Definition of embezzlement
Embezzlement is the act of stealing or misappropriating funds or resources that have been put in one’s trust or from an employer. It is one of the offenses that has led to the collapse of many businesses. The dishonest employees take the money that was meant for the company then channel it to their personal accounts so that they can use it for other purposes that are not related to the company or are not beneficial to the company in which individual works (Attanasi, Rimbaud & Villeval, 2019). According to Fan, Lin & Treisman (2010), embezzlement involves stealing from the state or misspending the funds that have been put in someone’s care.
How an individual can embezzle from a company
There are several ways in which someone can embezzle from a company. However, this paper focuses on the main ones that occur in the companies on a day to day basis. One of the most common ways of embezzling funds from a company is through the forgery of cheques. It happens when an employee writes a cheque for the company but transfers the amount to his or her personal account, making the company be at a loss. The other most common of embezzling money from a company is the case where the employees cash the cheques given by the clients than keeping the money in their personal account leading to the company operating at a loss. The same type of fraud is also taking place in the companies that have upgraded to the electronic payment systems. In such a case, the employee may open another account that bears the same name as that of the company then divert the funds that are meant for the company. Some of the employees also steal from the company by overbilling the clients. After overbilling the customers, they keep the money and balance the records with fake entries in an attempt to conceal evidence of the theft that has occurred. Sometimes the employee may bill the clients double the amount that they are meant to pay. Some of the employees use the company’s credit card for personal use. The company, therefore, faces some losses and may collapse under extreme circumstances and when efforts have not been put in place to deal with the situation (Binde, 2016).
Factors that contribute to someone committing embezzlement
Several factors contribute to someone committing embezzlement. The opportunity to embezzle the funds of a given company is one of the major motivations for the employees to take part in the process of embezzlement. The opportunities to steal money from a company may present themselves to the employees in the organization. In such a case, an individual that lacks a strong moral standing will bow to pressure and steal from the company. It is, therefore, essential for firms to employ honest people as a way of preventing the theft of money and other resources. Apart from getting the opportunity to steal from the company, some employees are under pressure to embezzle funds. Some employees get the opportunities to steal from the companies that they work for, but they don’t. Some of the factors that may pressure an individual to steal from a company include the inability to afford basic needs, peer pressure, and drug abuse. Companies need to cultivate honesty in the workplace and take good care of the employees’ welfare in the company. The other factor that may lead to embezzlement in a given company is rationalization. An employee may have the opportunity to steal but doesn’t do it. However, when he or she rationalizes the behavior, he or she may end up stealing from the company. A person with good character cannot rationalize stealing, and those are the kind of people that a company should employ (Attanasi, Rimbaud & Villeval, 2019).
References
Attanasi, G., Rimbaud, C., & Villeval, M. C. (2019). Embezzlement and guilt aversion. Journal of Economic Behavior & Organization, 167, 409-429.
Binde, P. (2016). Gambling-related embezzlement in the workplace: A qualitative study. International Gambling Studies, 16(3), 391-407.
Fan, C. S., Lin, C., & Treisman, D. (2010). Embezzlement versus bribery (No. w16542). National Bureau of Economic Research.