Company offenders, can we control them? : a look at the Commercial Affairs Division : a thesis presented in partial fulfilment of the requirements for the degree of Master of Business Studies in Accounting and Finance at Massey University
In July 1984, the Securities Commission published their Report which reviewed the effectiveness of the resources that were available for corporate fraud investigations. The Government's response to the public's concern regarding corporate crime was to allocate additional resources to the Commercial Affairs Division of the Department of Justice, and confirm that the investigation, detection and prosecution of criminal offences by companies should continue to be "the shared responsibility" of the Police, and the Commercial Affairs Division. The injection of the additional resources to combat corporate crime is in danger of being viewed as a "political sop" by the public, if these resources are not effectively deployed. This study attempts to address this question by reviewing the structure and operational capability of the Commercial Affairs Division, with particular regard to its effectiveness to provide measures to monitor and regulate company offenders. A secondary aim was to ascertain what the concept of shared responsibility means to the investigative officers, and how it operates in practice. It was also envisaged that the study could establish a base for further research by providing the mechanism for a "before" and "after" comparison. A detailed descriptive analysis of the role, function, structure and legal authority of the Commercial Affairs Division was undertaken. Two questionnaires were developed. The first was directed at the investigative officers to provide information on the operational capability of the Division to combat corporate crime. The second questionnaire was directed at the controlling officer of each of the district offices to ascertain the effectiveness of the Division in terms of the number of complaints, follow-up investigations, and prosecutions. The concept of shared responsibility was dealt with by a three-pronged approach. The originators of the term were interviewed to establish what they meant by this concept and how it "should" operate. The official head of the Commercial Affairs Division was then interviewed in respect of how the concept was "thought" to operate, and finally the investigative officers themselves were surveyed as part of the questionnaire, to find out how it "did" operate. The results of the questionnaire survey revealed that the operating capability of the. investigative officers was seriously inhibited by internal problems such as lack of staff, lack of training, and a lack of resources generally. As a result of the magnitude of these inhibiting factors it was difficult to establish a clear cut finding beyond this. As you would expect, the above problems also seriously undermined the effectiveness of the Division in terms of completed investigations and prosecutions. The study found that the perceptions held by the originator's and the official head, on how the concept of shared responsibility should operate bears very little resemblance to reality. It was concluded that at the present time the Commercial Affairs Division has serious internal problems that were hindering the effective monitoring and regulating of company offenders.