Article

Looking through the fraud triangle: A review and call for new directions

December 2015

Authors:

The University of Sydney

Purpose - This article aims to review popular frameworks used to examine fraud and earmarks three areas where there is considerable scope for academic research to guide and inform important debates within organisations and regulatory bodies. Design/methodology/approach - The article reviews published fraud research in the fields of auditing and forensic accounting, focusing on the development of the dominant framework in accounting and fraud examination, the fraud triangle. From this review, specific avenues for future research are identified. Findings - Three under-researched issues are identified: rationalisation of fraudulent behaviours by offenders; the nature of collusion in fraud; and regulatory attempts to promote whistle-blowing. These topics highlight the perspective of those directly involved in fraud and draw together issues that have interested researchersin other disciplines for decades with matters that are atthe heart of contemporary financial management across the globe. Originality/value - In spite of the profound economic and reputational impact of fraud, the research in accounting remains fragmented and emergent. This review identifies avenues offering scope to bridge the divide between academia and practice.

Financial Crime Tradecraft: A Critical Study of the Mechanics of Financial Crime

Thesis

Dec 2021

Douglas M C Allan

This thesis contributes to understanding of the tradecraft of fraudsters who commit complex financial crimes. It takes up the challenge laid down by Levi (1984) and Braithwaite (1985) to give greater attention to how fraudsters commit their crimes. It provides insight into the diversity of tradecraft regularly applied by fraudsters in pursuit of their objectives. The underlying hypothesis of this thesis is that a fraudster's status as either an insider or an outsider of a target financial system influences how they deploy their tradecraft. This thesis proposes the presence of three interlinked activity domains common to all complex financial crimes. It found the access, learning and planning domains, when combined, produce a process model that enables the testing of the hypothesis driving this research. The data, primarily transcripts of interviews with detectives and criminal case management files, are divided into insider and outsider cases. These cases are thematically analysed to identify key similarities and differences in the methods, resources and tradecraft used by fraudsters. This process identifies key stages in the commission of financial crime including accessing the financial target; learning about the target's strengths and weaknesses; planning to overcome financial crime controls; and fraud implementation. The thesis proposed and tested the ALPi Model and identified variations between insider and outsider's deployment of tradecraft. Outsiders demonstrate greater levels of task intensity linked to access, learning and planning earlier in their fraud event timeline. Insiders demonstrate similar intensity, but later in their fraud event timeline; this suggests insiders and outsiders have different offending trajectories. Consequently, this finding led to a revision of the Time-allocation Model of Criminal Planning to reflect the post-crime activities of insider fraudsters (Allen, 2011). The thesis found outsiders deploy a greater variety of tradecraft than insiders who benefit from knowledge and access derived from occupational positions. Tradecraft aligned to access, learning and planning is classified and includes secondary systems and organisational interface point access; learning through subversion and stigmergic processes; and the deployment of planned backstopping and operational security strategies. The thesis defined three distinct learning periods common to all fraud event timelines. Pre-crime learning was generic, often linked to what was referred to as base line knowledge and access. Pre-crime and crime phase learning was targeted and deliberate, focussing on satisfying specific information deficiencies. Post-crime learning was reactive, disjointed, and focussed on the nature of actual or perceived threats. The thesis also identified the need to reframe routine activity theory's 'absence of capable guardianship' to a position that recognises a criminal's 'capability to overcome guardianship'. This acknowledges the role of individual agency in circumventing fraud controls by bringing the deployment of financial crime tradecraft into the fraud control narrative. Finally, the thesis contended that until the complexity that is evident within the data is more fully understood, meaningful fraud prevention efforts remain bereft of their most important asset; that is, a detailed understanding of how fraudsters set about overcoming the controls that organisations seek to implement.

A Critical Review of Fraud Discourse -a Case Study of Pakistan

Article

Full-text available

Oct 2021

Attique Ur Rahman

FACTORS AFFECTING ONLINE CHEATING BY ACCOUNTING STUDENTS: THE RELEVANCE OF SOCIAL FACTORS AND THE FRAUD TRIANGLE MODEL FACTORS

Article

Full-text available

Oct 2021

Due to the COVID-19 pandemic outbreak, university students across the authors' universities have demonstrated similar performance results in conjunction with adopting the online learning systems. Occasionally, students snitch on their classmates' cheating behavior. It has been brought to our attention that students are acting in groups and in a very organized way to commit cheating using social media applications and other media. This research intends to understand the motivations underlying the behavioral intention to cheat while university exams are held online. In pursuing its aims, this study uses an integrated theoretical framework that includes the social capital theory and the fraud triangle theory. Through the use of a previously tested questionnaire, this study gathers data concerning the students cheating behavior from 213 respondents across a group of Jordanian universities. The findings of this study show that pressures, opportunities, rationalization, social norms, and social trust are all factors that affect the behavioral intention to cheat, which ultimately lead accounting students' to commit cheating while taking exams online. This research provides several practical contributions to the educators who are seeking to minimize the chances for dishonest students to cheat in online exams.

Does Moral Intensity Affect the Whistleblowing Intentions?

Article

Full-text available

Dec 2020

The present study investigates the nexus between whistle-blowing triangle having components like Pressure/Financial Incentives, Opportunity, rationalization, and whistle-blowing intentions by focusing the moral intensity playing a moderating role in the Pakistani context to enhance the body of information on this subject by giving observational demonstrate. The sample in this research is taken from the Karachi Stock Exchange of Pakistan registered audit firms. PLS-PM method based analysis results found a significant relationship between whistle-blowing triangle components, whistle-blowing intentions, and moral intensity. We found that the most significant predictor of the auditor’s intentions to report the wrongdoing in Pakistan is an opportunity. Pressure/Financial Incentives and rationalization, the other components of the whistle-blowing triangle, also play a vital role in assisting the auditor’s whistle-blowing intentions. These investigation findings proposed that an opportunity is the priority factor for enhancing the auditor’s whistle-blowing intentions in Pakistan. Our results also concluded that the moral intensity significantly and positively moderates this relation among the whistle-blowing triangle and intentions to report the wrongdoing. This study also provides insights to the society in better understanding the whistle-blowing concept, an issue neglected by society.

Looking beyond the fraud triangle: a case study of corruption in Pakistan’s public sector

Thesis

Jul 2020

Attique Ur Rahman

Corruption is a form of fraud. Fraud is deception intended to achieve monetary or personal gains. The threat of fraud is increasing exponentially with an estimated loss of GBP 3.2 trillion in the previous year alone. Similarly, public sector corruption has been one of the major issues in Pakistan. The previous premier of Pakistan was ousted on charges of corruption and the incumbent premier’s primary manifesto was eradication of corruption. Therefore, this study preferred to take a very topical and an issue of national and global worth. To control fraud a significant thrust of the fraud-related research has been the development of frameworks to prevent fraud. The dominant discourse in this regard is the so-called “fraud triangle” that got entrenched in the professional auditing standards across globe. Contrary to the dominant notion of the fraud triangle, there is a limited study to understand and deter fraud. This study also takes the less trodden path but also takes the fraud triangle (opportunity, pressure and rationalization) as a unit of analysis to explore its validity in the context of corruption in Pakistan’s public sector. By opting interpretivism paradigm, the research prefers case study method over the others due to reasons detailed in methodology section. The study collects primary data from researcher’s observation and interviews of civil servants of Pakistan, and secondary data from case studies of corruption highlighted by media and investigated by Pakistan’s prime accountability agency, National Accountability Bureau (NAB). The data triangulation reveals that corruption in Pakistan’s public sector is motivated by opportunity only while pressure and rationalization elements of the fraud triangle get irrelevant overtime. Moreover, the study unfolds that the corruption was committed through collusion, and collusion is beyond the scope of the fraud triangle which is a unidirectional and individualistic model. Similarly, the fraud triangle does not take into consideration historical, socio-political and cultural aspect while dealing with fraud. This study contradicts the dominant view about the validity of the fraud triangle in dealing corruption cases in Pakistan’s public sector. The study raises question marks about the validity and generalizability of the fraud triangle. The critical approach of the study shows that how multi-faceted, interrelated, and complex nature of fraud is, which makes the fraud triangle unlikely to be presented as a valid model in context of corruption in Pakistan’s public sector. The author believes that a holistic cross-disciplinary research to understand and deter the complex phenomenon of fraud in general and corruption in specific is the need of the hour.

Fraud diamond, Machiavellianism and fraud intention

Article

Full-text available

Sep 2019

Purpose This study aims to test the causality of fraud diamond factors (pressure, rationalization, opportunity and capability) and Machiavellian personality on fraud intention. Design/methodology/approach This study used a 2 × 2 × 2 × 2 web-based laboratory experiment. Our subjects are accounting students from various Indonesian universities as surrogates of an accountant of a firm. We analyzed the data using the independent t -test. Findings This study provides empirical evidence that the four aspects of fraud diamond, namely pressure, opportunity, rationalization and capability cause fraud intention. Besides, high Machiavellian attitude also causes high fraud intention. Research limitations/implications This study is a Web-based one that is subject to the instability of internet access. Specifically, some subjects had to redo the completion of their experimental modules because of the unstable internet connection. Practical implications The results of this study suggest organizations to pay attention to their members’ behavioral aspects that can be the symptoms of fraud and to design whistleblowing systems to prevent fraud intention as an opportunity factor within organizations. Social implications Social implications are to develop the appropriate whistleblowing system to mitigate the fraud. Originality/value The novelty of this study lies in combining the experimental test of fraud diamond (internal and external factors) and Machiavellianism as a personality factor as the determinants of fraud intention. Further, another novelty lies in the use of the antifraud system as a proxy of opportunity that has not yet extensively investigated by previous studies.

