Does Humble CEO Bring Humble Organizational Behavior?: The Effect of CEO Humility on Accounting Fraud Triangle

2019 ◽  
Vol 23 (2) ◽  
pp. 63-96
Author(s):  
Jahyeon Choi ◽  
Choelsoon Park ◽  
Sung Min Hong
Keyword(s):  
Organizational Behavior ◽  
Fraud Triangle ◽  
Accounting Fraud

A Synthesis of Fraud-Related Research

2012 ◽  
Vol 32 (Supplement 1) ◽  
pp. 287-321 ◽  
Author(s):  
Gregory M. Trompeter ◽  
Tina D. Carpenter ◽  
Naman Desai ◽  
Keith L. Jones ◽  
Richard A. Riley
Keyword(s):  
Organizational Behavior ◽  
Financial Reporting ◽  
Recent Literature ◽  
Internal Controls ◽  
Future Research ◽  
Fraud Triangle ◽  
Fraudulent Financial Reporting ◽  
Academic Literature ◽  
Fraud Risk ◽  
Corporate Governance Mechanisms

SUMMARY 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.

Modeling Accountant Whistleblowing Intentions: Applying the Theory of Planned Behavior and the Fraud Triangle

2016 ◽  
Vol 16 (1) ◽  
pp. 28-56 ◽  
Author(s):  
J. Owen Brown ◽  
Jerry Hays ◽  
Martin T. Stuebs
Keyword(s):  
Theory Of Planned Behavior ◽  
Planned Behavior ◽  
Theory Development ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Management Level ◽  
The Public ◽  
Attitudes And Perceptions ◽  
Material Accounting ◽  
Whistleblowing Intention

ABSTRACT Accounting fraud represents a severe threat to the public interest, and whistleblowing remains the most effective fraud discovery mechanism. In this research, we integrate the theory of planned behavior with the fraud triangle to organize prior whistleblowing literature and model the intention of professional accountants to blow the whistle on a material accounting fraud. The results, based on responses from 284 professional organizational accountants, support our theory development and indicate that attitudes and perceptions of control over whistleblowing are positively related to whistleblowing intention. In supplemental analyses, we also find that gender and management level are significantly associated with whistleblowing intent. Our results provide evidence for using our integrated theoretical model to explain and predict the reporting intention of corporate accountants. Findings should aid organizations and regulators seeking to improve corporate ethical culture and aid governance researchers in their understanding of the complex environmental and individual factors impacting whistleblowing intent.

When collusion meets the fraud triangle: a case study approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Núria Villaescusa ◽  
Oriol Amat
Keyword(s):  
Ad Hoc ◽  
Case Study Research ◽  
Point Of View ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Content Type ◽  
Study Approach ◽  
Limited Perspective ◽  
Unexplored Area

Purpose The purpose of this paper is to explore how the different elements of the fraud triangle are present in a case of convicted accounting fraud in collusion. Design/methodology/approach This is a case study research. Findings The authors find that when a fraud is carried out in collaboration of several internal and external members of the company, the view of the fraud triangle as an explanation of the fraud from a heuristic point of view is a very limited perspective of the fraud as an opportunity has been designed ad hoc for the fraud commission. Originality/value Although there is a vast research on accounting fraud, collusion fraud is still an unexplored area. This study gives light on how a real case of fraud is perpetrated.

Accounting fraud before codification: An inquiry on budget misstatements in eighteenth-century Venice

2021 ◽  
pp. 103237322198945
Author(s):  
Marisa Agostini ◽  
Riccardo Cella ◽  
Giovanni Favero
Keyword(s):  
Eighteenth Century ◽  
Accounting Information ◽  
Exceptional Case ◽  
Financial Fraud ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Late Eighteenth Century ◽  
Technical Possibility ◽  
Ceramic Manufacturing

The article focuses on the understudied role of accounting information in financial fraud in pre-modern historical contexts where specific regulations and standards were absent. Following a systematic literature review, the authors adopt an enriched version of the ‘fraud triangle’ to correctly identify fraud in such a setting. A microhistorical approach allows them to identify an exceptional case documenting the use of accounting statements to disclose a financial fraud in a ceramic manufacturing partnership in late eighteenth-century Venice. The case is analysed to identify the role of accounting information in determining the purpose (incentive), the technical possibility (opportunity) and the consequences (rationalisation) of the fraud. The results emphasise the authorities’ use of accounting statements to assess the situation of the company and fix its crisis, rather than to sanction fraudulent behaviours.

scholarly journals The determinants of accounting fraud tendency

2017 ◽  
Vol 6 (1) ◽  
pp. 99
Author(s):  
Predita Arie Ayu Putri ◽  
Soni Agus Irwandi
Keyword(s):  
Information Asymmetry ◽  
Internal Control ◽  
Compensation System ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Linear Regression Models ◽  
Control Effectiveness ◽  
System Suitability ◽  
Accounting Rules ◽  
Spss Software

This study aims to retest the effect of internal control effectiveness, compensation system suitability, and information asymmetry, adherence to accounting rules, and management morality on accounting fraud tendency. This study uses agency theory and fraud triangle as a grand theory. This study was conducted in 19 companies in Surabaya with 79 managers as respondents. The data were analyzed using multiple linear regression models with SPSS software. The results show that internal control effectiveness, compensation system suitability, information asymmetry, adherence to accounting rules, and management morality have a significant effect on accounting fraud tendency.

