Main Article Content
Abstract
This study analyses the panel data on the 96 most significant fraud cases from 1925 to 2020. The focus will be on agency theory because it affects falsified accounting as the most common type of accounting fraud and then Overstated Assets, Sales, and Revenues. Descriptive statistics with the 96 most prominent cases based on literature have been identified to understand the topic better. The data collected from 1925 to 2020 is presented and summarised in specific tables and graphs for a more immediate understanding. The mixed method was used to analyze 476 data items, both quantitative and qualitative research, with SPSS and Nvivo applications. This research found that 61 out of 96 fraud cases are from the USA, and the most auditor firm being Price Water House. The evidence that emerged is that none of the cases analyzed deals with the pandemic --the fraud occurred years ago- to understand possible practical implications and further theoretical contributions. This research suggests that auditors should apply business ethics to be more proactive and pragmatic, considering how quickly events change and the uncertainty that arises. This study contributes to advancing knowledge of the accounting world, specifically of fraud. As far as the authors know, this is the first study that analyzes the panel data on fraud with mixed methods.
Keywords
Fraud
Agency Theory
Auditor
Mixed Method
Accounting Standard
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
-
Adams, F. G., Bedard, J. C., & Johnstone, K. M. (2005). Information asymmetry and competitive bidding in auditing. In Economic Inquiry (Vol. 43, Issue 2, pp. 417–425). https://doi.org/10.1093/ei/cbi028
Al-Matari, E. M., & Mgammal, M. H. (2019). The moderating effect of internal audit on the relationship between corporate governance mechanisms and corporate performance among Saudi Arabia listed companies; [El efecto moderador de la auditoria interna en la relación entre mecanismos de gobierno corporativo y desempeño corporativo entre las compañías de Arabia Saudita que cotizan en bolsa]. In Contaduria y Administracion (Vol. 64, Issue 4, pp. 1–27). https://doi.org/10.22201/FCA.24488410E.2020.2316
Amat, Oriol, Blake, John, and Dowd, Jacks. (1999). The Ethics of Creative Accounting,
Economics Working Paper, SSRN
Arwinge, O. (2013). A Regulatory Perspective. In Contributions to Management Science (pp. 55–73). https://doi.org/10.1007/978-3-7908-2882-5_4
Boynton, W. C., Walter G. Kell. (1996). Modern Auditing, 6th Ed. New York, Jhon Wiley & Sons, Inc.
Boynton, W. C., Walter G. Kell. (1996). Modern Auditing, 6th Ed. New York, Jhon Wiley & Sons, Inc.
Cohen, J., Krishnamoorthy, G., & Wright, A. M. (2002). Corporate Governance and the Audit Process. In Contemporary Accounting Research (Vol. 19, Issue 4, pp. 573–594). https://doi.org/10.1506/983M-EPXG-4Y0R-J9YK
Dechow, P. M., Richard G. Sloan, Amy P. Sweeney. (1995). Detecting Earnings Management. The Accounting Review, vol. 70. No. 2 (April), pp: 193-225
Ferdinand Sadeli dan Ferry Wong. (2004). Creative Accounting: Kasus WorldCom, Financial, Investment, and Business Excellence.
Financial Accounting Standard Board. (1978). “Objective of Financial Reporting by
Business Enterprises”. Statement of Financial Accounting Concept No. 1.
Fischer, M., and Rosenweig, K. (1995). Attitudes of Students and Accounting Practitioners Concerning The Ethical Acceptability of Creative Accounting, Journal of Business Ethics, 14, pp. 433-444.
Flayyih, H. H., & Khiari, W. (2023). An Empirical Study To Detect Agency Problems In Listed Corporations: The Emerging Market Study. In Journal of Governance and Regulation (Vol. 12, Issue 1 Special Issue, pp. 208–217). https://doi.org/10.22495/jgrv12i1siart1
Geis, G., and R. F. Meier. (1977). White-Collar Crime: Offenses in Business, Politics, and the Professions. Revised Ed. New York: The Free Press.
Jensen, M.C. dan W.H. Meckling. (1976). “Theory of the Firm: Managerial Behavior, Agency Cost and Ownership Structure”. Journal of Financial Economics, Vol. 3, No. 4: 305-360.