Hileli Eylemlerin Nedenlerine İlişkin Paradigma Değişimleri: Üçgen, Elmas ve Diğerleri -Paradigm Shifts in Causes of Fraudulent Actions: Triangle, Diamond and The Others

Article

Full-text available

Sep 2018

Pınar Okan Gökten

Hileli eylemlere neden olan unsurların tanımlanması sıkça tartışılan konuların başında gelmektedir ve kapsayıcı bir entelektüel birikime sahiptir. Muhasebe literatüründe hileli eylemlerin nedenlerine ilişkin öncü paradigmanın hile üçgeni teorisi olduğunu söylemek mümkündür. Değişen iş dünyası ve yaşam tarzı nedeniyle, 1950 yılından günümüze, takip eden yıllarda çok sayıda farklı görüş ortaya atılmıştır. Bunlardan bir kısmı paradigma kaymasına neden olsa da, tam anlamıyla bir dönüşümden söz etmek mümkün değildir. Bu çalışmada, hile üçgeni teorisi ve takip eden modeller karşılaştırmalı olarak incelenmiş ve hileli eylemlerin nedenlerine ilişkin odağın çalışanlardan yöneticilere kaydığı ve araştırmacıların davranışsal özellikler üzerinde yoğunlaştığı tespit edilmiştir. Ayrıca, hile elması modelinin hileli eylemlerin nedenlerine ilişkin paradigma kayması yaratan yaklaşım olduğu değerlendirilmiştir. Identifying the factors cause fraudulent actions is an intensely debated issue and it has an extensive intellectual pedigree. It is fair to say that fraud triangle theory is the primary paradigm on causes of fraudulent actions in the accounting literature. Due to the changing business world and lifestyle, in the following years, from 1950 to the present, many different views emerged. Although some of these have caused paradigm shifts, we cannot talk about conversion. In this study fraud triangle theory and following models are comparatively examined and it is concluded that the focus on the causes of fraudulent actions has shifted from employees to executives and researchers are more concentrated on behavioural characteristics. In addition, fraud diamond model is considered to be the approach that created the paradigm shift for the causes of fraudulent actions.

Understanding and controlling financial fraud in the drug Industry

Article

Full-text available

Jan 2020
J Financ Crime

Purpose This study aims to assess the fraud cases, factors and control measures of financial fraud in the drug industry with evidence from Ghana. Drug industry and pharmaceutical are the same, and they are used interchangeably in this study. Design/methodology/approach Data from questionnaires were collected from 412 manufacturers, wholesalers and retailers of the drug industry. Data were presented and analysed with descriptive statistics and probit regression. Findings Results show that, in general, stealing of drugs, stealing of cash, usage of fake cheques, falsified documents and dubious accounting practices are some of the fraud cases in the industry. Factors such as gender, educational level, religious beliefs, regulatory measures, pressure, rationalization and opportunities influence financial fraud in the drug industry. Control measures such as thorough assessment of products, regular review of fraud policies, installation of fraud-detection software and effective internal systems could reduce the menace. Research limitations/implications The paper addresses a number of theoretical and systemic issues on financial fraud in the drug industry but with limited specific quantitative data or calculations as well as limited sample size. Further studies could offer a more quantitative approach with a larger sample size in an attempt, for instance, to estimate the financial costs of financial fraud to the drug industry. Practical implications This paper openly tackles various attempted frauds and financial malfeasances from stakeholder perspectives in the drug industry. Practical measures have been given to tackle the consequences of the menace. Originality/value This paper is geared towards providing valuable learning points for stakeholders in the drug industry to handle daily operations to assist them in detecting and preventing similar occurrence of financial fraud.

The Strategy to Optimize the Role of Government Internal Supervisory Apparatus (APIP) in Procurement Fraud Risk Management in Industry 4.0

Article

Dec 2021

Many challenges confront the efforts to build procurement fraud risk management in Industry 4.0. This study aims to assess the risk of procurement fraud in industry 4.0 and disclose strategies to optimize the role of internal auditors in mitigating these risks. The mixed-method has been conducted with data on procurement fraud risks generally accepted by government agencies. A survey involving 140 respondents and interviews with five experts have been completed. The risk assessment in the research findings involved seven procurement fraud risks, with "collusion between providers in e-tendering" ranking the highest. Procurement management must detect and prevent fraud by creating anti-hacker applications, conducting data analytics on business ownership, and ongoing monitoring. Internal auditors must undertake fraud prevention by improving their ability in data analytics, encouraging probity plans, and procurement assistance. Fraud detection is carried out through performance audits using computer-assisted audit techniques, probity audits, information technology governance audits, continuous audits, data analytics, and internal auditor integrity assessments through surveys to the auditee.

Title: ICBC Bank Risks Analysis

Research

Full-text available

May 2021

Reema Alkuwari

This paper will introduce the Industrial and Commercial Bank of China (ICBC) and provide highlights on the bank’s nature. Then, it will examine four risks: interest-rate risk (IRR), market-risk (MR), operational-risk (OR), and fraud-risk (FR) in the ICBC. Each chapter will define the risk, identify it sources, apply and discuss the measurements techniques for each risk on ICBC, then draw a conclusion regarding ICBC risk position and prevention techniques.

Fraud Triangle Theory: Calling for New Factors

Article

Full-text available

Mar 2021

The famous financial scandal of Enron, WorldCom and 1 Malaysia Development Berhad has harmed the auditor’s reputation as the protector of shareholders’ rights. Auditors have done their part by conducting systematic audit procedures and “What Could Go Wrong” analysis in assessing the possible risk area to assist fraud detection in the client’s financial matters. However, fraud cases never seem to decline. Regardless of any safeguarding measures established, fraud incidents can just occur and be worsened by economic downturn and prolonged inflation especially after the pandemic ends. Additionally, the characteristic of the modern business environment, technology sophistication and new generation traits had challenged Cressey Fraud Triangle Theory on its validity and relevancy. Therefore, associating all these possible challenges into consideration, this study aims to review prior literature related to the evolution of Cressey fraud theory to propose a new insight in considering relevant motivation factors that drive fraud penetrations. From the review, the study discovered the need for a detailed evaluation and research on the essential fraud element in constructing an all-rounded fraud prevention mechanism.

Fraud Triangle Theory: Calling for New Factors

Article

Full-text available

Dec 2020

Social Media as a Form of Virtual Whistleblowing: Empirical Evidence for Elements of the Diamond Model

Article

Full-text available

Dec 2021
J BUS ETHICS

This article originally advances the field of organizational whistleblowing by empirically investigating the suitability of the four elements of the fraud diamond as a means to understand the intention to disclose wrongdoing through virtual channels. This article also makes a contribution on the theme of whistleblowing as it relates to customers, an under-studied, however, relevant stakeholder in this field. The main findings of the article are as follows: (a) the four elements of the fraud diamond as they relate to whistleblowing—a combination of pressure, financial incentive, opportunity and rationalization, and capability—can explain the intentions behind customer reports of wrongdoing; (b) online social media channels are customers’ preferred means of whistleblowing; (c) the elements of opportunity and capability are strongly correlated with the use of social media as a method of disclosing wrongdoing; and (d) virtual channels can be useful for whistleblowers in order to avoid potential retaliation. Unique managerial and academic implications of these research findings are also discussed, extending the layers of knowledge on whistleblowing in organizations.

Efektifitas Peran Internal Audit Dalam Mencegah Dan Mendeteksi Kecurangan

Article

Full-text available

Jan 2020

This study aims to explain the role of internal auditor effectiveness in preventing and detecting fraud. The significance costs incurred due to fraud encourages the importance of strategies to overcome. Internal auditors as one of the functions of an independent appraiser help the company to minimize the occurrence of fraud. Therefore, optimizing its role is necessary to consider in preventing and detecting fraud. This role encourages the entity to make the internal audit function more effective. Aspects considered in creating an effective internal audit role are competence, size, independence, activities, management support for internal audit, and gender of CAE.

An Investigation of the Influence of the Worldwide Governance and Competitiveness on Accounting Fraud Cases: A Cross-Country Perspective

Article

Full-text available

Feb 2018

This article examines how worldwide governance, global competiveness, and other institutional determinants have influenced the number of accounting fraud cases in several countries. The researchers have focused more closely on the importance of 'good governance' as one of the indicators of development objectives in itself. The institutional perspective is employed to explain the complexity of frauds in different societies which can be compatible for the purposes of international judgments in order to increase the effectiveness of previous forensic accounting theories. In this paper, a linear regression model is tested where governance, competitiveness, and other institutional variables are associated with a measure of accounting fraud cases. From our results, we can merely claim that an increased level of controlled corruption and political stability might reduce the number of fraud cases in various countries, while more effective and independent governance services with a higher freedom of expression seemed to increase them. The existence of accounting crimes also appeared to be a suitable proxy of better competitiveness. Anglo-Saxon countries have more stated fraud cases than other countries, attributed, perhaps, to the finest commercial courts with the most professional and least corrupt judges in the world, with centuries of precedent cases and experience in dealing with fraud. Moreover, we believe that a better understanding of fraud detection is a potentially important element in forensic accounting analytics in the success of governance policies to enhance development and reduce the risk of bankruptcies related to the reported fraud cases of enterprises.

Fraud detection by testing the conformity to Benford’s law in the case of wholesale enterprises

Article

Full-text available

Dec 2017

The latest international crisis of the financial markets highlights the risks of instability, and the consequences of financial crime have a considerable effect on the performance of enterprises. The manipulation of selling prices or elements of financial statements even contribute to economic and social conflict in certain countries. The purpose of this study is to explore whether the conformity to Benford’s law of forensic accounting data is sustainable in the case of wholesale trade enterprises in the examined (2009-2015) period and Hungarian region. Our research aims to test various elementary and advanced (goodness-of-fit) statistical techniques to assess the validity of the reported statements. Overall, after examining the deviations in reflected and expected frequencies we assert the non-conformity of this law in some cases. However, our motivation is not only to suggest applied recommendations to enhance accountability for entrepreneurships, but also to outline further research directions to improve the forensic fraud detection and better understanding of accountancy crimes for the management. © 2017, Czestochowa University of Technology. All rights reserved.