Broadening the Fraud Triangle: Instrumental Climate and Fraud

2015 ◽  
Vol 28 (1) ◽  
pp. 41-56 ◽  
Author(s):  
Pamela R. Murphy ◽  
Clinton Free
Keyword(s):  
Organizational Behavior ◽  
Organizational Climate ◽  
Work Environment ◽  
Social Dimension ◽  
Best Interests ◽  
Fraud Triangle ◽  
Ethical Concerns ◽  
Social Incentives ◽  
Respondent Group

ABSTRACT 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 pro-organizational behavior. Our results suggest that fraud has an important social dimension that is largely neglected by current fraud triangle interpretations.

scholarly journals Pengendalian Internal, Budaya Organisasi, dan Kecenderungan Kecurangan Akuntansi di LPD Kabupaten Tabanan

2020 ◽  
Vol 30 (11) ◽  
pp. 2907
Author(s):  
Ni Luh Gede Dandy Adi Pratiwi ◽  
I Gusti Ayu Nyoman Budiasih
Keyword(s):  
Organizational Culture ◽  
Data Analysis ◽  
Linear Regression ◽  
Internal Control ◽  
Theoretical Implication ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Analysis Technique ◽  
Practical Research ◽  
Research Implication

This study aims to obtain empirical evidence regarding the influence of internal control and organizational culture on the tendency of accounting fraud in LPD Tabanan Regency. Tabanan Regency LPD was chosen in this study because of the phenomenon of fraud that occurred in several Tabanan Regency LPDs. Multiple linear regression is a data analysis technique used in this study. The results show that internal control and organizational culture negatively affect the tendency of accounting fraud in Tabanan Village Credit Institutions. This research can support the theory of fraud triangle as a theoretical implication of research. This research can provide input to improve internal control, organizational culture and reduce fraud committed by internal LPD parties as a practical research implication. Keywords: Tendency of Accounting Fraud; Internal Control; Organizational Culture.

scholarly journals Revisiting the Accounting Fraud Components: A Bottom-Up Approach Using the Twitter Platform

SAGE Open ◽  
2021 ◽  
Vol 11 (4) ◽  
pp. 215824402110581
Author(s):  
Roberto Tommasetti ◽  
Rodrigo de Oliveira Leite ◽  
Vinicius Mothé Maia ◽  
Marcelo Alvaro da Silva Macedo
Keyword(s):  
Social Media ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Web Crawler ◽  
Top Down ◽  
Online Data ◽  
Bottom Up ◽  
Twitter Users ◽  
Main Components

Despite the relevant economic and reputational impact of fraud, research in this field remains fragmented. This study aims to create a new framework for accounting fraud, defining its main components from the social media user’s perspective. In terms of research technique, an online data collection using social media platform was used retrieving, through the phyton web crawler procedure, 43,655 tweets containing the phrase “accounting fraud” from July 2006 to December 2019. Individual words were identified and treated within the selected tweets, excluding stop words and, finally, using a sparsity index. The proposed methodology, which overcomes traditional survey inherent bias efficiently, contributes to bridging the divide between academia and society. We find that Twitter users shape the Accounting Fraud Hexagon, composed by (i) The Object and the Tool (of misrepresentation), being the Financials, (ii) The (Guilty) Fraudster, (iii) The Defrauded, (iv) Materiality, (v) The Consequences, and (vi) the Watchdog. Our research has several implications. Our research identifies additional “angles” of vision to the traditional fraud triangle-diamond-pentagon theories compared with the existing top-down conceptual frameworks. Also, since it uses a bottom-up instead of a top-down approach, the study allows a more comprehensive definition of accounting fraud, thus contributing to the debate for a common language in this field. We expect to encourage more research using social media as a tool to test the literature built on in vitro theories empirically.

Accounting Fraud at CIT Computer Leasing Group, Inc.

2011 ◽  
Vol 26 (3) ◽  
pp. 569-591 ◽  
Author(s):  
Jeffrey E. Michelman ◽  
Victoria Gorman ◽  
Gregory M. Trompeter
Keyword(s):  
Law Enforcement ◽  
Internal Control ◽  
Accounting Information ◽  
Internal Controls ◽  
Fraud Triangle ◽  
Accounting Fraud ◽  
Internal Auditing ◽  
Accounting Information Systems ◽  
Forensic Accounting ◽  
Florida Department

ABSTRACT The case chronicles a newly promoted manager's search to uncover an inventory fraud that had been perpetrated by her supervisor at CIT, a publicly held company. During the ensuing investigation, CIT and the Florida Department of Law Enforcement identified 36 different transactions involving the diversion of nearly 2,500 computers, with a conservative estimated total loss to the company of $637,000. Students are also exposed to the importance of internal controls, red flags, the fraud triangle, and forensic accounting techniques. The case also lets the reader see what occurs when, due to management override of internal control, a subordinate no longer trusts a supervisor's communicated information. This can be used at the undergraduate or graduate level in an Accounting Information Systems, Internal Auditing, or Auditing or Fraud/Forensic Accounting class. The Teaching Notes also have an accompanying video, in which the investigators and prosecutor discuss issues related to the case, including the specifics of the case, whistleblowers, and the fraud triangle, and the roles of law enforcement and the judiciary. Included in the video are interviews with the Florida Department of Law Enforcement investigators and the prosecuting attorney that were involved in the CIT case.

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