Challenges to the fraud triangle: Questions on its usefulness

Lokanan, Mark

doi:10.1016/j.accfor.2015.05.002

Cited by 107 publications

(182 citation statements)

References 106 publications

(298 reference statements)

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“…The latter can include lack of awareness, intuition coupled with rationalization, and reasoning (Murphy and Dacin 2011). The model has been questioned, however, since fraud is a multifaceted phenomenon and its contextual factors may not fit into a particular framework (Lokanan 2015). Soltani (2014), by analyzing six well-known corporate frauds-three American (Enron, WorldCom and HealthSouth) and three European (Parmalat, Royal Ahold and Vivendi Universal)-identified possible causes as ineffective boards, inefficient corporate governance and control mechanisms, distorted incentive schemes, accounting irregularities, failure of auditors, dominant CEOs, dysfunctional management behavior and the lack of a sound ethical tone at the top.…”

Section: Misbehaviors In Accounting and Financementioning

confidence: 99%

Ethics in Finance and Accounting: Editorial Introduction

2016

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In light of the recent crisis and its aftershocks, it becomes crucial to reflect on the relationship between finance and accounting and on how to integrate ethics and efficiency, as well as on how to motivate and empower practitioners in the world of finance to commit to justice, fairness and enhanced understanding, and to improving their personal integrity. This article, written as an editorial introduction to a special issue includes works related to control measurement and ethical behavior, misbehaviors in finances and accounting, professionalism in accounting, ethical investing and corporate reporting. We conclude by suggesting further research for a better integration of technical aspects of accounting and finances into business activity-human activity actually-and an for understanding of ethics not limited to rules, but as a mutual and interdependent system of values (human goods), virtues and principles.

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Section: Misbehaviors In Accounting and Financementioning

confidence: 99%

Ethics in Finance and Accounting: Editorial Introduction

2016

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“…Consequently, further research can be conducted to explain frauds in different societies and can assist international judgments in order to increase the effectiveness of the former FTT and FDT fraud theories. Moreover, fraud is a multifaceted phenomenon, in which related issues may not all be appropriate in one particular theoretical framework [19].…”

Section: Theoretical Backgroundmentioning

confidence: 99%

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

et al. 2018

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

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“…Indeed, these recent high profile cases continue to give life to the ACCA's (2016) claims and come with their own reflections that increase the battle cry for reforms (Power, 2013;Lokanan, 2015a). Such reforms invariably focus on surveillance mechanisms (Anand, Dacin, & Murphy, 2014;Donegan & Ganon, 2008;Murphy, & Dacin, 2011;Williams, 2013) that place emphasis on understanding the personality traits of individuals who are at high risk of offending (Price & Norris, 2009, p. 538).…”

Section: Introductionmentioning

confidence: 99%

“…Rather, SAT is part of the ongoing scholarship to encourage debate as we work together to tweak existing theories (Anand et al, 2014) or create new theories that capture the vast array of how fraud is perpetrated (Braithwaite, 2013;Donegan & Ganon, 2008). In this regard, the postulates of SAT are seen as gateways for a more collective perspective to the study of financial fraud and answer calls for research on the macro-sociological explanation of financial crimes (Cooper et al, 2013;Davis & Pesch, 2013;Donegan & Ganon, 2008;Dorminey, Fleming, Kranacher, & Riley, 2010;Lokanan, 2015a;Morales et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

“…First, the literature on financial crime has largely focused on the criminogenic behaviour of the lone wolf offender as opposed to collusive behaviours that characterise much of financial criminality (Albrecht et al, 2014;Lokanan, 2015a;Murphy & Dacin, 2011). One strong argument for SAT is that it draws on a more collective definition of morality and crime (Bouhana & Wikström, 2008;Wikström, 2011;Wikström & Treiber, 2009).…”

Section: Introductionmentioning

confidence: 99%

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Theorizing Financial Crimes as Moral Actions

Lokanan

2017

European Accounting Review

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Abstract:The paper maintains that all acts of financial crimes can be explained within a general theory of moral action and analyzed as such. In this regard, the paper presents such a theorySituational Action Theory (SAT) -and argues that acts of financial crimes result from a perception-choice process involving rational deliberation and experimental habituation, themselves the outcomes of interactions between individuals and their environments. To examine this argument, the paper draws on two recent high profile fraud cases to critically discuss the extent to which these crimes should be meaningfully and innovatively analysed as moral actions and the moral context in which they occur. The findings indicate that the feature most relevant to a criminogenic is its moral context in relation to the opportunities and frictions that it generates. As such, environmental factors along with psychosocial processes of moral education become particularly important in the explanation of why certain moral contexts emerge in particular kinds of settings at a particular point in time. In this regard, SAT can be used as a powerful overarching framework to gain a more comprehensive understanding of peoples' choice processes to breach moral rules and devise effective crime prevention strategies to combat fraud.

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Challenges to the fraud triangle: Questions on its usefulness

Cited by 107 publications

References 106 publications

Ethics in Finance and Accounting: Editorial Introduction

Ethics in Finance and Accounting: Editorial Introduction

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

Theorizing Financial Crimes as Moral Actions

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