La Auditoría Forense en el espacio social de la ciencia y la tecnología

Article

Full-text available

Jun 2017

La auditoría forense. En el espacio social de la ciencia y la tecnología Revista Publicando, 4 No 11. (2). 2017, 698-716 ISSN 1390-9304 698 La Auditoría Forense en el espacio social de la ciencia y la tecnología. Resumen. Se analizó la interrelación Ciencia Tecnología Sociedad (CTS) a partir de tomar en cuenta el tipo de ciencias: formal o factual y las características de como se establece y se gestiona el conocimiento científico en cada una de ellas. A partir de la interrelación CTS se analizó el caso de la Auditoría Forense. El análisis de los fundamentos filosóficos permitió considerar la epistemología de la complejidad como esencial para poder comprender el caso específico Auditoría Forense, dentro de las ciencias contables, la compleja relación y la multilateralidad que se presenta en su concepción misma. La Auditoría Forense se conceptualiza en enfoque de ciencia factual y de ciencia formal. Factual en la investigación del hecho económico y formal en el análisis de estructura lógica del pensamiento creador del fraude, la concepción de su mundo en valores, conocimientos y su conexión con el crimen económico. A partir de la concepción del triángulo de fraude se concluyó que la interrelación de esta disciplina con la sociedad, está caracterizada por: la racionalización de la conducta fraudulenta por los delincuentes, la naturaleza de la colusión en el fraude y por los intentos de regulación para promover la denuncia de irregularidades. La interrelación de la Auditoría Forense con la Tecnología se caracteriza por tres aspectos fundamentales: La aplicación de sistemas contables, el papel de Internet y las redes sociales en las posibles denuncias de fraude, y la aplicación de la Minería de Datos.

ANÁLISIS DE LOS TIPOS DE AUDITORÍA (POST PANDEMIA)

Book

Full-text available

Dec 2022

La auditoría como herramienta brinda confianza a la sociedad, se debe contextualizar en los movimientos actuales de internacionalización y globalización, no solo de la economía sino también de la cultura. Las organizaciones dejan de estar insertas en el conjunto local, regional, nacional e internacional para empezar a ser parte del patrimonio global. La auditoría se debe orientar hacia el conocimiento y la previsión o pronóstico de la organización en todo sentido. Por así decirlo, la auditoría debe reconocer el pasado para dirigirse al futuro. El sostener una comunicación eficiente entre el auditor y la representación administrativa de la organización encamina mejor el trabajo de auditoría, en cuanto las soluciones que puede aportar el auditor coincidan con las limitaciones y estrategias gerenciales.

ANALYSIS AND MANAGEMENT OF FRAUD IN NIGERIAN BANKING INDUSTRY: STAKEHOLDERS' PERSPECTIVES

Article

Full-text available

Jan 2023

The study analyzed trend of frauds in the Nigerian Deposit Money Banks (DMBs) from 2005 to 2018 and the perceptions of the stakeholders on the devised mechanisms to manage the effects of fraud in DMBs. Data were obtained from the annual reports of the Nigerian Deposit Insurance Corporation (NDIC) and through the use of structured questionnaire to elicit information from the respondents. A sample size of 50 senior staff with at least 10 years' experience was drawn from 10 banks (five from each bank) with relative high records of fraud cases. The data were analysed using descriptive statistics method. The analysis reveals that fraud cases and the value of frauds in the Nigerian banking industry have been on the increase particularly at the emergence of e-banking. The respondents agreed to the effectiveness of the devices and strategies employed to reduce and minimise fraud occurrence. However, the need for more enlightenment of customers on safe handling of security details, timely and effective persecution of fraudsters, compliance with and the enforcement of relevant Fraud Prevention Acts and the strengthening of the internal control units of banks among other things are still desirable.

Accounting Quality

Article

Dec 2022

Terence P Bradford, Sr., MBA, M.Acc, CGMA, CPA

Corporate scandals such as Enron, WorldCom, and others have increased the sensitivity of the public toward the ethical misconduct of firms. The Public Company Accounting Oversight Board (PCAOB) is independent of the accounting profession, and they are not considered a government entity. The PCAOB is a non-profit corporation given the mandate to oversee public company auditors. Two members of the five-member board must be Certified Public Accountants (CPAs), to make sure that PCAOB has the required level of expertise. Due to significant changes to audit engagement practices because of new regulatory pressures such Sarbanes-Oxley Act (SOX), studies have been done to determine if it has improved audit quality. The American Institute of Certified Public Accountants (AICPA), Securities and Exchange Commission (SEC), and PCAOB are a few of the regulatory and professional bodies that set independence rules and monitor compliance in the United States. The Committee of Sponsoring Organizations of the Treadway Commission (COSO), established a framework for designing, implementing, and assessing internal controls.

PENGARUH PENERAPAN MODEL AKUNTANSI SEKTOR PUBLIK DAN SISTEM PENGENDALIAN INTERNAL TERHADAP UPAYA PENCEGAHAN FRAUD

Article

Full-text available

Dec 2022

A system of accountants known as public sector accounting is utilized by public sector organizations. Threats to the administration of a public accounting might arise from the management structure that a business or organization has created for managing its enterprise. The threat of fraud is one of these. This review was conducted to determine the effect of the application of the public sector accounting model and internal control on fraud prevention efforts. This study uses a qualitative method with the use of previous research data. The results of the research in the form of analysis show that the application of the public sector accounting model has a positive effect on fraud prevention efforts. The results of the second analysis show a positive influence between internal control on fraud prevention efforts.

A Review on Forensic Accounting Profession and Education: Global Context

Preprint

Nov 2022

This review provides an understanding of the teaching and practising of forensic accounting across the globe. It includes a review of published forensic accounting studies that conclude that forensic accounting is of benefit to both students and professionals. Despite this, there are areas of concern; namely, the insufficiency of an appropriate structure of regulation and a lack of control over the academic qualifications to enter the profession. This review of both the teaching and practising of forensic accounting provides an overview of the vital issues and concerns that must be understood in order to advance the essential application of forensic accounting. It is expected that this review will influence future policy that will advance business and limit episodes of fraud. The amount of published literature on the subject of forensic accounting is widespread and diverse. However, there is a lack of comprehensive understanding regarding the strengths and weaknesses of forensic accounting; this review will address this and provide policymakers with a thorough explanation of the subject.

Fraud Triangle against Fraudulent Financial Statements

Conference Paper

Jan 2022

Nowe technologie a formy oszustw: Studium kryminologiczno-kryminalistyczne (New Technologies and Forms of Fraud: Criminological and Forensic Study)

Chapter

Full-text available

Jan 2017

Strain, coping and sustained fraud offending

Book

Apr 2020

Research across a range of disciplines has generally focused on the decision to commit fraud rather than how fraud is sustained over time. This study uses interviews with serious workplace fraudsters to examine enablers of sustained offending. We present coping strategies offenders use to manage strain and sustain offending. We highlight that while rationalisation is germane for first-time offending, coping may be a more useful construct for understanding how offending is sustained over time.

Whistleblowing and fraud in digital era

Article

Full-text available

Sep 2020

This article discusses whistleblowing and fraud in the digital era in Indonesia using a literature study. Digital whistleblowing allows someone to reveal a number of information accompanied by photos/ videos through social media/ other online sources. This information is investigated further to find out if there is fraud after checking the truth, because there is a possibility that the information is inaccurate. The absence of a checking process and confirmation of its truth causes inaccurate information. The case that occurred in one of the SOEs in Indonesia initially emerged from a tweet on a Twitter account which was finally able to uncover the alleged fraud in terms of abuse of office. This is an example of the role of technology in digital whistleblowing and fraud. Digital technology can detect if there is a change in the softcopy file through the recorded digital footprint and then submit it to the authorities so that they can track the identification of previous users related to the possibility of document leakage. Artificial Neural Network (ANN) which is part of artificial intelligence (AI) technology can be used to detect fraud. ANN is a system that is able to process complex amounts of data through pattern recognition. There has been much discussion about the use of information technology in Indonesia, but the use of ANN has not been much discussed.

World Governance Indicators and Fraud: Evidence from One Belt One Road Countries

Article

May 2021

This paper investigates the effect of worldwide governance indicators and global competitiveness on the level of accounting fraud in One Belt One Road (OBOR) countries. We use publicly available data from various sources. We perform principal components analysis to reduce the six governance indicators to three governance indexes. Governance indicators have significant impact on fraud and the effect could be positive or negative depending on the dimensions involved. Voice and accountability and political stability show significant negative impact on the number of fraud cases. Competitiveness shows a positive but insignificant effect on the level of fraud cases. Democratic countries report lesser number of fraud cases. The findings should be read with caution because of the diversity in the countries in the sample. OBOR countries exhibit different governance models, which may affect their indicators and as a result, the extent of fraud cases reported may be influenced by the regime practiced by a country. The study considers the relevance of governance indicators to policymakers in dealing with rising level of fraud since fraudulent activities affect productivity. Fraud analysis should be embedded in the governance architecture of countries to stimulate development and mitigate the risks of bankruptcies, business failures and loss of investments. Contribution/Originality: The paper contributes to literature on fraud and forensic accounting theories by employing the institutional framework to highlight the occurrence of fraud in different settings.

A Systematic Literature Review on Forensic Accounting

Conference Paper

Full-text available

Nov 2020

The objective of this study is to systematically analyze the existing literature on forensic accounting and thereby identifying the existing gap in the forensic accounting literature. In the era of increasing accounting scandals, the importance of forensic accounting is also increasing. This study provides an overview of previous studies which have been conducted in the area of forensic accounting which can be used by professionals, regulators, academics, researchers, forensic accounting practitioners and etc. The current study systematically analyzes a sample of twenty-four (24) research articles which have been conducted in the broad area of forensic accounting. The sample has been selected from research articles published during period starting from 2015 to 2020. The results of this study reveal importance of incorporating forensic accounting education into undergraduate and graduate level courses. More importantly, forensic accountant should have skills in multidisciplinary areas. Similarly, knowledge on big data is essential to be a good forensic accountant. Further, this study suggests four (04) key areas for future researches which are; importance of forensic accounting education, how forensic accounting could be used to reduce financial collapses practical application of forensic accounting, and the role of forensic accountant in the field of auditing.

