* The Authors would like to thank the generous support of the Research Group, a nationally recognized consortium of university scholars, corporate leaders, and qualified undergraduate students dedicated to high quality, collaborative research that contributes to the business profession. AbstractPurpose -The purpose of this paper is to better understand the relationship between accounting and auditing quality and the perceived level of corruption. Design/methodology/approach -This relationship is studied by performing a cross-country analysis using public data to measure accounting quality, audit quality, and corruption. Findings -Consistent with our predictions, we find evidence that accounting and auditing quality are significantly related to the level of perceived corruption in a country.Research Limitations/implications -These findings suggest that countries with more transparent reporting have lower levels of perceived corruption and that the level of perceived corruption may be reduced in a country by improving accounting and auditing quality. Practical implications -The findings suggest that countries can reduce the level of perceived corruption by improving the transparency of financial reporting by improving accounting and auditing standards. Originality/value -While significant amounts of research has examined perceived corruption, this study is the first to address the impact of high quality accounting information on the level of perceived corruption.

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Abstract:In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions for future research.