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1
Ahn, Jae Hwan. "Three essays on accounting fraud." Thesis, University of Warwick, 2018. http://wrap.warwick.ac.uk/108524/.
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This thesis consists of three empirical papers that investigate the impacts of equity incentives on accounting fraud from the perspective of the risk it presents for CEOs and controlling shareholders. As a prerequisite for this thesis, the first paper investigates whether AAERs constitute a reliable accounting fraud database, despite their partial coverage of misreporting cases and the resource constraints of the SEC. Using comprehensive samples covering three financial misreporting databases from the U.S., I find that, compared to securities class action lawsuits and restatements, AAERs are composed of firms that are more likely to represent material accounting irregularities, which are characterised by aggressive adoption of accruals, strong financing needs, and significant market impact of misreporting cases. The second paper investigates whether CEOs change their misreporting behaviours at higher levels of equity incentives, at which they may begin to seriously consider the risk side of incentives. Using both unmatched and matched accounting fraud samples from the U.S., I find that, contrary to misreporting patterns at average equity incentives, CEOs’ option delta is negatively associated with accounting fraud propensity, whereas their stock ownership is positively related to this at respectively higher levels. The third paper examines the extent to which, in the context of accounting fraud, controlling shareholders’ control-ownership wedge interacts with their ownership concentration - a common feature of business groups - and with the additional imposition of government regulation on Korean chaebols. Using matched samples from Korea, I find that control-ownership wedge is positively associated with accounting fraud propensity, whereas business group and chaebol affiliations are not. Overall, the results suggest that the impacts of equity incentives on accounting fraud propensity hinge critically on how CEOs and controlling shareholders perceive the risk of accounting fraud commitment.
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Mock, Justin. "“Classic Case Studies in Accounting Fraud”." Miami University Honors Theses / OhioLINK, 2004. http://rave.ohiolink.edu/etdc/view?acc_num=muhonors1111004894.
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Grant, Taniesha Michelle. "Leadership Strategies for Combating Medicare Fraud." ScholarWorks, 2017. https://scholarworks.waldenu.edu/dissertations/4446.
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Healthcare fraud is threatening the economic stability of the U.S. healthcare system and negatively affecting organizational costs. Financial losses from healthcare fraud account for approximately $80 billion per year of the $2.4 trillion healthcare budget. Leadership strategies that may aid in combating Medicare fraud were explored in this qualitative single case study. The criminal violation of trust theory guided the study as it provides healthcare leaders with an understanding of the portion of the fraud triangle over which they have the most control to combat fraud: the opportunity to commit fraud. Data were gathered from review of publically available documents and information received from 10 semistructured interviews with health care leaders in the Mid-Atlantic area of the United States who have the responsibility of overseeing, developing, monitoring, or implementing control mechanisms for Medicare services. Yin's 5-step data analysis process and thematic analysis were used to analyze the data. Three key themes emerged from the study: an effective control environment, an adequate accounting system, and adequate control procedures. Health care leaders in the study recognized that the control environment plays a crucial role on the integrity and ethical values of its employees. The health care leaders acknowledged that an effective accounting system ensures Medicare funds are properly tracked and accounted for. Health care leaders also shared that adequate control procedures aid in deterring fraud and provide reasonable assurance that leaders meet the fiscal and programmatic objectives of the Medicare program. Social implications include reducing healthcare costs for U.S. citizens and creating control strategies that may contribute to a healthcare system to lead to a healthier citizenry.
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Riccio, Marisa A. "Fraud and ethics in the accounting profession /." Staten Island, N.Y. : [s.n.], 2005. http://library.wagner.edu/theses/business/2005/thesis_bus_2005_ricci_fraud.pdf.
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Yau, Kin-pong Harry. "The role of accountants in fraud detection." Click to view the E-thesis via HKUTO, 2000. http://sunzi.lib.hku.hk/hkuto/record/B42575552.
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Shelton, Austin M. "Analysis of Capabilities Attributed to the Fraud Diamond." Digital Commons @ East Tennessee State University, 2014. https://dc.etsu.edu/honors/213.
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In the thesis “Analysis of Capabilities Attributed to the Fraud Diamond” research was conducted on fraud and what it takes for a person to commit fraud. The focus of this study was on one aspect of the person committing fraud, the capabilities aspect. This aspect is rather new in the accounting world, being first introduced in 2004. There was an analysis conducted on the six attributes of capabilities.
The six attributes went through statistical testing. This testing was to determine whether there are significant differences between the attributes. Based on the results of the testing, recommendations were given. These recommendations were directed towards companies and managers of the companies based on the attributes.
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Haynes, Allyn H. "Detecting Fraud in Bankrupt Municipalities Using Benford's Law." Scholarship @ Claremont, 2012. http://scholarship.claremont.edu/scripps_theses/42.
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This thesis explores if fraud or mismanagement in municipal governments can be diagnosed or detected in advance of their bankruptcies by financial statement analysis using Benford’s Law. Benford’s Law essentially states that the distribution of first digits from real world observations would not be uniform, but instead follow a trend where numbers with lower first digits (1, 2…) occur more frequently than those with higher first digits (…8,9). If a data set does not follow Benford’s distribution, it is likely that the data has been manipulated. This widespread phenomenon has been used as a tool to detect anomalies in data sets. The annual financial statements of Jefferson County, Vallejo City, and Orange County were analyzed. All the data sets showed overall nonconformity to Benford’s Law and therefore indicated that there was the possibility of fraud occurring. I find that Benford’s Law, had it been applied in real time to those financial statements, would have been able to detect that something was amiss. That would have been very useful because each of those jurisdictions subsequently went bankrupt. This paper demonstrates that Benford’s Law may in some cases be useful as an early indicator to detect the possibility of fraud in municipal governments’ financial data.
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Noh, Suzie. "An exploration of two accounting-based models for earnings misstatements and their implications for stock returns." Thesis, Massachusetts Institute of Technology, 2014. http://hdl.handle.net/1721.1/90228.
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Thesis: M. Fin., Massachusetts Institute of Technology, Sloan School of Management, Master of Finance Program, 2014.<br>Cataloged from PDF version of thesis.<br>Includes bibliographical references (pages 56-59).<br>Using two popular accounting-based models for earnings manipulation (i.e., the Beneish M-Score and the Dechow F-Score) and the financial data of public companies from 2004 to 2012, 1 find that the M-Score (F-Score) predicts less (more) earnings overstatements during the recent financial crisis in 2007-2008 than other sample years. However, a detailed investigation at the industry level reveals that this does not hold in all industries. I further show that the potential misstating firms flagged by the M-Score tend to under-perform the market both at the aggregate and the industry level, and some of those flagged by the F-Score under-perform at the industry level. Finally, by running Fama-French three-factor regressions at the aggregate level, I provide evidence that the firms flagged by the MScore generally yield negative risk-adjusted stock returns. The evidence suggests public availability of financial statements alone does not ensure that all the elements of financial statements are fully integrated into prices in a timely manner. Overall, this study provides substantial support for the use of quantitative accounting analysis in equity trading.<br>by Suzie Noh.<br>M. Fin.
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Pei, Chris M. "Earnings Management and Accounting Fraud: Examining the Necessity of Regulation." Scholarship @ Claremont, 2013. http://scholarship.claremont.edu/cmc_theses/777.
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Earnings management and accounting fraud are detrimental to the integrity of financial reporting, and more worryingly, are pervasive. Furthermore, there is often a grey area in which individuals regularly question whether or not specified accounting methods are strictly legal and permitted, or an underhanded abuse of GAAP-granted flexibility. In response, recently there has been an uprising of legislation attempting to curb the incidence of both these events, but there is still question as to whether or not these attempts are effective, or even wholly necessary. This piece examines methods of accounting manipulation through an analysis of cases, and then analyzes the effects on companies of attempts at both regulation and prevention.
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Zimbelman, Mark Foster 1959. "Assessing the risk of fraud in audit planning." Diss., The University of Arizona, 1996. http://hdl.handle.net/10150/290605.