Les conflits d’intérêts à l’épreuve des lanceurs d’alerte : recherche-intervention dans le cadre de la réglementation Sapin II

Article

Full-text available

Nov 2020

Conflicts of interests and alerts: A research-intervention on the impact of the Sapin II Act An essential issue for risk managers is their ability to issue alerts about organizational risks and make them heard at the governing level. This question is addressed both theoretically and managerially by drawing on case studies in the insurance industry. This research discusses both this profession’s traditional, norms and, too, the risk manager’s role which, especially since the provisions against corruption in the Sapin II Act in France, is to uphold an orthodox form of management that reaches beyond the field of the law into issues related to questions of legitimacy and ethics.

Forensic Accounting Theory

Chapter

Full-text available

Sep 2020

Peterson K. Ozili

This article presents a forensic accounting theory. Forensic accounting theory is an explanation of why and how the choice of methods and techniques used to detect creative accounting or fraudulent manipulations in financial reporting, and the outcome of using such methods or techniques, depends on the accounting and non-accounting decisions taken into consideration by the forensic accountant or investigator. The forensic accounting theory developed in this paper is useful to both practitioners and academics, and the resulting contribution to accounting theory and forensic science are useful to the problem-solving process in the global fight against financial crime.

Implementation and Impact of Internal Control in Preventing Fraud in The Public Sector

Conference Paper

Full-text available

Aug 2020

Fraud is a growing problem and can cause extraordinary threats to the organization. Failure to prevent and detect fraud has serious consequences for the organization. This study discusses how internal control in the public sector can prevent fraud. To achieve these goals, researchers use a literature study of various publications related to internal control in the public sector. The results showed that the weaknesses of internal control have been identified to cause fraud. Fraud will never be prevented completely, so that public sector organizations can implement internal controls to prevent and detect fraud. Management in the public sector must be able to create awareness and understanding of anti-fraud culture to all elements in the organization as an effort to prevent fraud.

Fraud and Governance: A Review June 2020

Article

Full-text available

Jun 2020

Michel Sayumwe

This literature review is organized in five sections. Firstly, we begin with general ideas and continue with the origin of the fraudulent. Secondly, we discuss the struggle of the phenomena, insisting on the available mechanisms. Finally, we’ll discuss the link between audit and fraud.

FRAUD RISK ASSESSMENT: EXPERIMENTAL STUDY ON THE ALTERNATIVE FRAUD MODEL AND AUDITOR RISK PREFERENCES

Article

Full-text available

Mar 2020

Fraud risk assessment is an important part of the audit process and one of the toughest challenges faced by auditors. In considering fraud risk assessment, fraud models and risk preferences can influence auditor’s decisions. This study uses a 2x2 between-subject experimental design with a total of 110 auditors of public accountant firms in Central Java as participants and produces 60 data ready for processing. Participants were formed into 4 groups with different treatments which the treatments consist of Diamond Fraud model with high and low risk preferences and Pentagon Fraud model with high and low risk preferences. The results show that the use of Pentagon Fraud model will result a more conservative fraud risk assessment. When auditors dare to take high risk action, the resulting fraud risk assessment will be low. In addition, the fraud model and risk preference variables show a significant influence on the performing of fraud risk assessment. There is an interaction between fraud models and auditors’ risk preferences in the performance of fraud risk assessment.

Forensic Accounting Theory

Article

Full-text available

Jan 2020

Peterson K. Ozili

The article formulates a forensic accounting theory. Forensic accounting theory is an explanation of why and how the choice of methods or techniques used to detect creative accounting or manipulations in financial and non-financial reporting, and the outcome of using such methods or techniques, depends on the accounting and non-accounting decisions taken into consideration by the forensic accountant or investigator. The forensic accounting theory developed in this paper is useful to both practitioners and academics, and the resulting contributions to accounting theory and forensic science are useful to the problem-solving process in the global financial reporting agenda.

Do The Fraud Triangle Components Motivate Fraud In Indonesia?

Article

Full-text available

Dec 2019

In present day Indonesia, cases of frauds are rarely covered by the media. Even though some fraud might not be material enough to be detected, the motivation for conducting fraud exist, especially when the internal systems have some leakage. The fraud triangle and the Beneish model are two well-developed theories to understand the motivations for fraud and to detect earnings manipulation in a business. Therefore, this empirical research aims to examine the applicability of the fraud triangle components combined with the M-score from Beneish model. The investigation involves panel data from 270 non-financial companies listed on IDX (Indonesia Stock Exchange) during 2013-2015. The results approved that companies with detected fraud received (1) higher pressure on financial stability, leverage, and financial targets; (2) lower numbers of independent commissioners and more receivables from special (related) parties, and (3) more frequent changes to auditors. Abstract In present day Indonesia, cases of frauds are rarely covered by the media. Even though some fraud might not be material enough to be detected, the motivation for conducting fraud exist, especially when the internal systems have some leakage. The fraud triangle and the Beneish model are two well-developed theories to understand the motivations for fraud and to detect earnings manipulation in a business. Therefore, this empirical research aims to examine the applicability of the fraud triangle components combined with the M-score from Beneish model. The investigation involves panel data from 270 non-financial companies listed on IDX (Indonesia Stock Exchange) during 2013-2015. The results approved that companies with detected fraud received (1) higher pressure on financial stability, leverage, and financial targets; (2) lower numbers of independent commissioners and more receivables from special (related) parties, and (3) more frequent changes to auditors. JEL classification:K40, K41.

THE NEW FRAUD TRIANGLE THEORY - INTEGRATING ETHICAL VALUES OF EMPLOYEES

Article

Full-text available

Oct 2018

Technological advancements and the continual evolution of the global business environment provide both enhanced tools and additional challenges for perpetration and concealment as well as the prevention, detection and investigation of employee fraud. Increasingly external auditors and forensic accountants are being asked to play an important role in helping organizations prevent and detect employee fraud. Detecting employee fraud is not an easy task and requires thorough knowledge about the nature of fraud, how it can be committed and concealed. This paper aims at broadening knowledge of external auditors, forensic accountants and other stakeholders on employee fraud and why it occurs. It explains Cressey’s fraud theory of opportunity, pressure, and rationalization and shows its significance, presents the other fraud models and relates them to Cressey’s model, and proposes a new fraud triangle model integrating ethical values of employees that could consider when assessing the risk of employee fraud.

Corruption in Indonesian local government: Study on triangle fraud theory

Article

Full-text available

Sep 2018

The paper examines the effect of performance accountability, regional income, e-government, internal audit capabilities, audit responses, and public officials wage on corruption in local government using fraud triangle theory framework. The increasingly widespread corruption cases even though abundance of government’s programs have been done to overcome them, let this research seeks to answer whether government’s priority programs are aligned with corruption eradication strategy. This paper uses local government panel data in Indonesia from 2010 to 2013 analyzed using multiple linear regression method. The result shows that performance accountability and public official wage have negative effect on corruption, while audit responses have positive effect on corruption. On the other hand, regional income, e-government, and internal audit capabilities show no evidence on effect on corruption. This finding is fairly robust in separate analysis on municipalities and local government outside Sumatra and Java. This paper provides empirical evidence that audit responses can detect corruption whereas performance accountability and the increase in regional income increases can contribute to curbing corruption.

CFEBT Risk Triangle as a Tool for Detecting and Evaluating Risks of Accounting Records: a Case Study

Article

Full-text available

Jun 2018

Zita Drábková

The objective of the present contribution is to evaluate the risk of accounting errors and frauds in small companies predominantly operating in agriculture. It is based on an analysis of the CFEBT risk triangle for financial statements reported for the years 2012–2016. The CFEBT risk triangle is applied in form of a case study aimed at risk detection of occurrence of accounting errors and frauds for a selected sample of companies. A detailed analysis of a risk of impact of accounting errors and frauds is illustrated in the case study of an accounting unit chosen from the sample of companies evaluated. Results of the presented case study into the detection and evaluation of the risk based on interconnections between the reported profit (loss) and the generated cash flow during 5 accounting periods confirm the significance of having a complex view for decisionmaking of users based on reported accounting records and accounting data. Future research into the CFEBT risk triangle focuses on performance of complex analyses for individual types of business activities of small and middle-sized companies in the context of Czech accounting standards and IFRS. © 2018 Mendel University of Agriculture and Forestry Brno. All rights reserved.

HİLENİN TESPİTİ VE ÖNLENMESİ: İÇ DENETİM PERSPEKTİFİ

Article

Jan 2022

Ahmet KARAHAN

Örgütlerde Hileli Davranışlar ve Sonuçları

Chapter

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Jan 2021

Mustafa Doruk Mutlu

Bankacılık Sektöründe Hata ve Hileler: 1990'lı Yıllardan Günümüze Bir Bakış

Chapter

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Oct 2021

Murat Kesebir

Muhasebe Hileleri: Fail, Hile ve Dijitalleşme Ekseninde Bir Bakış

Chapter

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Oct 2021

Hile ve İnsan

Chapter

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Oct 2021

DİJİTAL PAZARLAMA UYGULAMALARINDA HİLE

Chapter

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Oct 2021

Dijital pazarlama, internet ve teknolojik gelişmelerin işletme ve tüketicilere çeşitli fırsatlar sunan bir pazarlama disiplini olarak, yeni nesil alışveriş kültürünün şekillenmesini sağlamaktadır. Farklı teknolojik ve dijital platformlar kullanılarak pazarlama faaliyetleri yürütülmektedir. Hız, esneklik ve özellikle zaman ve mekândan bağımsız yapılan pazarlama faaliyetleri hem tüketiciler hem de işletmeler için önemli avantajlar sunmaktadır. Ancak sanal dünyanın karanlık yüzü son yıllarda kötü niyetli kullanıcıların profesyonel çalışma alanı haline gelmiştir. Güvenlik zafiyeti bulmak suretiyle pek çok şekilde, bireysel tüketicileri ve işletmeleri çeşitli dijital yöntemler ile aldatma ve hileli uygulamalar ile dolandırma eylemlerinin sayısı giderek artmaktadır. Bu tarz uygulamalar karşısında kamuoyunun farkındalığının artması da oldukça önem kazanmaktadır. Bu çalışmada dijital pazarlama stratejilerinden olan, arama motoru pazarlaması, mobil pazarlama, elektronik posta pazarlaması ve sosyal medya pazarlaması alanlarında yapılan aldatıcı ve hileli pazarlama uygulamalarına yer verilmektedir.

