced and thus so influence their charges.

In addition, the approach of modular would help to facilitate produced acknowledgment for foodstuff industries which is being established by the FSA as it would be capable to emphasis on the essential component to confirm that it meets legislative necessities. Once an audit arrangement has made acknowledgment from the FSA, the foodstuff trades business to it gain from consuming less native consultant assessments tradable them phase and money. This, joint with the welfares of the Primary Authority scheme which is now protracted to trade forms, which count a momentous amount of SMEs amongst their association could make a actual influence in vindicating the general scrutiny and audit landscape. The suggested changes would require collaboration and co-operation among organization containers, postulates, food industries and controllers on an international foundation to attain such coordination. The review affianced with the primary administrators of the main merchants and other illustrative administrations setting out suggestions for a new method to audits (Bawden, 2014).

The review established mostly the optimistic reaction to this methodology though some said that that their existing preparations were satisfactory. Modification will not be informal to accomplish but BRC has showed a real assurance to continue this exertion onward and must work with the FSA to progress this approach. All those with a concern in audits need to work through them to accomplish the transformation initiative approachable guidelines. In particular, the provision of GFSI, as the frame that supports arrangements by benchmarking values against its individual guidance manuscript, will be important. Once the novel provisions are in residence and existence used by zones of the food manufacturing industry, marketplace militaries will come into production and more corporations will see the commercial profits. Existing foodstuff welfare assessments are neither planned to promise the validity of foodstuff products nor to recognize dishonest practices. Dispersed third party components for foodstuff deception anticipation and recognition would be produced. It will be for different foodstuff companies to choose if they request to enquiry in these in order to satisfy consumer desires; however vendors should deliberate making authorized a condition of contract. Encouraging progress has been made towards this objective by standards owners, and those bodies should collaborate in order to approve values for foodstuff deception deterrence and recognition. Such principles should integrate persuasions like the accountancy of forensic and frame stability payments to assure their consistency. Non-compliances and uncertainties of offense must be communal to produce intelligence (Bawden, 2014).



Chapter Five: Conclusion

In the end, this study has analysed why consideration has to be conferred to the question that is forensic auditing is the effective tool to minimize the fraud and corruption in UK food sector. It has studied that the tactic of Forensic Accounting or practice is necessary for acquiring, reduction of fraud and the way of handling to be recognized with the aim of managing the occurrence of deception in the sector. It must be point out that whether within the world of business or in the public area; the vital concern for inhibiting and avoiding deception and unethical habits balances with management.

In particular, the research disclosed that the role of Forensic Auditing do considerably decreases the incidence of deception instances in the food sector, as it similarly exhibited that there is an important difference among  qualified Forensic Accountants and Traditional External Accountants with respect to abilities and methods useful in the finding and inhibition of fraud.


The gap can be filled up by introducing and modify forensic auditing as business approach to control commercial and economic misconduct:

  • Forensic Auditing will specify legal action support facility with the suitable delivery of proficient facilities in the court of law.
  • Forensic Auditing will establish good business control in the food sectors which will instate the public faith on the government and the whole system.
  • The classical auditing has the curb in identifying false attempts that the forensic auditors will efficiently meet. They devise the specialized competence support by law to stop into the organization technique and investigate the records, make findings and exhibit the documented indications in the courts of law.
  • Exposure and inhibition of distortion have presented to the work of forensic auditing. Because of this fact, mainly companies have to do with respect to deception is to stop the corruption from being designated.
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