Kannan, Y. H., Skantz, T. R., & Higgs, J. L. (2014). The impact of CEO and CFO equity incentives on audit scope and perceived risks as revealed through audit fees. In Auditing (Vol. 33, Issue 2, pp. 111–139). https://doi.org/10.2308/ajpt- 50666
Kassem, R., & Turksen, U. (2021). Role of public auditors in fraud detection: A critical review. In Contemporary Studies in Economic and Financial Analysis (Vol. 105, pp. 33–56). https://doi.org/10.1108/S1569-375920200000105004
Krishnan, G., & Peytcheva, M. (2019). The Risk of Fraud in Family Firms: Assessments of External Auditors. In Journal of Business Ethics (Vol. 157, Issue 1, pp. 261–278). https://doi.org/10.1007/s10551-017-3687-z
Macedo, P. S. G., Inácio, H. C., & Vieira, E. S. (2022). A model to detect financial statement fraud in portuguese companies by the auditor. In Contaduria y Administracion (Vol. 67, Issue 3, pp. 185–209). https://doi.org/10.22201/fca.24488410e.2022.2987
Merchant, K.A., and Rockness, J. (1994). the Ethics of Managing Earnings: an Empirical Investigation, Journal of Accounting and Public Policy, 13, pp. 79- 94.
Naser, K. (1992). A Note on the use of Creative Accounting, British Accounting Review, 24, pp. 111-118.
Orth, C. de O., Marrone, D. D., & Macagnan, C. B. (2022). Accounting fraud in light of organismic integration theory. In Journal of Financial Crime. https://doi.org/10.1108/JFC-08-2022-0198
Rispel, L. C., Jager, P. D., & Fonn, S. (2016). Exploring corruption in the South African health sector. In Health Policy and Planning (Vol. 31, Issue 2, pp. 239–249). https://doi.org/10.1093/heapol/czv047
Sihombing, R. P., Soewarno, N., & Agustia, D. (2023). The mediating effect of fraud awareness on the relationship between risk management and integrity system. In Journal of Financial Crime (Vol. 30, Issue 3, pp. 618–634). https://doi.org/10.1108/JFC-02-2022-0058
Singh, N., Lai, K., Vejvar, M., & Cheng, T. C. E. (2019). Data-driven auditing: A predictive modeling approach to fraud detection and classification. In Journal of Corporate Accounting and Finance (Vol. 30, Issue 3, pp. 64–82). https://doi.org/10.1002/jcaf.22389
Subedi, M. (2023). Independent Audit Matters: Mitigation Of Auditors’ Independence Issues And Biases. In Edpacs (Vol. 67, Issue 2, pp. 15–23). https://doi.org/10.1080/07366981.2022.2125538
Sutherland, E. H., and D. R. Cressey, (1960). Principles of Criminology 6th ed.
Chicago: J. B. Lippincott Company.
Syamsuddin, Rahmawati, Indrijawati, A., & Bandang, A. (2023). Effect Of Competence, Whistleblower, And Probity Audit On The Detection Of Fraud In The Procurement Of Goods/Services With Emotional In℡Ligence As A Moderating Variable; [Efeito Da Auditoria De Competência, Denúncia E Probidade Na Detecção De Fraude Na Aquisição De Bens/Serviços Com In℡Igência Emocional Como Variável Moderadora]; [Efecto De La Auditoría De Competencias, Denunciantes Y Probidad En La Detección De Fraude En La Contratación De Bienes/Servicios Con La In℡Igencia Emocional Como Variable Moderadora]. In International Journal of Professional Business Review (Vol. 8, Issue 4). https://doi.org/10.26668/businessreview/2023.v8i4.1525
Tillman, R. (2009). Reputations and corporate malfeasance: Collusive networks in financial statement fraud. In Crime, Law and Social Change (Vol. 51, Issues 3–4, pp. 365–382). https://doi.org/10.1007/s10611-008-9161-1
Watts, R. L. dan J. L., Zimmerman. (1986). Positive Accounting Theory. Englewood Cliffs, New Jersey 07632: Printice-Hall International Inc.
Welch, O. J., Reeves, T. E., & Welch, S. T. (1998). Neural network model: Bid pricing fraud. In Journal of Computer Information Systems (Vol. 38, Issue 3, pp. 99– 104).
Yadolah Dodge. (2006). The Oxford Dictionary of Statistical Terms, Oxford: United Kingdom