Türkiye Ekonomisine Yön Veren BİST 100 Endeksinde Kadın Sorumlu Denetçi Durumu: 2009-2019 Key Words: Women Partner Auditor, Auditing, BIST 100

Conference Paper

Full-text available

Oct 2020

Özet Son yıllarda denetim mesleği ile ilgili yapılan cinsiyete dayalı çalışmalar, dikkat çekici şekilde artmıştır. Denetim firmalarında çalışan kadın sorumlu denetçi (KSD) sayısında artış olsa da aynı artış denetim raporlarında gözlemlenmemektedir. Çalışmanın amacı, sorumlu denetçiler tarafından imzalanan raporların ne kadarının KSD tarafından imzalandığını tespit etmektir. Bu amaçla, ekonominin temel göstergelerinden biri olan 3. dönem BİST 100 endeksinde yer alan şirketlerin 2009-2019 yılları arasındaki sürekli denetim raporları incelenmiştir. 11 yıllık dönemde KSD tarafından imzalanan raporların ortalama oranı yaklaşık %21’dir. Türkiye’deki 4 büyük denetim firmasında kadın sorumlu denetçi oranının en çok (%43) olduğu firma KPMG’dir. Ancak çalışmada KPMG, KSD tarafından imzalanan rapor sayısının ve raporları imzalayan farklı KSD sayısının en az olan firma olarak tespit edilmiştir. E&Y ise rapor sayısının, farklı KSD sayısının ve kadınların farklı sektörlerde imzasının en fazla olduğu firmadır. Diğer denetim firmalarında ise 2019 yılında KSD tarafından imzalanan rapor sayısında önemli bir artış olduğu ortaya çıkmıştır. Anahtar Kelimeler: Kadın Sorumlu Denetçi, Denetim, Cinsiyet, BİST 100, 4 büyük denetim Firması

Revisión de las herramientas estadísticas empleadas en la detección del lavado de activos

Article

Full-text available

Jun 2016

The objective of the present work was to perform a bibliographic review to identify the fundamental articles related to the use of statistical tools used in the detection of money laundering. To carry out the research, the Databases: Scopus and ScienceDirect were revised to explore, detect and analyze scientific articles that apply statistical techniques for the detection of asset washes and financial fraud. The review was carried out with respect to the keywords: "money laundering" and "fraud detection". A total of 94 articles related to these themes were obtained. These articles were reviewed in terms of their content to detect those of greater importance according to the objective proposed for this contribution. It was concluded that one of the fundamental difficulties in the application of statistical methods in the area of fraud in general, or in the specific case of money laundering, is associated with the same criminal dynamics, which makes these techniques have to be evolutionary and subject to constant change. The content review allowed the identification of different methodologies that can be applied either when it has been established that the organizational audit has been weak, with franchise control models that facilitate the perpetration of the crime, or to determine weaknesses in internal control and poor activity of the Auditor that allowed the occurrence of the crime. Likewise, it was possible to identify articles using a methodology that also serves to determine the efficiency of forensic expertise in terms of the content required by law and formulate the conclusions that later serve as evidence for the prosecution of a particular case. The importance of the statistical techniques used can help to determine the organizational, control and mainly the cause - effect relationship at the moment of the infringement and the damage, and even determine the quantum of the result caused

Theoretical and empirical aspects of fraud triangle

Article

Full-text available

Jan 2018

TEORIJSKI I EMPIRIJSKI ASPEKTI TROUGLA PREVARE-THEORETICAL AND EMPIRICAL ASPECTS OF FRAUD TRIANGLE

Article

Full-text available

Mar 2018

SUMMARY Fraud Triangle is the first model that has been designed on the basis of an empirical research conducted to serve as a fraud detection tool. Theoretical and empirical research has unambiguously demonstrated the need for modification of this model. The paper presents proposals that have a theoretical character, as well as suggestions that have arisen after empirical research. In addition to the proposals that go towards the modification of this model, opinions are also raised that challenge the usefulness of fraud triangles in detecting and preventing fraud. The theory and practice agree that a new model is needed. Key words: fraud triangle, fraud, pressure, opportunity, rationalization

TECHNOLOGIE INFORMATYCZNE WE WSPÓŁCZESNEJ RZECZYWISTOŚCI GOSPODARCZEJ

Book

Full-text available

Feb 2018

TECHNOLOGIE INFORMATYCZNE WE WSPÓŁCZESNEJ RZECZYWISTOŚCI GOSPODARCZEJ Monografia poświęcona jest zagadnieniom związanym z rolą i wpływem nowoczesnych technologii informatycznych na różne sfery współczesnej gospodarki. Składa się ona z jedenastu rozdziałów, z których każdy dotyka różnorakich kwestii dotyczących funkcjonowania rzeczywistości gospodarczej i zmian, jakie się w ich obszarze pojawiają wraz postępami w sferze IT. Zagadnienia poruszane w monografii odnoszą się nie tylko do możliwości, jakie wyłaniają się wraz z rozwojem technologii informatycznych, ale również do nowego typu wyzwań oraz zagrożeń, jakie łączą się z ich wykorzystaniem. INFORMATION TECHNOLOGY IN CONTEMPORARY ECONOMIC REALITY The monograph is devoted to the issues connected with the role of information technology and its impact on various spheres of contemporary economy. It is composed of eleven chapters and each one is focused on various aspects related to the functioning of business reality and changes which appear there along with IT-related progress. The issues which have been mentioned in the monograph relate not only to the opportunities which emerge with the development of information technology. They also relate to the challenges and threats connected with its utilization.

Technologie informatyczne we współczesnej rzeczywistości gospodarczej

Book

Full-text available

Dec 2017

Monografia poświęcona jest zagadnieniom związanym z rolą i wpływem nowoczesnych technologii informatycznych na różne sfery współczesnej gospodarki. Składa się ona z jedenastu rozdziałów, z których każdy dotyka różnorakich kwestii dotyczących funkcjonowania rzeczywistości gospodarczej i zmian, jakie się w ich obszarze pojawiają wraz postępami w sferze IT. Zagadnienia poruszane w monografii odnoszą się nie tylko do możliwości, jakie wyłaniają się wraz z rozwojem technologii informatycznych, ale również do nowego typu wyzwań oraz zagrożeń, jakie łączą się z ich wykorzystaniem.

Management controls: The organizational fraud triangle of leadership, culture and control in Enron

Article

Full-text available

Pathways to accountant fraud: Australian evidence and analysis

Article

Full-text available

Jul 2015
Account Res J

Purpose – The purpose of this paper is to explore pathways to fraud perpetrated in accounting-related roles, focusing both on situationally driven attitudes and contextual elements. Design/methodology/approach – Drawing on an anomie-based criminological taxonomy developed by Waring et al. (1995) and Weisburd and Waring (2001), which highlights individual attitudes and situational elements and their connection to illegitimate behaviour, the authors perform a qualitative content analysis of available media and court-reported information on a hand-collected database of 192 accountant frauds in Australia during the period 2001-2011. Findings – The analysis highlights four distinct pathways to accountant fraud – crisis responders, opportunity takers, opportunity seekers and deviance seekers – and the relative distribution of identified cases among these pathways. It also identifies the prevalence of gambling, female offenders, small and medium enterprises as victims, as factors in fraud, as well as the relatively unsophisticated methods in much accountant fraud. In addition, it establishes the importance of situational attitude in moderating inherent character as it relates to fraudulent behaviour and the variable importance of the fraud triangle elements across the pathways to accountant fraud. Originality/value – This paper provides direct evidence on the nature and pathways to accountant fraud, thus improving understanding of a significant category of occupational fraud. The evidence challenges conventional characterisations of accountant fraud offenders in prior research.

Broadening the Fraud Triangle: Instrumental Climate and Fraud

Article

Full-text available

Feb 2015

We survey a unique respondent group of fraud perpetrators, auditors who investigated fraud, and employees who witnessed fraud within organizations, to identify whether, and how, an instrumental organizational climate is associated with fraud. We define an instrumental climate as one in which employees make decisions in their own or the organization’s best interests to the exclusion of ethical concerns. We find that 39 percent of respondents agreed or strongly agreed that an instrumental climate was present when fraud was perpetrated. This climate is associated with particular elements of the fraud triangle including motives such as a malevolent work environment and social incentives and pressures, as well as rationalizations that are primarily oriented toward others. One specific rationalization—helping the company—draws attention to the phenomenon of unethical proorganizational behavior. Our results suggest that fraud has an important social dimension that is largely neglected by current fraud triangle interpretations.

A Case of Declining Gross Margins

Article

Full-text available

Feb 2011

Based on the facts of an actual fraud investigation and utilizing dialog to creatively present materials that will hold the student's interest, this case introduces students to financial statement fraud and highlights the internal controls of inventory and sales for a private business. It provides students the opportunity to complete financial statement analysis relating to gross margins, and students are asked to identify weaknesses in the company's internal control system. Students are also asked to make recommendations for improvement in the form of a written memo. The case is simple but can be used to introduce the concept of fraud investigation and can stimulate lively classroom discussion concerning student perceptions of whether fraud is, in fact, taking place. It can be used with either introductory-level financial accounting classes or more highly developed accounting courses such as auditing or fraud examination.

