homework
Assignment 3: Freescale Semiconductors, Inc.
Desislava Tabakova
Advanced Auditing
Additional laws and harsher penalties can eliminate crimes if the criminal feels that there is a direct relationship between punishment and crime. According to the deterrence theory of crime if there is certainty of punishment, additional laws and harsher penalties will reduce financial fraud or even mitigate it. Additional laws can make punishments more severe and harsher penalties can increase the intensity of punishments. These can be effective only if the enforcement of these laws is efficient and those who perpetrate financial fraud feel that they cannot escape detection if they commit a financial fraud.
First, harsh laws and penalties are sometimes long and carry many fines, which makes the offender avoid such cases. For instance, if someone is a businessperson and engages in a financial fraud the time he or she spends behind bars will be long and therefore would have wasted more time than he would have done making clean transaction. Secondly, harsh laws against an offence like felony in a court of law would taint a person’s reputation in the business sector and therefore reduces their chances in any business deals.
This would make an offender not want to engage in such acts again having in mind what such acts would be to his business or the entire organization. Lastly engaging in fraud would lead to a termination of employment and contract and therefore would be a limit to employees or executives who would want to engage in financial fraud.
The insider trading debate traditionally discusses the pros and cons of insider trading and draws a conclusion about the desirability or undesirability of public regulation of insider trading. One of the most important arguments against insider trading is that it generates agency problems that shareholders cannot resolve and that, therefore, insider trading should be publicly regulated. We have challenged this argument for failing
Desislava Tabakova
Advanced Auditing
Additional laws and harsher penalties can eliminate crimes if the criminal feels that there is a direct relationship between punishment and crime. According to the deterrence theory of crime if there is certainty of punishment, additional laws and harsher penalties will reduce financial fraud or even mitigate it. Additional laws can make punishments more severe and harsher penalties can increase the intensity of punishments. These can be effective only if the enforcement of these laws is efficient and those who perpetrate financial fraud feel that they cannot escape detection if they commit a financial fraud.
First, harsh laws and penalties are sometimes long and carry many fines, which makes the offender avoid such cases. For instance, if someone is a businessperson and engages in a financial fraud the time he or she spends behind bars will be long and therefore would have wasted more time than he would have done making clean transaction. Secondly, harsh laws against an offence like felony in a court of law would taint a person’s reputation in the business sector and therefore reduces their chances in any business deals.
This would make an offender not want to engage in such acts again having in mind what such acts would be to his business or the entire organization. Lastly engaging in fraud would lead to a termination of employment and contract and therefore would be a limit to employees or executives who would want to engage in financial fraud.
The insider trading debate traditionally discusses the pros and cons of insider trading and draws a conclusion about the desirability or undesirability of public regulation of insider trading. One of the most important arguments against insider trading is that it generates agency problems that shareholders cannot resolve and that, therefore, insider trading should be publicly regulated. We have challenged this argument for failing
References: Issues in Criminology and Criminal Justice Research: 2013 Edition Q. Ashton Acton, PhD, ScholarlyEditions, 201 Criminology, Tim Newburn, E2, Routledge, 2013 (3)http://www.aicpa.org/Research/Standards/Pages/default.aspx Golden, T. W., Skalak, S. L., Clayton, M. M., & Ebooks Corporation. (2006). A guide to forensic accounting investigation.Hoboken, N.J: J. Wiley. Langevoort, D. C. (1991). Insider trading: Regulation, enforcement, and prevention. Deerfield, IL: Clark Boardman Callaghan. Manne, H. G. (1966). Insider trading and the stock market. New York: Free Press.