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The ASB recently proposed that auditors explicitly assess fraud risk and document their planned response to the level of fraud risk. Researchers and practitioners have recommended that auditors perform separate risk assessments for intentional misstatements (e.g., management fraud) and unintentional misstatements (e.g., errors) in order to improve auditors' ability to detect fraud. This study examines the effects of this requirement on auditors' planning decisions. In comparison with auditors who make combined inherent risk assessments, auditors who make a separate inherent risk assessment are expected to spend more time attending to fraud cues and react to changes in fraud risk indicators more readily. Additionally, auditors who make separate risk assessments are expected to report less confidence in their fraud risk assessment when compared to their error risk assessment due to the difficulty of interpreting the implications of strategic behavior. A computerized test instrument monitored auditors' time attending to fraud cues. Four versions of the software manipulated, between subjects, the type of inherent risk assessment required (i.e., separate assessments for intentional and unintentional misstatements or a combined assessment) and the indicators of fraud risk in an audit case (i.e. 'low' or 'high' fraud risk). Auditors' planning decisions are used to measure their response to the indicators of fraud risk. Evidence of the effects of performing a separate fraud risk assessment may provide policy makers with information to evaluate the economics of the ASB's proposed policy change. Data analyses indicate that auditors who separately assessed fraud risk used significantly more time attending to the fraud cues. Additionally, the group who separately assessed fraud risk budgeted significantly more hours for the case that indicated higher fraud risk than the lower fraud risk case while the other group reported no significant difference in planned hours. Analyses of audit procedure selections revealed no significant differences between groups suggesting that auditors do not modify the nature of their audit tests as a response to perceived fraud risk. Finally, comparisons of auditors' confidence in their risk assessments showed that they were significantly less confident in their fraud risk assessment than in their error risk assessment.
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An, Tingting. "Case study on accounting fraud of U.S.-listed Chinese companies." Thesis, Massachusetts Institute of Technology, 2014. http://hdl.handle.net/1721.1/90232.
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Thesis: S.M. in Management Studies, Massachusetts Institute of Technology, Sloan School of Management, 2014.<br>65<br>Cataloged from PDF version of thesis.<br>Includes bibliographical references (pages 74-78).<br>During the period from 2009 to 2013, 76 out of 848 U.S. federal securities class action litigations were against Chinese companies listed in U.S. markets. The U.S. Securities and Exchange Commission (SEC) has also initiated more and more investigations into accounting fraud of U.S.-listed Chinese companies during recent years. This paper seeks answers to the following questions: what kinds of accounting fraud are those companies usually involved with? How did they commit such fraud? Are there any common indications that we could identify from those companies and could be used as red flags for accounting fraud? Using a case-study method, I analyze three Chinese companies: RINO International Corporation, Universal Travel Group, and ShengdaTech, Inc. I explore management issues and the various means that these three companies used in their fraudulent behaviors. The major part of this paper comprises three case studies, each of which includes a brief introduction of company background and industry and business discussion, followed by analysis of key management and accounting issues. Together with evidence and clues from other companies, I identify three major sets of characteristics that emerged in my study of these companies involved in accounting fraud, including: 1) low integrity of higher management, weak corporate governance, and internal control deficiencies; 2) suspicious corporate transactions and potential mechanics of how fraud was committed, including overstated revenues, unusually high cash balances and accounts receivable balances, abnormally higher gross profit margins or lower expenses, and undisclosed related party transactions; and 3) external warning signals from auditors and from inconsistent numbers between SEC filings and filings to Chinese regulators.<br>by Tingting An.<br>S.M. in Management Studies
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Perez, Juan E. II. "Executive Compensation and Fraud: Trends in Executive Pay Mix and Company's Increased Exposure to Fraud." Scholarship @ Claremont, 2017. http://scholarship.claremont.edu/cmc_theses/1469.
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After the Great Recession of 2007 there was a spotlight on executive compensation. The magnitude and structure of executive pay became an area of concern to the public. As a result, company management across all sectors had to find a way to offer competitive compensation plans that aligned the interest of shareholders with that of executives. The outcome was an increased focus on tying executive pay to company performance. The level of fixed-pay incorporated into target compensation began to decreases rapidly and was replaced by “at-risk” compensation. For some, this was a major achievement in the world of executive compensation, however, others view this change as potentially dangerous. I chose to analyze the pay-mix structure and annual incentive plans of a group of bellwether companies to see if this transition is increasing company’s exposure to fraud. In this essay I attempt to tie increases in at-risk pay to increases in fraud risk, while identifying incentive goals affected by common fraud practices.
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Jones, Keith Lamar. "Improving fraud risk assessments through analytical procedures." Diss., The University of Arizona, 2004. http://hdl.handle.net/10150/280556.
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This study incorporates concepts from accounting and criminology literatures to develop a model of financial statement variables that provides researchers and auditors with information about the likelihood of fraudulent financial reporting. This study is also one of the first to test whether the predictive ability of fraud indicators has changed over time. Game theory suggests that if fraud firms consistently manifest similar characteristics then auditors will isolate those fraud indicators and react to them. The results show that accruals, market-to-book ratio, and lack of a Big Four auditor are the most influential fraud risk indicators. Fraud firms generally have higher abnormal market returns in the year of the fraud and larger market-to-book ratios compared to nonfraud firms. This finding suggests that managers who commit fraud generally attempt to preempt bad earnings news rather than react to bad news in the form of low company stock price. The results do not suggest a fundamental shift in fraud risk indicators. However, while the lack of a Big Four auditor was not significant in the 1970's and 1980's, it was significant in the 1990's. Fraud firms in the 1970's and 1980's appear to have more debt relative to the industry but are not more profitable. Frauds in the 1990's appear to be more profitable relative to the industry but do not have more debt. This finding may be due to more stock options and other performance-based incentives in the 1990's and a greater emphasis on beating analysts' expectations.
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Killen, Karen L. "Ratio of Income Tax Expense to Operating Income as an Indicator of Fraud." Thesis, Northcentral University, 2016. http://pqdtopen.proquest.com/#viewpdf?dispub=10105357.
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<p> Financial statement fraud is so prevalent that the American Institute of Certified Public Accountants (AICPA) and the Securities and Exchange Commission (SEC) both issued guidelines dealing with revenue recognition specifically because the majority of financial statement fraud involves overstating revenue. The specific problem addressed by this study was that although there are analytical procedures used throughout the audit process, only 10% - 12% of detected frauds are found using this method. Research has shown that companies with large differences between reported net income and taxable income showed among other things, fraudulently overstated earnings compared to companies with average differences. The study examined how income tax expense related to operating income, which included all revenue less expenses but before income taxes payable; and, whether the ratio of income tax expense to operating income differs for public companies with and without detected financial statement fraud. The full census sample included examination of fraud firms and non-fraud firms for all cases occurring between the years 1993 and 2005. The data was analyzed using descriptive statistics including measurements of central tendency and variability and inferential statistics including z-scores and Pearson’s correlation coefficient. The results indicated that there is a relationship between non-fraud income tax expense and income before income taxes r = .996, N = 332, (p < .01), two tails, and for fraud firms, there is a correlation between income tax expense and income before income taxes r = .963, N = 386, (p < .01), two tails. This research also indicates that a correlation exists for non-fraud firms between income tax expense and operating income, r = .702, N = 196, (p < .01), two tails and for fraud firms r = .842, N = 386, (p < .01), two tails. Finally, the results also indicate there may be a significant correlation between the ratio of income tax to operating income for fraud firms compared to the ratio of income tax expense to operating income for nonfraud firms where r = .169, N = 196, (p < .05), two tails. Converting the fraud ratio to a z-score demonstrates that any ratio greater than .46 gives a greater than 50% chance of indicating fraud (Field, 2009).</p>
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Kopp, Katrina [Verfasser], and Markus [Verfasser] Grottke. "Essays on Fraud and Forensic Accounting - Research from a German Accounting Perspective / Katrina Kopp, Markus Grottke." Passau : Universität Passau, 2020. http://d-nb.info/121533754X/34.