The Effect of Evidence Strength and Internal Rewards on Intentions to Report Fraud in the Dodd-Frank Regulatory Environment

Article

Full-text available

Aug 2013
AUDITING-J PRACT TH

There are many unanswered questions and concerns regarding the consequences of the fraud whistleblowing environment created by the Sarbanes-Oxley (SOX) and Dodd-Frank Acts. While SOX requires audit committees to implement anonymous internal reporting channels, the Dodd-Frank Act offers substantial monetary incentives that encourage reporting to the Securities and Exchange Commission (SEC). To mitigate concerns that employees might bypass internal channels, some companies are considering offering internal whistleblowing incentives. However, it is unclear how internal incentives will affect employee whistleblowing behavior. We experimentally examine the impact of an internal incentive on employees' intentions to report fraud. Across treatments, we find a greater likelihood of reporting internally than to the SEC. Evidence strength interacts with the presence of an internal incentive such that SEC reporting intentions are greatest when evidence is strong and an internal incentive is present. When evidence is weak, the presence of an internal incentive decreases SEC reporting intentions. Data Availability: Data used in this study are available from the authors upon request.

The Incidence and Detection of Misstatements: A Review and Integration of Archival Research

Article

Full-text available

Jan 2000

The construction of the risky individual and vigilant organization: A genealogy of the fraud triangle

Article

Full-text available

Apr 2014
ACCOUNT ORG SOC

This article examines how a vision of organizational fraud has been constructed around a particular technology, the fraud triangle, which was initially developed in the aftermath of the creation of the fraud examination discipline. We examine the genealogy of the fraud triangle and follow various chains of translations underlying its construction. One of the main translation trajectories we uncover presents individuals as vectors of moral riskiness needing to be vigilantly monitored and controlled by the organization. The organization is conceived of as a prime site in which fraud is to be addressed – not annihilated but significantly reduced as long as sufficient care is devoted to establishing layers of vigilance. As such, the fraud triangle redefines social, political and economic relations through a web of translations that both celebrate and normalize the use of organizational surveillance systems to control risk ensuing from the individual’s (alleged) frail morality. In the process, other visions of fraud, focused on the broader role of society, political agendas and powerful economic institutions in engendering and preventing fraud, escape from view.

The Psychology and Sociology of Fraud: Integrating the Behavioral Sciences Component Into Fraud and Forensic Accounting Curricula

Article

Full-text available

Nov 2008

Sridhar Ramamoorti

Red flagging as an indicator of financial statement fraud: The perspective of investors and lenders. FULL TEXT: http://hdl.handle.net/2263/2782

Article

Full-text available

Apr 2000

Carolina Koornhof

There is increasing international concern about the escalation of fraud and, in particular, financial statement fraud. Detecting financial statement fraud and proving such fraud remains an elusive goal. Red flagging is an early warning system that has been used by auditors to determine the probability of financial statement fraud. The purpose of this research project was to survey investors and lenders in South Africa on their use of red flags and to obtain their opinions on the relative importance of individual red flags. A questionnaire was sent to banks that are registered with the Registrar of Banks (representative of lenders) and to portfolio managers registered with the Financial Services Board (representative of investors). The research findings indicate that lenders and investors in South Africa appear to be aware of the benefits of red flagging as an early warning system. A structured approach (questionnaires/checklists) in using them is to be lacking at present. Respondents rated all red flags in the questionnaire as being important. No distinction was discernable among the different categories that were based on the nature of red flags.

The Ties that Bind: The Decision to Co-Offend in Fraud

Article

Full-text available

Jun 2013
CONTEMP ACCOUNT RES

It is frequently observed that fraud has a greater economic impact on society than any other category of crime. Arguing that both research and practitioner frameworks in auditing and forensic accounting have tended to adopt an individualizing perspective predicated primarily on solo-offending, this article adopts an inductive approach to consider why individuals co-offend in fraud. It reports the results of a set of interviews with 37 individuals convicted of a range of frauds including financial statement fraud, insider trading, credit card fraud, money laundering and asset misappropriation. In each instance, the fraud was perpetrated by a group of two or more co-offenders. Based on inductive, exploratory case coding, we find that reasons for co-offending vary according to the type of bond that exists between co-offenders. Two dimensions of fraudulent co-offending are identified– the primary beneficiary of the fraud and the nature of group attachment – to derive three distinct archetypes of bonds between co-offenders: (i) individual-serving functional bonds, (ii) organization-serving functional bonds and (iii) affective bonds. Key elements of each archetype as well as their impact on the decision to co-offend are examined. Our findings suggest that the social nature of fraud is not merely an incidental feature of the crime, but is instead a potential key to understanding its etiology and some of its distinctive features. They also support the need for diagnostic tools to move beyond individualistic analyses of fraud toward a broader, group sensitive assessment of fraud risk.

Doing Research in Prison:: Breaking the Silence?

Article

Full-text available

May 1999

Alison Liebling

This article reflects on some of the tensions experienced in doing prison research. Both qualitative and quantitative `styles of research'—in so far as they can be characterized as discrete styles—have their dangers and rewards. The `truths' of sociology's concern with humanistic method and its discoveries of the painfulness of prison are valid, and yet need to be reconciled with quantitative findings about the apparent ordinariness of prison for generalized groups of prisoners, about differences between prisoners and individual instances of violence/suicide/disorder, whose origins may have individual-psychological as well as situational-sociological components, and about the distinctions which may be drawn between prisons—some having more legitimate regimes than others. The absence of `pain' from quantitative research accounts of prison life is surprising. The author argues that research in any human environment without subjective feeling is almost impossible—particularly in a prison. These feelings—belonging to staff, prisoners and researchers—can be a significant guide to or even source of valuable data. Recent accounts of the role of emotion in criminology and in research have been helpful in making sense of some of the turbulence discovered and experienced by members of the research team involved in a recent project.

How divergent are pedagogical views toward the fraud/forensic accounting curriculum?

Article

Full-text available

Mar 2012

Accounting programs around the world have been revising their curricula to include courses in "fraud/forensic" accounting. Yet, an initial review of these courses indicates there may be divergent approaches to their development. This article identifies the characteristics of three underlying course development perspectives and their implications for accounting programs. Next, the results of a survey of fraud/forensic instructors and course syllabi are presented to identify the developmental approaches used in these courses. The article is written to help future course developers who are considering introducing fraud/forensic accounting into their accounting programs as well as those accounting educators who are revising their existing courses.

The Ford Pinto Case and the Development of Auto Safety Regulations, 1893-1978

Article

Full-text available

Jan 1998

Matthew T. Lee

In an influential 1977 article in Mother Jones magazine, journalist Mak Dowie accused Ford Motor Company executives of callously deciding to produce and continuing to market the Pinto (which he labeled a "firetrap") even after company crash tests showed that its gas tank would mptue in rea- end collisions at relatively low speeds (Dowie, 1977). This reprehensible decision, according to Dowie's interpretation, derived from a cost/benefit analysis which purportedly demonstrated that settling the few inevitable lawsuits filed by burn victims or thek families would cost less than the eleven dollars per car needed to fix the defective tanks (Green, 1997, p. 130). Dowie, along with well-known consumer advocate Ralph Nader, held a press confer- ence in Washington, D.C. on August 10, 1977, to draw national attention to the case. One day later, the National Highway Transportation Safety Admin- istration (NHTSA) began its own investigation of the Pinto gas tank (Cullen, Maakestad, and Carender, 1987). Lee Strickland was the NHTSA engineer assigned the task of determimng if the Pinto gas tank met the criteria of a recallable safety defect (Stricldand, 1996). The NHTSA investigation did not occur in a social vacuum. Strickland and his staff were chaged with evaluating the Pinto in the midst of national publicity that had already labeled its gas tank "defective" and accused the federal government (and NHTSA) of buckling to pressure from lobbyists for the auto industry (Dowie, 1977). Consumers also wrote letters to NHTSA demanding that it take action against Ford after Dowie's article was published (NHTSA, 1978). However, according to Strickland, NHTSA's evaluation revealed that the Pinto had a "fire threshold" (i.e. the speed at which a collision is likely to result in a fire) in rea-end collisions of between 30 and 35 miles per hour. Since the federal standard on fuel tank integrity (FMVSS 301, effective startg with 1977 model year cars) required that cars withstand only a 30 mile- per-hour rear impact, NHTSA would have to take extra-ordinary steps in order to force a recall of the Pinto (U.S. Department of Transportation, 1988).

Internal auditors' perceptions of whistle-blowing and the influence of moral reasoning: An experiment

Article

Jan 1991

Internal controls and fraud – empirical evidence from oil and gas company

Article

Oct 2016
J Financ Crime

Purpose The purpose of this study is to examine the type of internal control weaknesses and its impact that leads to fraud activities in an oil and gas company, which is rarely found in empirical research. Design/methodology/approach A case study approach was taken to investigate and analyse the fraud incidents to the deepest understanding. A mixed method of data collection, specifically document analysis and interviews, was used. Findings The study found that internal control weaknesses can be major contributing factors for fraud to be committed. Poor supervision and improper documentation process provide opportunity to misappropriate the assets, worst off if it includes several people that cooperate to conduct those illegal malpractices. Research limitations/implications The results provide further confirmation of the fraud triangle theory on the causes of the fraud, i.e. opportunity because of weak internal control. It also validates with many prior studies conducted by global professional firms such as KPMG, PricewaterhouseCoopers and Association of Certified Fraud Examiners on fraud and its related causes and implications. This study, however, was conducted on only one company with limited number of interviews. Practical implications This study provides some recommendations to improve weak internal control, which in turn will reduce opportunities of fraud committed in the company. Originality/value This study is original, as it focuses on a company that operates in the highly specialized industry, i.e. oil and gas, which is rare in fraud literature, particularly in developing markets such as Malaysia. It has examined various documents and reports of employee fraud that are generally difficult to be accessed by researchers to be finally published in an academic journal. The findings of this study are inferred from direct access of company documents that are private and confidential.

