UNDEVELOPED CORPORATE ENVIRONMENT AS A SUITABLE SETTING FOR THE DEVELOPMENT OF CORPORATE CRIME.

Corporate governance as a relatively new creation appeared because of the need of multinational companies to govern in the best possible way, which would consequently improve the overall functioning of the companies and eventually result in achieving the governance objectives and increased profit as one of the main interests of capital owners. In the countries of the region which are in a process of transition, the concept of corporate governance is prescribed by law, as part of the external requirements, primarily by the European Union. Since we are talking about countries which abandoned the socialist economy of the past or countries that were relatively economically backward, the introduction of the corporate governance concept should contribute to a better organisation of the companies and more advanced business which would help achieve a better performance and higher profitability. This paper deals with the question whether the concept of corporate governance has been sufficiently accepted and applied in these economies. Furthermore, this paper discusses the issue whether corporate governance and internal control influence the appearance of corporate crime. At the end of this paper it has been established that internal control starts with corporate governance and as a result, effective fraud prevention techniques are founded on strong internal control. [ABSTRACT FROM AUTHOR]