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Efiong, Eme Joel. "An exploration of forensic accounting education and practice for fraud prevention and detection in Nigeria." Thesis, De Montfort University, 2013. http://hdl.handle.net/2086/10118.
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Whereas the problem of fraud is a global one, the rate and extent to which it is perpetrated in Nigeria, particularly in the public sector, is quite high and alarming. Literature reveals that different fraud prevention and detection mechanisms are being adopted to combat the menace of fraud; forensic accounting techniques appears to be the most effective and are currently used in most developed countries of the world. However, the extent to which forensic accounting techniques are being applied in fraud prevention and detection in Nigeria is not known. Also, the intention to use forensic accounting services in the public service has not been investigated. This study was therefore aimed at examining the application of forensic accounting techniques in fraud prevention and detection in Nigeria. Specific objectives were: (1) to investigate the mechanisms of fraud prevention and detection, and their levels of effectiveness in Nigeria, (2) to identify the major factors that hinder the application of forensic accounting techniques in fraud prevention and detection in Nigeria, (3) to examine practitioners' opinions and behavioural intention to use forensic accounting techniques in fraud prevention and investigation in Nigeria, (4) to explore the level of awareness of forensic accounting techniques in Nigeria and (5) to examine the readiness of universities in taking up forensic accounting courses. The study involved the collection of quantitative data. These data were collected from three sets of populations, viz. accounting students, accounting academics and accounting practitioners. The questionnaire served as the survey instruments. The data collected were analysed using appropriate statistical techniques and computer software. The study identified several fraud prevention and detection mechanisms that are currently used in Nigeria, such as systems of internal controls, operational audits and corporate code of conduct. Students' t-test indicates a significant difference between the perceived effectiveness and actual usage of fraud prevention and detection mechanisms in Nigeria. It was further discovered that the most effective mechanisms, like the forensic accounting techniques, are the least used in fraud prevention and detection. This implies that the current mechanisms of fraud prevention and detection are not proactive in dealing with the fraud menace. Also, legal, educational and political factors were identified to hinder the application of forensic accounting techniques in Nigeria. The level of awareness in forensic accounting in Nigeria is generally low. While the one-way analysis of variance indicates a significant variation among the three populations, it was discovered that students had the lowest level of awareness. Further findings of the study reveal that the universities are not yet ready to take up forensic accounting courses. Using the structural equation modelling (SEM), all the other seven propositions were supported. The findings of this study have both theoretical and practical implications. Theoretically, it further strengthened the findings of previous studies on the organisational intention. From the practical point of view, there is urgent need for manpower development in universities with specialisation in forensic accounting. Again, the educational institutions, and particularly the universities in Nigeria, would need to include forensic accounting courses in the undergraduate curriculum as education has been shown to be pivotal in creating awareness on the use of forensic accounting techniques. Furthermore, from the sampled space, the study has captured the current state of forensic accounting in Nigeria and the findings will be very useful for the public service, private organisations and policy makers.
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Wuttichindanon, Suneerat. "Determinants and consequences of accounting misstatements in Thailand : an analysis of firms subject to enforcement actions and restated financial reports." Thesis, Cardiff University, 2012. http://orca.cf.ac.uk/35826/.
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While the determinants of low earnings quality (GAAP violation) have been examined in prior research, very few studies have been undertaken in firms with concentrated ownership. Financial reporting in concentrated ownership firms is important because the types of agency conflict shift from the shareholder-agent conflict to the principal-principal conflict (i.e. a conflict between controlling shareholders and outside investors). Against this background, this research aims to reveal the determinants of accounting misstatements in concentrated ownership firms and Thai firms form the basis of the sample. In addition, the research assesses the economic consequences of accounting misstatements – an issue that has received relatively little attention in prior research. A study was conducted of a sample of 51 misstatement firm-years, compared with 2,452 non-misstatement firm-years for the financial reports of public companies listed on Thailand Stock Exchange during 2001-2009. The results indicate that Thai firms are more likely to misstate their financial reports when they are close to debt covenant violations and when they need external finance. Corporate governance mechanisms are also important factors influencing the likelihood of accounting misstatements. The likelihood of accounting misstatements increases when the ultimate owner holds more than 25% of the total shares. The determinants of accounting misstatements coincide with the institutional settings of the country. The study of the consequences of accounting misstatements reveals that misstating firms are more financially constrained than non-misstating firms after misstatement announcements. The net amount of capital supplied by capital providers falls significantly, particularly in the net proceeds from share issuances. The examination of both the determinants and consequences of accounting misstatements extends our understanding on the cost-benefit trade-off in the financial reporting process. The insights from this research might also be applicable to other countries where the country’s institutions are similar to those of Thailand and where ownership concentration is high.
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Suh, Ik Seon. "The effects of audit committee financial accounting expertise and recognition versus disclosure on chief audit executives' tolerance for financial misstatements /." Available to subscribers only, 2009. http://proquest.umi.com/pqdweb?did=1791777381&sid=2&Fmt=2&clientId=1509&RQT=309&VName=PQD.
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Thesis (Ph. D.)--Southern Illinois University Carbondale, 2009.<br>"School of Accountancy." Keywords: Audit committee, Financial accounting expertise, Internal auditors, Misstatements, Power, Recognition vs. disclosure, Accounting expertise, Financial misstatements. Includes bibliographical references (p. 128-144). Also available online.
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Suh, Ikseon. "The Effects of Audit Committee Financial Accounting Expertise and Recognition versus Disclosure on Chief Audit Executives' Tolerance for Financial Misstatements." OpenSIUC, 2009. https://opensiuc.lib.siu.edu/dissertations/281.
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The present study examines and finds that internal auditors, particularly Chief Audit Executives, recognize financial accounting expertise as a significant base of audit committee (AC) power in the financial reporting process. However, such an AC expertise (i.e., financial accounting expertise) does not "counterbalance" internal auditors' perceived dependency on management or influence their decisions to monitor financial reporting quality. Instead, the cost-benefit analysis affects their decisions: (1) benefits of staying resolute to monitor financial reporting quality (i.e., "psychological empowerment"), and (2) costs of potential adverse reactions of management who exerts power over the internal audit. In addition, this study examines and finds that the financial reporting location (recognition vs. disclosure) has significant impacts on both internal audit reporting decisions and decisions to correct misstatements. Specifically, internal auditors' tolerances for disclosed misstatements reveal that they also feed the "vicious circle" of reliability expectations as external auditors do in a prior study (Libby, Nelson and Hunton, 2006).
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Adomako, Godfred. "Strategies in Mitigating Medicare/Medicaid Fraud Risk." ScholarWorks, 2017. https://scholarworks.waldenu.edu/dissertations/3738.
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In the fiscal year 2014, approximately 1,337 health care providers lost their provider license to Medicare/Medicaid fraud. Out of the 1,318 criminal convictions reported by the U.S. Medicaid Fraud Control Units (MFCU), 395 (30%) were home health care aides who claimed to have rendered services not provided. The purpose of this multiple case study was to explore licensed and certified home health care business managers' strategies to mitigate Medicare/Medicaid fraud risk. A purposive sampling of 9 business managers and chief executive officers from 3 licensed and certified home health care businesses in Franklin County, Ohio participated in semistructured face-to-face interviews. Data from the interviews were transcribed, coded, and analyzed to identify themes regarding Medicare/Medicaid fraud risk management strategies. Drawing from the Committee of Sponsoring Organization's internal control framework and fraud management lifecycle theory, 5 themes emerged: the control environment, risk assessment, control activities, information and communication, and monitoring activities. Findings from this study included maintenance of integrity and culture, training and educating both staff and clients about fraud reporting processes and the consequences of fraud, rotating staff on a regular basis, performing fraud risk assessments, implementing remote timekeeping and monitoring system, and compensating shift leaders to coordinate activities in the clients' residences. The implication for positive social change includes reducing healthcare cost for all taxpayers through Medicare/Medicaid fraud reduction.
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Boecker, Corinna. "Accounting Fraud aufdecken und vorbeugen Formen der Kooperation von Unternehmensführung und -überwachung." Berlin Erich Schmidt, 2008. http://d-nb.info/997816775/04.