White-collar criminality

Article

Jan 1940
AM SOCIOL REV

E.H. Sutherland

Negotiating the waves: Challenges of conducting in-prison and follow-up research with women

Article

Jun 2003
AFFILIA J WOM SOC WO

This article discusses the challenges, benefits, and lessons learned in the trenches of constructing a collaborative study with women who are in and transitioning out of prison. It describes five areas for negotiating different cultures in the research enterprise: the funding sponsor, the correctional institution and its multiple facilities, the university and its procedures for protecting human participants, the inmates/ participants, and the communities to which the inmates return. Building trust and relationships across these multiple cultures is necessary to implement studies that can provide a foundation for developing restorative policies and practices.

The Heavy Electrical Equipment Antitrust Cases of 1961

Article

Jan 1995

G. Geis

Accounting irregularities and computer fraud

Article

Jan 1990

R. Doost

The three dimensions of fraud

Article

Jan 2008

H. Murdock

The Fraud Diamond: Considering the Four Elements of Fraud

Article

Dec 2004

Focuses on the use of the elements of the fraud diamond to prevent and detect accounting fraud. Essential traits for committing fraud; Steps in assessing fraud risk through the use of the fourth element of the diamond; Ways for auditors to prevent potential fraud.

Beyond the fraud triangle: Enhancing deterrence of economic crimes

Article

Jan 2010

Attitude, Machiavellianism and the rationalization of misreporting

Article

May 2012
ACCOUNT ORG SOC

P.R. Murphy

Audit standards around the world describe three factors, known together as the fraud triangle, that purportedly predict the likelihood of fraudulent financial reporting (IAASB, 2009; PCAOB, 2005). The first two factors, opportunity and incentive/pressure, are largely accepted as being associated with fraud (Erickson, Hanlon, & Maydew, 2004; Graham, Harvey, & Rajgopal, 2005; Wells, 2001), whereas the third factor, attitude/rationalization, remains a relative mystery (Hogan, Rezaee, Riley, & Velury, 2008; Wells, 2004). I conducted an experiment in which participants were provided the opportunity and motivation to misreport, in order to explore attitude and rationalization in greater detail. As expected, I found that participants whose attitude favors misreporting and individuals who are higher in Machiavellianism are both more likely to misreport; and participants who misreport experience negative emotions (affect). Of concern, however, is that higher Machiavellians who misreport feel significantly less guilt than others who misreport. When I changed the experimental setting and asked participants to think about common rationalizations they may use, in an attempt to reduce rationalizing before they made their reporting decision, significantly fewer participants misreported; while those who still misreported rationalized to an even greater extent. Implications for future research and fraud detection and prevention are discussed.

A procurement fraud risk management model

Article

Oct 2007

A.C. Venter

The high occurrence of procurement fraud requires the management of an enterprise, the risk manager of the enterprise and the internal auditor to address procurement fraud risks effectively within the enterprise risk management concept. The purpose of the article is to explain a procurement fraud risk management process which will serve as a comprehensive framework for enterprise risk managers and for internal auditors to limit the enterprise’s exposure to procurement fraud as far as possible. The study by Venter (2005) on which the article is based proposes a procurement fraud risk matrix which can be used to manage fraud risks within the procurement function efficiently. This matrix is based on the Committee of Supporting Organizations of the Treadway Commission’s (COSO’s) Enterprise Risk Management ‐Integrated Framework which is specifically applied to address the procurement fraud risk problem.

Corporate Governance Research in Accounting and Auditing: Insights, Practice Implications, and Future Research Directions

Article

Aug 2011

Over the past two decades, the corporate governance literature in accounting and auditing has grown rapidly. To better understand this body of work, we discuss 12 recent literature review or meta-analysis papers and summarize selected results (i.e., clusters of papers with new and interesting results) from recent empirical research papers, after reviewing the findings of over 250 studies. Our corporate governance focus is primarily on corporate board and audit committee issues. We discuss the major insights from this literature and the practice implications of these findings. In addition, we identify a number of opportunities for future research. In particular, we make suggestions for: (1) improved research paradigms in corporate governance, (2) extensions of existing research, and (3) new or emerging lines of research.

A Synthesis of Fraud-Related Research

Article

May 2013

We synthesize academic literature related to fraudulent financial reporting with dual purposes: (1) to better understand the nature and extent of the existing literature on financial reporting fraud, and (2) to highlight areas where there is need for future research. This project extends the work of Hogan et al. (2008), who completed a similar synthesis project, also sponsored by the Auditing Section of the American Accounting Association, in 2005. We synthesize the literature related to fraud by examining accounting and auditing literature post-Hogan et al. (2008) and by summarizing relevant fraud literature from outside of accounting. We review publications in accounting and related disciplines including criminology, ethics, finance, organizational behavior, psychology, and sociology. We synthesize the research around a model that illustrates the auditor's approach to fraud. The model incorporates auditors' use of the fraud triangle (i.e., management's incentive, attitude, and opportunity to commit fraud), their assessment of the existence and effectiveness of the client's anti-fraud measures (e.g., corporate governance mechanisms and internal controls), and their consideration of possible fraud schemes and concealment techniques when making an overall fraud risk assessment of the client. The model further illustrates how auditors can incorporate this assessment into an overall strategy to detect fraud by implementing appropriate fraud-detection procedures. We summarize the recent literature of each component of the model and suggest avenues for future research.

Ethics and the Tax Profession: Restoring the Public Interest Focus

Article

Dec 2010
Account Publ Interest

Tax practice is an integral component of the public accounting profession. Although accountancy as a profession embraces a strong public interest notion, there is an inevitable tension in tax practice between serving the client and maintaining the integrity of the tax system. Resolving this tension necessitates an ethics-infused judgment process. Ethical failures over the past decade have weakened the tax profession and called into question the extent to which practitioners in fact operate in a manner consistent with the public interest. In this paper, we explore the fundamental causes of the ethical problems that have plagued the tax profession and provide a roadmap for reform of the tax profession. Using Cressey's (1953) fraud triangle as a framework, we first examine the normative ideal for the tax profession. We then examine the recent tax shelter abuses perpetrated by the major public accounting firms and find results consistent with our expectations under the fraud triangle analysis. In essence, ethical breakdowns resulted from the loss of a public interest emphasis, which in turn led to the explicit pursuit of commercial gain at the expense of the public interest. That the frauds were perpetrated within the context of a profession founded on a public interest notion is particularly concerning. In response to the problems observed, we identify key cultural reforms needed within the accounting academy, the accounting profession, and the tax system in order to restore trust and the public interest character of the tax profession to center stage and so guard against further adverse outcomes.

Insights for Research and Practice: What We Learn about Fraud from Other Disciplines

Article

Dec 2014

SYNOPSIS We survey academic literature from non-accounting publications related to fraud and financial crimes: (1) to better understand the nature and extent of fraud acts from the perspective of non-accounting research; (2) to share with accounting researchers and practitioners ideas, theories, variables, constructs, and research designs used in other fields that might inform anti-fraud research and actions in accounting; and (3) to highlight opportunities for future research. This project extends the work of Hogan, Rezaee, Riley, and Velury (2008) and Trompeter, Carpenter, Desai, Jones, and Riley (2013) who completed fraud research synthesis projects in conjunction with the Auditing Section of the American Accounting Association for the Public Company Accounting Oversight Board (PCAOB). Our literature survey goes beyond immediate practice concerns and summarizes fraud-related literature that might inform research as well as practice in the future from approximately 30 journals in criminology, ethics, psychology, and sociology.

The American Street Gang: Its Nature, Prevalence, and Control.

Article

Jul 1996
CONTEMP SOCIOL

Corruption and fraud: any lessons for the auditor?

Article

Apr 2006

The Prevention and Combating of Corrupt Activities Act, Act 12 of 2004, was instituted to curb corrupt activities. It imposes a duty on people in positions of authority to report corrupt or suspected corrupt activities and related activities. However, auditors are not listed in this Act as persons in a position of authority. This article discusses whether, despite the fact that the Prevention and Combating of Corrupt Activities Act does not place such a reporting duty on an auditor, auditors nevertheless have a duty in terms of other legislation to report any unlawful activities that they uncover in the course of their work, or which they suspect to have been committed. The article also examines whether auditors are required to consider the risk of corruption.

White Collar Crime

Article

Apr 1950
AM SOCIOL REV

Blowing the Whistle: The Organizational and Legal Implications for Companies and Employees.

Article

Dec 1993
ADMIN SCI QUART

Foundations of Social Theory

Article

Mar 1991

Why Business Men Violate the Law

Article

Jul 1953

Robert E. Lane

A Better Statutory Approach to Whistle-Blowing

Article

Jan 1997

Statutory approaches toward whistle-blowing currently appear to be based on the assumption that most observers of wrongdoing will report it unless deterred from doing so by fear of retaliation. Yet our review of research from studies of whistle-blowing behavior suggests that this assumption is unwarranted. We propose that an alternative legislative approach would prove more successful in encouraging valid whistle-blowing and describe a model for such legislation that would increase self-monitoring of ethical behavior by organizations, with obvious benefits to society at large. A defense contractor’s inspectors used improper calibration standards when inspecting missile parts and other military products, used noncertified inspectors when inspecting such products, and used employees without top-secret clearance to work on classified projects. This created potentially life-threatening products as well as potential compromises of military secrets. Quality-control officials on the Trans Alaska Pipeline were threatened with physical harm, demoted, and spied on in an effort to force them not to turn in negative reports or report problems. As a result, the likelihood of damaging oil spills due to improperly built and maintained equipment is heightened. A major corporation allegedly initiated an analysis of the cost savings that would result from circumventing or reducing compliance with health, safety and environmental standards. Two officers who objected to this noncompliance cost/benefit analysis were subsequently fired.

