Financial fraud, scandals, and regulation: A conceptual framework and literature review

Abstract

This perspectives article surveys publications in business history and constructs a conceptual framework for researching fraud and other dubious financial practices, their determinants and their consequences. The prevalence and nature of the practices studied are mainly determined by individual traits, firm governance and control, the economic environment, and regulation. Contemporaries make sense of dubious practices by constructing narratives, possibly framing them as scandals, which are likely to lead to attempts at regulatory change. It is primarily the socio-economic impact of dubious practices that determines whether regulation becomes fundamentally stricter. Existing agendas for reform strongly influence the substance of regulatory responses.

Accounting as an instrument of power: The case of an Italian hospital in the late nineteenth century

“…In this study, we draw on a framework that reinterprets the idea of Van Driel (2019) by incorporating Foucault’s theories. In this conceptual model, the incentives and opportunities to commit misconduct are determined by the joint action of the external context with the specific conduct of the individual.…”

“…The conceptual framework draws from Van Driel (2019), reinterpreted in the light of Foucault’s theories. The incentives and opportunities to commit misconducts are determined by the joint action of the external context with the specific conduct of the individual (Van Driel, 2019). The external context is conceived in its cultural connotations, in its socio-economic characteristics and in the regulatory mechanisms operating in a certain historical period.…”

“…Scholars agree that fraudulent events can be considered as social constructions (Cooper et al., 2013; Greve et al., 2010). Since these differ temporally and geographically, a historical approach based on case studies seems to be useful to further investigate this topic (Van Driel, 2019).…”

Effect of organizational learning and effectiveness on the operations, employees productivity and management performance

“…Some of the challenges highlighted in their study include increasing competition, the problem of customer retention, continuous quest and challenge for the bank to meet innovation demand of customers and also the challenge posed by the ever-changing business model to meet customers' expectations to retain the customers. Van-Driel (2019) further added more challenges faced by banks to include the continuous effort by banks to meet regulatory compliance, the challenge of managing the bank businesses to gain competitive advantage and also the rising expectations from both stakeholders and customers as some of the numerous challenges faced by banks. Despite these challenges, the banking industry has continued to witness tremendous growth and the creation of various banking products that appeal to customers.…”

Introduction: Business and the Law

“…They were countered, however, by historians of antitrust (Lamoreaux 1985;Dobbin and Dowd 2000) or incorporation law (Guinnane et al 2007) who explained firm decisions in light of the regulatory context. A recent wave in business history on rethinking regulation (Balleisen 2017; John and Phillips-Fein 2017; Phillips Sawyer 2018), business crime and scandals (Hollow 2014;Berghoff, Rauh, and Welskopp 2016;Berghoff and Spiekermann 2018;Taylor 2018;van Driel 2019), or organizational dynamics (Fleming 2016;Wadhwani 2018) has highlighted the multiple dimensions at the intersection of law and economics (Dahlén and Larsson 2014;Pahlow 2014). They have helped opening up the field of interdisciplinary research in which this Special Issue positions itself.…”