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Silva, Amélia Sofia Carvalho Damião da. "Application of Benford's Law in detecting accounting fraud in the Financial Sector." Master's thesis, Instituto Superior de Economia e Gestão, 2013. http://hdl.handle.net/10400.5/11030.
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Mestrado em Finanças<br>Este estudo pretende aplicar a Lei de Benford na deteção de fraude contabilística, através da análise dos resultados líquidos das empresas financeiras cotadas durante os anos de 2003 a 2012. O principal objetivo é verificar se esta lei se mantém após a crise de 2007/2008. Como medida de significância estatística utilizou-se o teste Z com um intervalo de confiança de 95%. Confirma-se que a nossa amostra segue a lei de Benford à exceção dos resultados líquidos positivos após o ano 2008 para os dígitos 1, 6 e 9,o que demonstra o efeito da crise de 2007/2008 nas empresas financeiras.<br>This study aims to apply Benford's Law in detecting accounting fraud on the analysis of net income from listed financial companies, through years 2003-2012. Its main purpose is to confirm whether Benford?s Law is still valid after the 2007/2008 financial crisis. To measure the statistical significance, a Z test with a 95% confidence interval was employed. With the exception of a sample showing positive net income after 2008, for the digits 1, 6 and 9, it was confirmed that our sample follows Benford's Law which demonstrates the effect of the 2007/2008 crises on financial companies.
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Davis, Marquita V. "Strategies to Prevent and Detect Occupational Fraud in Small Retail Businesses." ScholarWorks, 2019. https://scholarworks.waldenu.edu/dissertations/6887.
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Business owners' lack of strategies to prevent and detect occupational fraud in small retail businesses in the United States could result in substantial financial losses or insolvency. Grounded in Cressey's fraud triangle, the purpose of this multiple case study was to explore internal control strategies 6 owners of small retail businesses in southeastern Pennsylvania used to prevent and detect occupational fraud. Face-to-face interviews, observations, and documentation are the data collection techniques I used in this study. Data were transcribed, coded, analyzed, and member checked to identify emergent themes. Six themes emerged from the thematic analysis: financial impact, transaction responsibility and monitoring, networking and business models, communication, separation of duties, and training. The results of this study indicated areas for action that owners of small retail businesses could take to prevent and detect occupational fraud. Strategies business owners could implement to protect their businesses from occupational fraud include monitoring, employee identity documents to track employee activity, separation of duties, and communication with employees. The implications of this study for positive social change include the potential for social entrepreneurship because small business owners create employment opportunities for members of the community, including high school students with the desire to run small retail businesses. Small business owners serve their communities by focusing on wealth distribution, including donations to local charities that foster economic stability with positive effects on society.
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Ortiz, Angel. "Strategies to Reduce Occupational Fraud in Small Restaurants." ScholarWorks, 2018. https://scholarworks.waldenu.edu/dissertations/5241.
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Occupational fraud is a growing business risk that is causing greater financial losses in small businesses than large businesses. Business owners lose approximately 5% of their revenues due to occupational fraud. The purpose of this multiple case study was to explore the strategies used by some business owners of small restaurants to reduce occupational fraud. The fraud triangle theory was the conceptual framework for this study. Three small restaurant owners from Puerto Rico participated in face-to-face, semistructured interviews to reveal their successful strategies to minimize fraud. The data collection process also included business documents and researcher observations that assisted in establishing methodological triangulation. Using Yin's 5-step process, data were coded and analyzed to identify emergent themes. The primary emergent themes obtained from data analysis revealed that owner monitoring, analytical procedures, and segregation of duties are effective strategies to minimize employee fraud. Participants revealed that the implementation of these strategies may reduce organizational losses associated to fraud. The findings of this study may contribute to social change by reducing fraud activities, business failures, unemployment level, and criminality rate while promoting trust between community members and their institutions.
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Aborbie, Solomon. "Narrowing the Gap of Financial Fraud Detection in Corporations." Thesis, Walden University, 2015. http://pqdtopen.proquest.com/#viewpdf?dispub=3688003.
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<p> Business leaders remain exposed to financial and accounting fraud as well as loss of profitability, despite the dictates of the SOX Act of 2002. The most challenging aspect of corporate management is the unexpected nature of an emerging, existing, or an inherent financial risk. Guided by the evolution of fraud theory, this exploratory case study's purpose was to identify and explore the financial management strategies that corporate financial managers need to adequately protect investors. Twenty participants from a population group of corporate auditors of Fortune 1000 corporations within 70 miles of Columbus, Ohio provided input for this study. Data from the interviews were analyzed through coding, reviewing, categorizing, and combining common statements. The research findings included themes of knowledge and types of risks; the impact of financial fraud and risks on investment; the impact of accounting, auditing, and financial reporting standards; as well as financial management training to minimize audit expectations. These themes formed the focus of exploring the financial management strategies that corporate financial managers need to adequately protect investors and investments. In addition to the antifraud measures, financial managers may detect and control inherent risks in emerging opportunities for positive social change that includes enhanced knowledge in diversification of investments, an increase in economic resources, economic growth, and greater employment in the United States.</p>
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Chui, Lawrence. "An Experimental Examination of the Effects of Fraud Specialist and Audit Mindsets on Fraud Risk Assessments and on the Development of Fraud-Related Problem Representations." Thesis, University of North Texas, 2010. https://digital.library.unt.edu/ark:/67531/metadc30447/.
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Fraud risk assessment is an important audit process that has a direct impact on the effectiveness of auditors' fraud detection in an audit. However, prior literature has shown that auditors are generally poor at assessing fraud risk. The Public Company Accounting Oversight Board (PCAOB) suggests that auditors may improve their fraud risk assessment performance by adopting a fraud specialist mindset. A fraud specialist mindset is a special way of thinking about accounting records. While auditors think about the company's recorded transactions in terms of the availability of supporting documentations and the authenticity of the audit trail, fraud specialists think instead of accounting records in terms of the authenticity of the events and activities that are behind the reported transactions. Currently there is no study that has examined the effects of the fraud specialist mindset on auditors' fraud risk assessment performance. In addition, although recent studies have found that fraud specialists are more sensitive than auditors in discerning fraud risk factors in situation where a high level of fraud risk is present, it remains unclear whether the same can be said for situation where the risk of fraud is low. Thus, the purpose of my dissertation is to examine the effects of fraud specialist and audit mindsets on fraud risk assessment performance. In addition, I examined such effects on fraud risk assessment performance in both high and low fraud risk conditions. The contributions of my dissertation include being the first to experimentally examine how different mindsets impact fraud-related judgment. The results of my study have the potential to help address the PCAOB's desire to improve auditors' fraud risk assessment performance though the adoption of the fraud specialist mindset. In addition, my study contributes to the literature by exploring fraud-related problem representation as a possible mediator of mindset on fraud risk assessment performance. I executed my dissertation by conducting an experiment in which mindset (fraud specialist or audit) was induced prior to the completion of an audit case (high or low in fraud risk). A total of 85 senior-level accounting students enrolled in two separate auditing classes participated in my study. The results from my experimental provide empirical support that it is possible to improve auditors' fraud risk assessment through adapting the fraud specialist mindset. My study also provides preliminary evidence that individuals with the fraud specialist mindset developed different problem representations than those with the audit mindset.
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Rückeshäuser, Nadine [Verfasser], and Günter [Akademischer Betreuer] Müller. "Distributed ledgers for the prevention of accounting fraud : : blockchains between expectations and reality." Freiburg : Universität, 2017. http://d-nb.info/1137466235/34.
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Hou, Qingchuan. "Two essays on empirical accounting research /." View abstract or full-text, 2007. http://library.ust.hk/cgi/db/thesis.pl?ACCT%202007%20HOU.
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Appiah-Sokye, George. "Exploratory Multiple-Case Study of Illinois External Auditors' Perceptions of Fraud Education in Undergraduate Accounting Programs." Thesis, Northcentral University, 2016. http://pqdtopen.proquest.com/#viewpdf?dispub=10181182.