Beyond the fraud triangle

Article

Jul 2010

ABSTRACT The article investigates the reason for and prevention of corporate fraud triangle, the convergence of perceived pressure, perceived opportunity and rationalization to facilitate fraud in the U.S. A study by Donald Cressey is cited, which focused on the circumstances persuading people to initially violate ethical standards and to commit their first fraudulent act. The characteristics of people who commit fraud are mentioned. A summary of fraud triangle and model extensions is also provided.

SOX and whistleblowing

Article

Jun 2007
MICH LAW REV

Terry Morehead Dworkin

The language of the Sarbanes-Oxley Act ("SOX") leaves no doubt that Congress intended whistleblowing to be an integral part of its enforcement mechanisms. The Act attempts to encourage and protect whistleblowers in a variety of ways, including providing for anonymous whistleblowing, es-tablishing criminal penalties for retaliation against whistleblowers, and clearly defining whistleblowing channels. Unfortunately, these provisions give the illusion of protection for whistleblowers without effectively provid-ing it. There is increasing evidence that virtually no whistleblower who has suffered retaliation and pursued remedies under SOX has been successful. Additionally, social science research and studies of whistleblowing laws indicate that SOX is unlikely to increase reports. This Article compares the SOX whistleblowing provisions with other state and federal whistleblowing statutes, discusses the shortcomings of the SOX provisions, and explains why SOX needs to be revised in order to help ensure the integrity of the markets. Recommended revisions include signifi-cantly rewarding whistleblowers that come forward with novel and relevant information. Experience with the False Claims Act and equivalent state stat-utes show such incentive legislation to be the only truly effective legislative model. The Article goes on to discuss various ways to create an incentive reward fund. While some of the current law as well as some of the suggested revisions potentially put SOX in conflict with privacy and whistleblowing laws of European countries, the conflicts can be eliminated through judi-cious use of exemptions and/or through judicial interpretation.

The Evolution of Fraud Theory

Article

May 2012
Issues Account Educ

This paper revisits the Fraud Triangle, highlighting recent findings and contemporary thinking in the anti-fraud community to develop a meta-model of fraud for use in accounting instruction and research. The importance of the Fraud Triangle is particularly important as a model for assessing the risk of fraud, but it is only one component of an overall audit risk assessment plan. Explicit reference to the auditor's responsibility in identifying the risks of material misstatement arising from fraud is included in the guidance provided by both the AICPA and PCAOB (2010). Identifying fraud risk is a significant element of assurance services, and necessitates a model reflecting the current thinking surrounding the fraud event. To enhance our understanding of the fraudster's motivations and improve the anti-fraud community's ability to prevent, deter, detect, investigate, and remediate fraud, researchers and practitioners have offered insights beyond the Fraud Triangle. These insights are summarized in this manuscript and presented in a meta-model, providing a foundational resource for educators and researchers pursuing the study of fraud. Key aspects of the meta-model include instructional benefits in the classroom and an empirical approach from a research standpoint.

Could the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 be Helpful in Reforming Corporate America? An Investigation on Financial Bounties and Whistle-Blowing Behaviors in the Private Sector

Article

Feb 2013

The purpose of this study is to investigate whether the availability of financial bounties and anonymous reporting channels impact individuals’ general reporting intentions of questionable acts and whether the availability of financial bounties will prompt people to reveal their identities. The recent passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 creates a financial bounty for whistle-blowers. In addition, SOX requires companies to provide employees with an anonymous reporting channel option. It is unclear of the effect of these provisions as they relate to whistle-blowing. Our results indicate that a financial bounty has the potential to increase participants’ propensity to report questionable acts and their willingness to reveal their identities when reporting, but the availability of an anonymous reporting channel does not affect participants’ propensity to report questionable acts. These findings could potentially help corporate management, government policy makers and accounting researchers to assess the effectiveness of their internal compliance programs and help determine if financial bounties in the private sector could encourage whistle-blowing.

The Influence of the Institutional Context on Corporate Illegality

Article

Feb 2013
ACCOUNT ORG SOC

This paper examines the relationship between the institutional environment and sustained corporate illegality. We find that cognitive assumptions generate expectations that can, under specific circumstances, induce organizations to amplify illegal actions and that serve to lessen regulatory scrutiny. We also find that, once initiated, illegal actions can become hidden because of institutionalized practices that enable their concealment and that weaken the prospect of detection. These processes and effects are particularly noticeable in networks of professional regulators who become mutually over-confident and over-influenced by each other to the extent that their independent critical assessments and judgements are compromised. Mechanisms of mimetic herding and social humiliation compromise independence of judgement. Networks of interacting professionals are thus vulnerable to a collectively induced lowering of regulatory vigilance.

In Our Ivory Towers? The Research-Practice Gap in Management Accounting: An Academic Perspective

Article

Aug 2012
ACCOUNT BUS RES

Motivated by repeated observations in the management accounting literature concerning the relevance of academic research to policy and practice communities, this study reports on an exploratory investigation of the perceptions and attitudes of a sample of 64 senior management accounting academics from 55 universities in 14 countries about the extent to which academic management accounting research does, and should inform practice. Drawing on Diffusion of Innovations theory as a point of departure, and based on evidence obtained from a questionnaire survey and subsequent interviews, our findings reveal the prevalence of two broad schools of thought. One school, represented by the majority of senior academics, and which we have identified as, the ‘majority view’, holds there is a significant and widening ‘gap’ between academic research and the practice of management accounting, and that this gap is of considerable concern. In contrast, the other school, which we identify as ‘the minority view’, holds that a divide between academic management accounting research and practice is appropriate, and that efforts to bridge this divide are unnecessary, untenable or irrelevant. From this empirical evidence, we advance a conceptual framework distinguishing between the ‘means’ and ‘ends’ of academic research which enables these two opposing schools to be located relative to each other. On the basis of this framework, we contend that framing the relationship between academic research and practice as a ‘gap’ is potentially an oversimplification, and directs attention away from the broader but fundamental question of the role and societal relevance of academic research in management accounting.

Public Notification Campaigns in Mass Litigation: The Dalkon Shield Case

Article

May 1988
JUSTICE SYST J

Herbert M. Kritzer

A major issue in many mass litigation cases is how to notify interested parties of their right to file claims against the alleged defendant(s), a problem that arises not only in class action cases, but also in actions consolidated through the multidistrict litigation procedure in the federal courts and in cases in which a defendant has filed for protection under the federal bankruptcy act. In this paper I discuss some of the general issues involved in notification, and report on a pair of surveys that provide some insight into how a large scale public notification campaign worked in the Dalkon Shield litigation. The evidence from the surveys suggests that the notification campaign served to activate a largely preexisting awareness of the alleged hazards of the Shield rather than to educate the public concerning the existence of those hazards. These findings raise questions about how a public notification campaign modeled after that used in the this case might work if the level of public awareness was very low at the time the campaign was conducted.

CO-OFFENDING as social exchange - Explaining characteristics of co-offending

Article

Mar 2003

Frank M. Weerman

Studies in the past have already revealed some interesting characteristics of co-offending, but relatively little attention has been paid to explaining them. This paper is focused on the explanation of these characteristics. A comprehensive theory is proposed, based on the idea that co-offending may be viewed as an event in which material and immaterial goods are exchanged. The basic concepts of such a social exchange theory are formulated in this article, and a causal model based on this theory is deduced. The paper also shows how the proposed theory may explain the well-known characteristics of co-offending.

The Art of Fieldwork

Article

Jan 1995

Harry F. Wolcott

Field Research in Management Accounting and Control: A Review and Evaluation

Article

Dec 1992
Account Audit Account J

Surveys the field research literature in management accounting and control (MAC) published in the period 1984-1992. Proposes a definition of field research and compares the 82 published works that meet this definition with respect to their motivations, research designs and presentation formats. The comparison reveals the tremendous diversity among the field research publications. Evaluates the methods and contributions of this research - field researchers usually choose interesting, relevant topics but many of the works have weaknesses in research design, data presentation and interpretation of findings. Concludes with some observations on the costs, risks, and potential payoffs of field research.

Breaking in: Gaining entry to prisons and other hard-to-access criminal justice organizations

Article

Nov 2004

There exists a large body of literature on doing research with hard-to-access populations such as the mentally ill, gang members, prison inmates, correctional officers, and wardens. There is little discussion, however, on getting access to criminal justice organizations in the first place. This article offers several practical suggestions for “breaking in” to prisons and other criminal justice organizations. This article emphasizes getting access to agency-collected data.

Casino gambling and workplace fraud: A cautionary tale for managers

Article

Mar 2010

Purpose The purpose of this paper is to examine notable instances of fraud that have occurred in Southeastern Connecticut and surrounding areas since the development of two large casinos in that region. Design/methodology/approach Fraud case histories and prosecutions in which the gambling actions of individuals provided the incentive or pressure for the fraud to occur are examined. Findings A number of employees who work in business and government have stolen significant sums of money to support gambling activities. The cases are linked to the growth of casino gambling and an accompanying increase in pathological and problem gambling; which research indicates doubles within 50 miles of a casino. Consistent with prior research, most of the thefts were not discovered by auditors or management in a timely manner. Research limitations/implications This paper examines the impact of fraud due to casino gambling in one region, further research will examine other regions. One limitation in the research process is the reluctance of businesses to report instances of fraud, thus resulting in an underreporting of the extent of the problem. Practical implications The paper recommends actions to be taken by managers in casino areas that can prevent employees from committing such fraud. These actions include the establishment of internal audit procedures, use of an external auditor for specific internal control tasks, upper management review of certain key business documents, increased accountability for organizational check registers, improved control for incoming cash receipts, and fraud awareness training. Originality/value Managers in casino regions that become aware of the risks and employ the recommended measures may prevent and minimize business fraud.

Social Exchange Theory

Article