Exploring the perception on occupational fraud within sport organizations in Finland

Abstract

The impact of fraud is growing, setting organizations continuously at risk. The impact of occupational fraud, which is defined as fraud committed with the involvement of employees of an organization, can seriously harm an organization, seen especially in smaller organizations, such as sport clubs or NGOs. The objective of the research was to found out what the current state of internal controls preventing occupational fraud within sport organizations in Finland was, and to identify the current level of awareness of occupation fraud within the sport industry. A literature review was conducted to support the background of the qualitative research. The research has been conducted through content analysis, which has been based on four in-depth interviews. These indepth interviews were held with three informants representing a major Finnish sport federations and one informants represented a professional ice hockey club in Finland. The topics discussed included the organization demographics, currently awareness and set-up of internal controls, risk management and the fraud exposure of these club organizations. The various informants recognize the risks their organization is currently be exposed to. Lack of resources, from both monetary and employee resources point of view, resulted in organizations not able to set-up internal control frameworks to prevent occupational fraud in full. In addition, the informants stated that risk management activities have been mainly focused on direct financial risks. The findings of the research indicates that organizations recognize the occupational fraud risk and are aware of existing tools, such as internal controls frameworks, they could implement to eliminate or mitigate risks of fraud. A challenge, however, which all informants raised was lack of resources to combat occupational fraud. Through increased cooperation, and sharing of best practises between sport organizations, it is possible that in the future the internal control framework and risk management activities within the sport industry can be improved, which might result in a lower exposure to occupational fraud.