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<p> External auditors do not have the capacity to detect corporate fraud, even though accounting scholars have agreed on the perceived importance of fraud detection. There is a need to integrate fraud detection courses and forensic accounting topics into undergraduate training. This study addressed the problem of external auditors’ detection of less than 5% of fraud cases resulting from their lack of fraud detection topics and courses from their undergraduate studies. The purpose of this qualitative exploratory multiple-case study was to explore external auditors’ perspectives on expected competencies and fraud detection topics and courses from their undergraduate accounting programs and whether this education prepared them to detect corporate fraud. An exploratory, holistic, multiple-case study research methodology was utilized for the study. A purposive snowball criterion sampling was used to recruit 12 participants with bachelor’s degree and at least 1 year of experience in the auditing field in Northern Illinois. The list of membership provided by professional accounting bodies was used to recruit the participants. The external auditors’ perspectives were captured as data using open-ended questions in a semi-structured face-to-face interview format. A five-phased research analysis was applied for qualitative data analysis with the help of NVivo 11 software to identify themes associated with the research questions. A total of sixteen themes, made of nine major themes and seven minor themes, emerged from the study and formed the basis of the findings. The results of the study indicated that external auditors have not detected corporate fraud in practice. Furthermore, fraud education received in the undergraduate accounting programs was not sufficient for corporate fraud detection. Competencies for corporate fraud detection in auditing practice were found to be low among external auditors and four strategies were suggested for integrating fraud education into college accounting programs. The outcome of this study supported recommendations for practical accounting application and future research was recommended for replication of study in other geographic locations to compare the perspectives of educators, management, and internal auditors with a focus on other frauds involving credit cards, payroll, fraudulent billing, inventory, and theft or stealing to build on, extend, confirm, or disconfirm them.</p>
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Hays, Jerry B. "An Investigation of Management Accountants Intention to Report Fraudulent Accounting Activity: Applying the Theory of Planned Behavior." NSUWorks, 2013. http://nsuworks.nova.edu/hsbe_etd/40.
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The perpetration of accounting fraud still remains a prevalent and significantly costly issue in today's business world. The names Enron, WorldCom, HealthSouth, and Madoff are still all too recent reminders of the devastating cost of financial statement fraud. Management accountants, as preparers of these statements, are in the best position to detect such fraud. Yet there exists no current measurement instrument or methodology designed to measure a management accountant's intention to report fraud. The primary purpose of this study was to investigate the beliefs, concepts, and antecedents that provide the motivation to, or the deterrent from, the reporting of fraudulent accounting activity when witnessed by professional management accountants, and develop an instrument that might measure that motivation.
The theoretical basis that framed this research was the Theory of Planned Behavior which provides for an analysis of a participant's attitude, subjective norm, and perceived behavioral control in the development of the intention to perform a specific behavior. The population studied was the U.S. membership of the Institute of Management Accountants, and grant assistance and support was provided by the Institute's Research Foundation. The sample from this population formed a very appropriate representation of experienced, professional management accountants.
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No previous research involving this population with the application of the Theory of Planned Behavior and the investigation of the reporting of fraudulent accounting activity had been conducted. Therefore, there were no existing survey instruments that could be applied. The development of an original survey questionnaire to specifically address this research was required.
The distribution of this survey questionnaire resulted in 285 complete and usable responses. These responses measured the strength of the participant's positive or negative beliefs concerning the antecedents related to the three exogenous constructs of the Theory of Planned Behavior - attitude, subjective norm, and perceived behavioral control, and the endogenous construct of intention.
Structural Equation Modeling (SEM) with measured variables was chosen as the methodology for the analysis of the results measured in the survey responses. Confirmatory Factor Analysis was applied to each construct individually, and construct items were modified to obtain the most reasonable model fit, validity, and reliability. Items were combined into composites to represent the constructs of interest in the theory, as measured by the survey. The relations among the constructs of the Theory of Planned Behavior were then specified using these composites in an SEM model.
The results of the data and the findings of the SEM model indicated that professional management accountants form a strong positive intention to report the witnessing of accounting fraud. The positive beliefs that formed the exogenous variables that showed statistically significant effects on the endogenous variable of the formation of a positive intention to report fraudulent accounting activity were: support of the system of internal control, prevention of financial loss, retention of the integrity and ethical values of the profession, perceived support of significant others, and limited impediment due to fear of retaliation. A surprising result was that 32% of all respondents indicated a lack of easy/any access to an anonymous fraud reporting hotline, which is an issue for further research.
This study provides additional insight into the concepts, beliefs, and antecedents that form a professional management accountant's intention to report fraudulent accounting activity. The study also presents the basis of a preliminary instrument for the measurement of the intention of management accountants to report fraudulent accounting activity. Further research is suggested for the identification of additional concepts, antecedents, and beliefs related to fraud reporting and for the development of an even more effective measurement instrument.
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Vichitlekarn, Sansakrit. "Control system choice, control system assessment, and substantive testing for fraud /." view abstract or download file of text, 2000. http://wwwlib.umi.com/cr/uoregon/fullcit?p9998024.
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Thesis (Ph. D.)--University of Oregon, 2000.<br>Typescript. Includes vita and abstract. Includes bibliographical references (leaves 54-55). Also available for download via the World Wide Web; free to University of Oregon users.
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Smith, Dallin O. "Impact of Internal Information Quality on Potential Earnings Management and Fraud." Case Western Reserve University School of Graduate Studies / OhioLINK, 2021. http://rave.ohiolink.edu/etdc/view?acc_num=case1626457058557002.
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Riney, Felicia Ann. "A qualitative study| Being proactive in detecting and preventing fraud in the post Sarbanes-Oxley era." Thesis, University of Phoenix, 2016. http://pqdtopen.proquest.com/#viewpdf?dispub=10164149.
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<p>The purpose of this study is to apply the qualitative research method of descriptive single-case study design to explore the phenomenon of fraud in companies in the state of Arkansas by conducting face-to-face interviews with mid-level officers, distributing questionnaires to upper-level officers, and reviewing company documentation in the retail, professional services, or manufacturing industries in Arkansas. The focus is to understand the phenomenon of fraud and company officers’ perceptions about tools for detecting and preventing fraud. Financial statement fraud tactics make up 9% of the fraud cases globally, which equates to a median loss of $1 million (Association of Certified Fraud Examiners, 2014). The research method involves the triangulation of data from interviewing mid-level company officers, distributing questionnaires to upper-level company officers, and reviewing organizational policy and procedure documents. Interviews will consist of at least 20–35 participants in a mid-level officer position to ascertain their perceptions about the fraud triangle as a tool and the Baldrige Criteria for Performance Excellence (BCPE) as a framework, a questionnaire will be distributed to upper-level officers to confirm/disconfirm themes, and company historical documents will be reviewed. Because officers are accountable for the accuracy of financial reporting and the ethical conduct of employees, establishing methods for detecting and preventing fraud averts fraudulent acts such as the embezzlement, false reporting, or bribery. </p>
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Lyford, Henry. "Conflict of Interest?: Executive-Auditor Relationship and the Likelihood of a SEC-Prompted Restatement." Scholarship @ Claremont, 2010. http://scholarship.claremont.edu/cmc_theses/39.
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This study examines the relationship between executives and their independent auditor to see if there is a conflict of interest in their interaction. This study was motivated by the meltdowns, partially caused by fraudulent accounting, of many public companies in the late 1990s and early 2000s and the consequent passage of the Sarbanes-Oxley Act. This study examines the variables of audit fees, fees for other services, and auditor tenure to see if they are connected with the occurrence of an SEC-prompted restatement. The results show no significant correlation between amount of fees and the likelihood of an SEC-prompted restatement but indicate a negative correlation between length of executive-auditor relationship and the occurrence of an SEC-prompted restatement.
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Appiah, Emmanuel A. "Exploring the Perceptions of Northern Virginia Accountants on Internal Control Weaknesses Resulting in Accounting Fraud." Thesis, Northcentral University, 2016. http://pqdtopen.proquest.com/#viewpdf?dispub=3745274.
