Regulatory Theory and Protection of the Principal: White Collar Crime Fraud in Occupational Licensing for Property Agents

Publisher:
Pacific Rim Real Estate Society (PRRES)
Publication Type:
Conference Proceeding
Citation:
Proceedings from the PRRES Conference, 2011, pp. 1 - 17
Issue Date:
2011-01
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Documented increases in trust accounting fraud indicate that there is a clear need to enhance consumer protection in the property industry. During the last 100 years, regulatory policy has been developed to exemplify the standards for social responsibility and ethical behaviour between property agents and their principal. Regulatory theory argues over the necessity for regulation. The Positive theories of regulation examine the reason and need for regulation, whilst the Normative theories of regulation will generally include transparency, predictability and credibility for the regulatory system. With regards to property agents and their principal, the government is also interested in overcoming information asymmetries. The research methodology in this paper utilises regulatory theory concepts to research and identify the problematic areas relating to trust accounting fraud. The suggestion of a correlation between occupational licensing requirements and an increase in the number of licenses issued, and also changes within the educational requirements for occupational licenses was considered using data from New South Wales property agency licensing. The research findings indicated some correlation with the increase of new licence and certificate applications, and trust accounting fraud. However, because of limiting data available ongoing research into this problematic area is required before rendering definite conclusions.
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