Institutional Connivance, Ethical Failures, Liminality and Fraud

The study aims to examine the relationship between institutional connivance, neglect of ethical standards by professionals, liminality in international regulation, and tax fraud. A proprietary company, operating under the guise of a corporate veil, committed Australia's largest tax fraud. It was found that besides the factors identified by the fraud triangle theory (FTT), the new factors identified above also played a role. Banks and professionals focused on economic benefits rather than complying with the law and ethical standards. Liminality in the international regulatory framework helped the fraudsters. Without vigilant tax officials, the offenders could have escaped. The study suggests expanding present fraud theories, ensuring stricter compliance from reporting entities, and having auditors report to the regulator external fraud enablers, if present.