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<p> Internal controls play critical roles in all organizations. Internal control weaknesses that have resulted in accounting fraud have global and local ramifications including job and investment losses. The ramifications have been felt globally in the United States, Britain, China, and locally, in Northern Virginia. Weak internal controls or the lack thereof was the most preeminent factor contributing to accounting fraud. Many studies have discretely and narrowly examined either internal control weaknesses or fraud. Consequently, there was a dearth of research on internal control failures that have resulted in accounting fraud. The problem addressed in this study was the need to understand accountants’ perspectives on how they detected and handled internal control weaknesses within their organizations and their perceptions of their preparedness to detect and prevent fraud based on the academic and on-the-job training they have received. The purpose of this qualitative multiple case study was to describe how accountants in the Northern Virginia area detected and handled internal control weaknesses within their organizations and their perceptions of their preparedness to detect and prevent fraud based on the academic and on-the-job training they received. In this study, informal face-to-face, open-ended semi-structured interviews and document review were conducted. Purposive snowball and criterion sampling were used to recruit 15 professional accountants. Lists maintained by professional accounting organizations were used to identify members who met the study criteria. Data were analyzed using qualitative content analyses to identify themes related to the research questions. Results indicated that lack of monitoring preeminently contributed to fraud. However, accountants shared strategies they used to detect and prevent internal control weaknesses and accounting fraud within their organizations. Additionally, accountants received inadequate internal control and fraud training both in college and from their employers. Recommendations for practical application include providing accountants with adequate internal control and fraud training in college and by employers. Future research should explore organizational managements’ perspectives on internal control weaknesses that resulted in accounting fraud to shed more light on the pervasiveness of the deficiencies identified. This study was limited to accountants in Northern Virginia, future research may replicate this study, but in different geographic locations.</p>
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YU, Qian. "The impact of quantitative materiality, perceived responsibility and Machiavellianism on tax professionals’ decision making regarding Fraud detection and reporting in the PRC." Digital Commons @ Lingnan University, 2014. https://commons.ln.edu.hk/acct_etd/20.
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Research on fraud detection in accounting has long focused primarily on financial statement fraud and responsibilities of auditors and company management relating to such frauds. While tax fraud is also clearly significant, and tax professionals have responsibilities relating to fraud detection, little prior research has addressed this issue. The current research examines the impact of quantitative materiality, perceived responsibility (based on the triangle model of responsibility) and Machiavellianism on several aspects of tax professionals’ decision making regarding fraud detection and reporting.
I surveyed all tax professionals in the People’s Republic of China working for one of the Big 4 public accounting firms. The results indicate that, as anticipated, Machiavellianism had significant negative associations with tax professionals’ perceived responsibility to detect fraud, and high Machiavellians judged fraudulent actions to be less unethical and socially irresponsible. A composite measure of the triangle model of responsibility was positively associated with participants’ perceived professional obligation for fraud detection as well as the estimated likelihood of discovering and reporting fraud. In contrast, quantitative materiality was not associated with perceived responsibility for fraud detection, ethical judgments or the likelihood of detecting or reporting fraud.
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Rahajeng, Dian Kartika. "Stakeholders' perceptions of fraud in Indonesian BMT Islamic cooperatives." Thesis, University of Essex, 2018. http://repository.essex.ac.uk/23242/.
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Indonesia’s Baitul Maal wat Tamwil (known as BMT Islamic cooperatives; henceforth BMTs), are an important phenomenon in Indonesia due to their rapid growth (i.e. numbers, assets, members) and spread across the nation. BMTs are seen as organisations that fill a gap in the market by catering for small-micro-sized enterprises (SMEs) by which because of their size find it difficult to obtain access to the usual financial intermediaries such as banks. BMTs also have an important social role of contributing to poverty alleviation, since SMEs are perceived as vehicles through which wealth and prosperity can be improved. However, in contrast to what we would expect from organisations espousing Islamic values, in recent years there have been a number of frauds involving BMTs which both socially and economically has had a detrimental effect on society. This contradiction merits examination. Therefore, the purpose of this study is to examine stakeholders’ perceptions of fraud in BMTs. The research is comprised of three main stages: a critical literature review, an archival media analysis, and semi-structured interviews; followed by an analysis of the findings using stakeholder theory as an analytical tool. The literature is explored on three main issues: corporate governance, non-traditional organisation, and fraud. This research utilises the narrative case study method and content analysis. The narrative case study is adopted to gain in-depth understanding of fraud problems such as rigorous examination of stakeholders (i.e. managers, members, employees, authorities, society). This study finds that the fraud incidents in BMTs as a systematic failure as all stakeholder groups have their responsibilities on these failures. There are overlapping values between micro (individual) values and macro values (especially Islamic and cultural values) which enabled fraud to occur. This study contributes to the theory and literature by emphasises the importance of cultural and religious aspects to the analysis of corporate governance theories. This study also contributes to the practice of BMTs and mutuals by provide relevant insights and guidelines to policymakers and practitioners for the future development of BMT governance in Indonesia, particularly the fraud prevention strategies.
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Scheetz, Andrea M. "The Effect of Psychological Contract Violations on Employee Intentions to Report Fraud." Case Western Reserve University School of Graduate Studies / OhioLINK, 2016. http://rave.ohiolink.edu/etdc/view?acc_num=case1459529297.
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Ashraf, Javiriyah. "The accounting fraud at WorldCom the causes, the characteristics, the consequences, and the lessons learned." Honors in the Major Thesis, University of Central Florida, 2011. http://digital.library.ucf.edu/cdm/ref/collection/ETH/id/5.
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The economic prosperity of the late 1990s was characterized by a perceived expansive growth that increased the expectations of a company's performance. WorldCom, a telecommunications company, was a victim of these expectations that led to the evolution of a fraud designed to deceive the public until the economic outlook improved. Through understanding what led to the fraud, how the fraud grew, and what its effects were, lessons can be derived to gain a better understanding of the reasons behind a fraud and to prevent future frauds from occurring or growing as big as the WorldCom fraud did.<br>ID: 030476472; System requirements: World Wide Web browser and PDF reader.; Mode of access: World Wide Web.; Accepted in partial fulfillment of the requirements for honors in the major in Accounting.; Adviser: Pamela Roush.; Thesis (B.A.)--University of Central Florida, 2011.; Includes bibliographical references (p. 51-53).<br>B.S.B.A.<br>Bachelors<br>Business Administration<br>Accounting
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Akuh, Comfort G. "Small Retail Business Strategies to Detect and Prevent Employee Fraud." ScholarWorks, 2017. https://scholarworks.waldenu.edu/dissertations/4266.
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Small businesses have an important role to play in the U.S. economy. However, employee fraud can jeopardize the sustainability of small businesses. Grounded on Cressey's fraud triangle theory, the purpose of this multiple case study was to explore strategies used by selected managers and owners of small retail businesses to detect and prevent employee fraud. Ten participants from 5 small retail businesses participated in the study. Nine participated in a face-to-face semistructured interview, and 1 participated in a telephone interview. These participants included 5 owners and 5 managers of small retail businesses in the state of Michigan in the United States who have implemented strategies to detect and prevent employee fraud. Through a process of methodological triangulation, casual observations and documentary evidence supplemented data collected through semistructured interviews. Using thematic analysis by coding narrative segments, the research findings included themes of controls and communication, cash register accountability, segregation of duties, monitoring, and action against perpetrators. Managers and owners of small businesses may benefit from the findings of this study by gaining awareness of the need to detect and prevent employee fraud. The implications for positive social change may include the potential to increase appropriate controls over employee fraud, thus enabling owners of small retail business an opportunity to operate effectively and efficiently, which could increase employment opportunities. Increased employment opportunities could create a positive effect on other small retail businesses and allow local communities to prosper.
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Achilles, Wendy Walston. "An Experimental Analysis of the Impact of Goal Orientation, Ethical Orientation, and Personality Traits on Managers' And Accountants' Abilities to Recognize Misappropriation of Assets." VCU Scholars Compass, 2006. http://scholarscompass.vcu.edu/etd/699.
