Difficulties in measuring white collar crimes

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White collar crime is commonly referred to as financially motivated nonviolent crime that is committed by government or business professionals. The most common form of white collar crime includes fraud, bribery, identity theft, money laundering, forgery and insider trading (Mayne, 2010). The white collar crime mainly benefits the individual or individuals financially. The methods used to deter the white crimes have been questioned in terms of their effectiveness. It is estimated that about 10% of the total revenue of an organization is usually lost to the white collar crimes. In the United States of America, the sentences for white collar crimes include imprisonment, fines, community service, restitution, probation and disgorgement (Thio, Jim, Taylor & Martin, 2013). In countries such as China, the white collar crimes attract death penalty. As compared to the conventional crimes, it is difficult to measure the amount and cost of white collar crimes. This means that the actual amount lost to white collar crime cannot be accurately determined. The paper discusses the difficulties involved in measuring the white collar crimes as compared to the conventional crimes.


A fundamental problem exists in the definition of the white collar crime which contributes to the challenges in measuring the cost and amount involved. Most of the definitions usually confuse the acts with the actors or the norms with the norm breakers (Crawford, 2013). The modus operandi is also confused with the operators in some of the incidences. As a result of the confusions, difficulties are usually encountered in measuring the amount lost and whether is as a result of the white collar crimes. The difficulties are usually encountered worldwide despite the fact that no organization is immune to white collar crime. Most of the organizations have put in place internal controls to ensure that the white collar crimes is prevented and measured in case they occur. This includes audits, fraud reporting hotlines, training and antifraud policies.  However, the use of technology has made it possible for the organization to detect and measure the amount and costs involved.  The exploitation of technology by the dishonest people is one of the main challenges that impacts negatively on the ability to measure the amount involved in the white collar crimes (Feng, Wang & Li, 2014). The manipulation of figures through the use of technology makes it difficult for the organizations to obtain accurate figures regarding the actual amount lost. This is a major challenge as compared to the conventional crimes where the exact amount can be measured. In most cases, the conventional crimes usually involve hard cash or property that has a specific value and hence creating the challenge.

Some of the losses associated with the white collar crimes are mainly indirect making it difficult for the measurement to be carried out. This includes the loss of productivity, reputational damage as well as related future loss of business (Gill, 2016). As a result of such challenges, the costs and amount cannot be measured. The fraud investigations are usually too expensive for most of the organizations. This has seen most of the companies opting not carry out the investigation and hence creating a difficulty in terms of measuring the costs. Other companies opt to dismiss the employees involved in white collar crimes without ensuring that they are fully prosecuted. The challenges involved in the investigations and prosecutions therefore make it difficult to establish the actual amount as well as the costs (Gill, 2016). The internal control measures put in place by most of the organizations is usually costly and it also takes too long to obtain the actual fraud information. This has therefore contributed to the complications involved in the measurement of white collar fraud. The methods available to collect the data required to measure the costs and amount associated with the white collar crimes are not accurate. The methods are also faced with a lot of limitations in terms of bias (Zhao, Xue & Whinston, 2013). Some of the researchers use the information regarding the arrests made and others rely on the cases of successful prosecutions. The levels of accuracy when using the methods are low and hence impacting negatively on the measurement of costs.

The current criminal law and justice system is too narrow to capture the behaviors of interest in terms of the white collar crimes. This further complicates the process of measuring the costs involved as the accuracy of the data is cannot be guaranteed.  A high number of white collar crimes usually go undetected and unreported and hence making it difficult to rely on the information from the judicial system. The source of data related to the white collar crime is limited in scope as it cannot be collected in a systematic manner and hence creating a challenge in terms of measurement. Unique problems discourage operationalization and generalization leading to difficulties in making the measurements (Mayne, 2010). The official data which is commonly used in the measurement process is considered as information from the far end of justice. This has negative implications in terms of accuracy and hence contributing to the challenge. The residual costs associated with the white collar crimes are much difficult to measure due to the nature of data required. The residual costs associated with the white collar crimes include loss of investor confidence, corporate financial manipulation and insider trading.  The cost implications of such crimes may be difficult to quantify and determine the costs. The generalization method that can be reliable when measuring the white collar crime may include self reporting. This involves asking the individuals if they have been victims of white collar crimes. The information obtained can then be compared with official record (Thio, Jim, Taylor & Martin, 2013). The method is however still prone to errors and low levels of accuracy.


In conclusion, it is evident that the measurement of costs related to the white collar crimes is a difficult process. The definition of the white collar crimes makes it difficult to measure all the aspects of white collar crime. Technological advancements has made it impossible for some of the white collar crimes to be detected and hence impacting negatively on the measurement process. It is evident that the measurement of the white collar crimes in most cases is dependent on the official prosecution records which are not accurate. Self reporting method can be vital in the process although it is also subject to some weaknesses. The measurement of costs associated with the conventional crimes is much easier to measure as compared to the white collar crimes.

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  1. Thio, A. D., Jim, D. Taylor, & Martin D. (2013). Schwartz. Deviant Behaviour. NY: Pearson Higher Education.
  2. Mayne, J. (2010). Keynote Speaker on the Consequences of White Collar   Crime, Fraud and Ethics. Lecture notes.
  3. Crawford, A. (2013). Crime and insecurity. London: Routledge.
  4. Feng, N., Wang, H. J., & Li, M. (2014). A security risk analysis model for information systems: Causal relationships of risk factors and vulnerability propagation analysis. Information sciences, 256, 57-73.
  5. Gill, M. (2016). Crime at Work Vol 1: Studies in Security and Crime Prevention. Springer.
  6. Zhao, X., Xue, L., & Whinston, A. B. (2013). Managing interdependent information security risks: Cyberinsurance, managed security services, and risk pooling arrangements. Journal of Management Information Systems, 30(1), 123-152.
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