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This study examines the impact of knowledge, experience, goal orientation, ethical orientation, and personality traits on managers' and accountants' abilities to recognize misappropriation of assets. Participants included students and professionals. The student group included upper-level accounting majors and upper-level management majors. The professional group included students enrolled in an introductory accounting course for their MBA program and internal auditors from a variety of organizations. Findings in the study show that accounting students assessed the possibility that fraud was in progress at a higher level than the management students, suggesting that the accounting students acquire basic knowledge about fraud from the accounting curriculum, which improves performance. The effect of reading articles was marginally significant for assessing the possibility of fraud, showing that students who have read or who are required to read articles better identify the clues associated with employee theft. For the professional group, the effects of academic major and fraud specific training led to identifying the possibility of employee theft at a higher level. It appears that training sessions help professionals in identifying the risk factors associated with fraudulent activity, producing benefits to organizations that far outweigh the costs. Full-time work experience was marginally significant (p Several findings of the additional analysis using structural equation modeling extend the audit decision making literature by showing certain factors that enhance knowledge and improve decision making as experience increases. Higher learning goal orientation scores, mediated by experience and ethical position, should lead to more accurate identification of risk factors that are commonly associated with fraudulent activity. These findings should encourage firms to draw upon the knowledge of experts as they develop expert decision aids and training sessions for internal audit departments. Organizations should also integrate actual instances of misappropriation of assets into training sessions on fraud prevention and detection while developing and improving models of training sessions and expert decision aids for unstructured, complex tasks.
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Kujinga, Benjamin Tanyaradzwa. "The auditor's duty of reasonable care and skill and the expectation to detect fraud." Thesis, University of Fort Hare, 2008. http://hdl.handle.net/10353/104.
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Auditors perform a very important task within the context of the affairs of a company because financial reporting can only serve its purpose if stakeholders can rely on its accuracy and reliability. An auditor’s duty is to opine whether an entity’s financial reporting has been done according to the requirements of the law. The responsibility of reporting according to the law lies with an entity’s directors. Auditors cannot issue an absolute assurance as to the lawfulness and reliability of an entity’s financial reporting. However when it is subsequently discovered that the financial reporting was incorrect and that fraud has occurred auditors are often blamed and sued for enormous amounts of money for failing to detect material anomalies in the financial reports. These actions are based on the fact that auditors have a duty to exercise reasonable care and skill in the performance of their duties and through their failure to act as such, have caused financial harm to the clients or third parties. The fact that auditors are only required by law to exercise reasonable care and skill and perform an audit according to the standards of the reasonable auditor and not the most meticulous one, is often not regarded or is sometimes deliberately ignored. This clearly represents a problem in our law, namely that the presence of fraud in financial reports does not in itself suggest negligence on the part of the auditor but is apparently often perceived to do so. This research shows that the auditor’s duty of reasonable care and skill does not necessarily entail the duty to detect fraud. The elements of the duty of reasonable care and skill are identified from case law, legislation and international auditing standards. In order to limit the liability of auditors in general it is important to focus also on the elements of fault (negligence), wrongfulness and causation. This research shows that negligence cannot be established merely by the presence of fraud or material misstatements in financial statements. The responsibility for fair financial reporting lies with the directors. This research gives prominence to this fact which often seems to be ignored for convenience and in order to place the blame on the auditors. This research implicitly asks the question, why are auditors being held responsible for material misstatements in a company’s financial statements and not the directors? Guidelines for determining the extent of an auditor’s liability in this regard are formulated in this research.
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Cabarle, Carla. "PREDICTING THE RISK OF FRAUD IN EQUITY CROWDFUNDING OFFERS AND ASSESSING THE WISDOM OF THE CROWD." Diss., Temple University Libraries, 2019. http://cdm16002.contentdm.oclc.org/cdm/ref/collection/p245801coll10/id/541453.
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Business Administration/Accounting<br>D.B.A.<br>Regulation Crowdfunding, enacted in May 2016, is intended to facilitate capital formation in startups and small businesses funded primarily by small investors (Securities and Exchange Commission (SEC), 2016b). This dissertation investigates (1) the risk of fraud in equity crowdfunding offerings and (2) whether investors respond to fraud signals by selecting (rejecting) offers with low (high) fraud risk. Because equity crowdfunding is quite new, no frauds have yet been identified. Therefore, I employ a predictive analytics tool, Benford’s Law, to assess the fraud risk of the offering. I select observable indicators to represent the Fraud Triangle dimensions—incentives, opportunities and rationalization—and test if they predict fraud risk. I also compare offer funding outcomes to my fraud risk assessments to identify if investors’ selections consider fraud risk appropriately. The relaxed auditor assurance and disclosure requirements attracts both honest and dishonest founders, but I find that the risk of fraud is higher in equity crowdfunding offers than in public offerings as reported by other studies. I find that there are several individual fraud indicators and models that explain fraud risk, but these do not predict whether the offer is funded or not (funding outcomes) or the amount that is raised if funded. This dissertation is the first to apply Benford’s Law to equity crowdfunding offers and map fraud attributes to fraud risk and funding outcomes. My dissertation can inform investors, issuers, regulators, intermediaries and practitioners of the high risk of fraud in equity crowdfunding offerings and of several noteworthy fraud indicators.<br>Temple University--Theses
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Zmuda, Ronald. "An examination of the fraudulent factors associated with corporate fraud." Honors in the Major Thesis, University of Central Florida, 2011. http://digital.library.ucf.edu/cdm/ref/collection/ETH/id/532.
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Between the years 1998 and 2002, the United States suffered a time in which several large companies engaged in fraudulent behavior which eroded investor confidence in the stock market and to some extent destabilized the economy. Audits, which were conducted to assess the validity and reliability of a company's financial statements, were not detecting the material misstatements in the statements. As a result, both the US Government and the accounting profession needed to come up with a way to prevent these immense frauds from occurring in the future. As a response to these large frauds, in 2002, the US Government passed the Sarbanes-Oxley Act of 2002 (SOX) and the American Institute of Certified Public Accountants (AICPA) issued Statement on Auditing Standards No. 99(SAS No. 99) to improve investor confidence and the auditing function's ability to detect material frauds. The intent of this thesis was to look at the fraudulent factors associated with several recent corporate frauds and compare them to the standards set by SAS No. 99. Through the analysis conducted, this thesis looks at the relationships between pressures, opportunities, and rationalizations made during the act of fraud.<br>B.S.B.A.<br>Bachelors<br>Business Administration<br>Accounting
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Baten, Md Abdul, and Clara Chidinma Amadi. "Corporate Fraud Culture: Reanalysing the Role of Corporate Governance in Developing Countries. : A Case Study." Thesis, Linnéuniversitetet, Institutionen för ekonomistyrning och logistik (ELO), 2020. http://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-98241.
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Abstract In the current scenario of the business world, organizations face the pervasive problem of corporate fraud. This leads to huge losses and deprivation results in reduced profitability, diminished shareholders returns, loss of growth in opportunities and in certain cases even these threaten the sustainability of the organizations. Though dedicated investigations units and courts, specific legislation enhanced awareness and monitoring organizations in developing countries but still corporate fraud are abound. Therefore, establishing the key drivers for corporate fraud will enable the organizations to better evaluate their risk strategy and also to understand how to reanalyzing the role of corporate governance in regards to corporate fraud in developing countries. The qualitative research was used firstly with deductive approach in this study in order to establish the key drivers of corporate fraud; and secondly, to assess the role of corporate governance in addressing these drivers of corporate fraud. A total number of 10 structured, and semi-structured on-line based interviews through Zoom were conducted with the gatekeepers, bank managers and the compliance officers in a diverse range of organizations to explore this research. A further 2 interviews were conducted with the experts in the field of forensic investigation and corporate governance, whose insights views were used to test the initial findings for the triangulation process. The insight derived formed the basis of the data which was analyzed to produce the findings for this research. From this research, both the internal and external drivers of corporate fraud identified some common themes, though the diverse nature of the organizations researched. Illegal collusion between employees as well as financial distress because of recent economic failure were found to be amongst the key drivers. More particularly, findings indicated that corporate governance does and even play a critical role in regards to these drivers, and thus making the organization more conscious and proactive to address corporate fraud. Nevertheless, poor and inadequate implementation of corporate governance standards weakens the effectiveness. Thereupon, the real picture is that corporate governance is not legislated and contributes to the haphazard manner in which this is applied in different organizations in developing countries. To conclude that, corporate governance needs to be more supported by an ethical culture which can therefore serve its actual purpose. Despite findings, evidence that corporate governance is neglected by certain organizations. However, the findings from the derived triangulations exercise in strong support on the above findings.<br><p>This thesis has been published by Md Abdul Baten & Clara Chidinma Amadi.</p>
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Molungu, Thomas Ndive. "Internal Control Strategies to Mitigate Fraud in Small Manufacturing Businesses in Cameroon." ScholarWorks, 2019. https://scholarworks.waldenu.edu/dissertations/7943.
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Approximately 51.3% of small manufacturing businesses lack effective internal controls to deter fraud. Internal control strategies, when adequately implemented, can mitigate fraud and improve profitability in small manufacturing businesses. The objective of this single qualitative case study was to explore the internal control strategies used in a small manufacturing business to mitigate assets misappropriation fraud and improve profitability. Agency theory was the conceptual framework for this study. Five business managers in a small manufacturing firm in Cameroon participated in face-to-face semistructured interviews. The data analysis process included Yin's 5-step process. Identified themes included (a) governance at a higher management level, (b) vendor-related management approach, and (c) operational practices at the department level. Business leaders in small manufacturing firms could benefit from implementing the internal controls and procedures highlighted in this study to deter fraudulent billing from vendors, deceitful payment disbursement to vendors, and misrepresentation of financial statements by company executives. Fraud reduction might help business leaders to safeguard the company's assets and improve production goals by streamlining operational practices, leading to company profitability. In turn, business profitability would result in company leaders paying more taxes, which government officials may use for social amenities and change benefiting people in the community.
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Eller, Christopher K. "Can Using the Internal Audit Function as a Training Ground for Management Deter Internal Auditor Fraud Reporting?" VCU Scholars Compass, 2014. http://scholarscompass.vcu.edu/etd/3585.
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This study examines the effects of using the internal audit function as a training ground for management and fraud magnitude on internal auditor fraud reporting decisions. Using a 2x2 between-participants experiment, the current study manipulates the use of the internal audit function as a management training ground (used as a training ground vs. not used as a training ground) and fraud magnitude (large fraud, defined as 30 percent of net income vs. small fraud, defined as one percent of net income). The results indicate that internal auditors may be less likely to report a fraud to their superior when the internal auditors are being groomed for management positions. No effect is found for fraud magnitude, as respondents indicated a similar willingness to report small frauds as large frauds. These findings contribute to the whistleblowing literature and the internal audit objectivity literature by demonstrating that undesirable repercussions associated with using the internal audit function as a management training ground can extend to the internal auditor fraud reporting decision.
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Brown, Abigail Bugbee. "Private firms working in the public interest is the financial statement audit broken? /." Santa Monica, CA : RAND, 2007. http://www.rand.org/pubs/rgs_dissertations/RGSD212/.
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Wengler, Donald. "Increasing Auditor Sensitivity to the Risk of Fraudulent Financial Reporting: Assessing Incentives and Pressures on Top Management." Scholar Commons, 2016. http://scholarcommons.usf.edu/etd/6428.
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The ability of auditors to detect fraud, including intentional material misstatements in earnings, remains key to the credibility of audit firms and confidence in capital markets. The PCAOB concludes from its most recent inspections of public company audits that auditors often fail to assess and respond to risks of material misreporting by management. In a behavioral experiment, this study concludes that auditors can increase sensitivity to management motivation to misreport by actively seeking to transform identified risk factors focused on the organization, into factors focused on top managers, and to evaluate whether these manager-focused risk factors represent incentives for personal gain or pressures to avoid a personal loss on the managers. Currently, auditing standards use incentive and pressure as interchangeable constructs, but auditors in this study assess pressure on managers to avoid a loss as a greater risk than an incentive to managers to attain a gain. Results also demonstrate that auditors will be made more sensitive to fraudulent financial reporting risk when focusing on pressure on top managers, than they will be by engaging in a traditional process of assessing total fraud risk based on the three fraud triangle elements. This study is the first to propose a theoretical explanation for why prior studies reflect auditor insensitivity to organizational level fraud risk factors. This study is also the first to enhance knowledge about auditor risk assessment and decision-making through the application of prospect theory and through disaggregation of one of the three elements of the fraud triangle model, by differentiating between incentive and pressure for misreporting earnings.
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Hughes, David. "Accounting for individual differences in financial behaviour : the role of personality in insurance claims and credit behaviour." Thesis, University of Manchester, 2014. https://www.research.manchester.ac.uk/portal/en/theses/accounting-for-individual-differences-in-financial-behaviour-the-role-of-personality-in-insurance-claims-and-credit-behaviour(fdcf9d79-8806-46ef-b5ff-ad2aed110c79).html.
Full textAbstract:
The current thesis examined the relationships between personality and attitudes and behaviours related to insurance claims, insurance fraud, and credit use. The thesis incorporates a systematic literature review of Impulsivity-related personality traits. This review led to the identification and development of a six factor framework of Impulsivity-related traits (Impetuousness, Self-Regulation, Deferred-Gratification, Consideration of Future Consequences or CFC, Attention, and Sensation Seeking). The framework was subsequently used to classify existing “Impulsivity” measures so that coherent review of research linking “Impulsivity” to financial behaviour could be undertaken. The framework guided review revealed that four Impulsivity-related traits (Impetuousness, Self-Regulation, Deferred-Gratification, CFC) appeared to be influential across a number of financial behaviours and as a result could be considered somewhat ‘central’ to financial behaviour. Accordingly, these four traits were assessed in each of the three empirical studies. In addition, each study also included a number of outcome specific traits. These were traits likely to be of importance to the specific outcome variables in each study but were unlikely to be related to economic behaviour across multiple domains. In Study 1 (n = 377), the central Impulsivity-related traits and the outcome specific traits of Compulsivity, Oppositionality, Risk-Taking, and Sensation Seeking were assessed in relation to Attitudes Towards Insurance Claims and the number of previously submitted motor and home insurance claims. The results revealed that Deferred-Gratification, CFC and Self-Regulation accounted for 36% of the variance in Attitudes Towards Insurance Claims, whilst a combined demographic, attitude and personality model was able to correctly classify participants as previous claimants or non-claimants in 84% of cases for motor claims and 66% of cases for home claims. In Study 2 (n = 475), the central Impulsivity-related traits and the outcome specific traits of Callousness, Conduct Problems, Dishonest-Opportunism, Integrity, Machiavellianism, and Pessimism were assessed in relation to Attitudes Towards Insurance Fraud and previously submitted motor and home insurance claims. The results revealed that Dishonest-Opportunism, Consideration of Future Consequences, Pessimism, Age and Educational Attainment accounted for 58% of the variance in Attitudes Towards Insurance Claims, whilst a combined demographic, attitude and personality model was able to correctly classify participants as previous claimants or non-claimants in 78% of cases for motor claims but did not predict home claims. In Study 3 (n = 611), the central Impulsivity-related traits and the outcome specific traits of Anxiety, Compulsivity, Insecure Attachment and Narcissism, were shown to be differentially predictive of five self-report financial behaviour factors (Irresponsible Spending, Financial Planning, Emotional Spending, Impulsive Credit Use and Poor Credit Management; 30-50% variance explained), the number of credit cards and loans owned (≈22% variance explained), and debt (11-15% variance explained). Finally, the personality traits were seated within a meditational model of: Personality → Credit Acquisition and Financial Behaviour → Debt. This model was strongly supported and accounted for 26% of the variance in loan debt and 31% of the variance in credit card debt.