Corporate Fraud and Managers’ Behavior: Evidence from the Press

By Jeffrey R. Cohen, Yuan Ding, C. Lesage, Hervé Stolowy. 2010

308 citations recorded by the source corpus.

Based on evidence from press articles covering 39 corporate fraud cases that went public during the period 1992–2005, the objective of this article is to examine the role of managers’ behavior in the commitment of the fraud. This study integrates the fraud triangle (FT) and the theory of planned behavior (TPB) to gain a better understanding of fraud cases. The results of the analysis suggest that personality traits appear to be a major fraud-risk factor. The analysis was further validated through a quantitative analysis of keywords which confirmed that keywords associated with the attitudes/rationalizations component of the integrated theory were predominately found in fraud firms as opposed to a sample of control firms. The results of the study suggest that auditors should evaluate the ethics of management through the components of the TPB: the assessment of attitude, subjective norms, perceived behavioral control and moral obligation. Therefore, it is potentially important that the professional standards that are related to fraud detection strengthen the emphasis on managers’ behavior that may be associated with unethical behavior.

Subfields: Accounting, Information Systems and Management, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/cedfeecd4606d0231ecb435f2294ece17aa2b64b

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Citations in the corpus

Does the External Monitoring Effect of Financial Analysts Deter Corporate Fraud in China? (2014, background): “The rationalization factor provides justification for fraud and is influenced by attitude, character, values, or reasoning (Cohen et al. 2010).”
Understanding Auditors’ Sense of Responsibility for Detecting Fraud Within Organizations (2018, background): “The business ethics research literature (e.g., Adamson et al. 2014; Cohen et al. 2010; Davis et al. 2014; Firth et al. 2005; Jamnik 2011; Kerler and Killough 2009) highlights that such audit failures represent important business ethics issues that extend fraud case analysis beyond the ethical failur”
The Anatomy of Corporate Fraud: A Comparative Analysis of High Profile American and European Corporate Scandals (2014, background): “Cohen et al. (2010) in their study which provides evidence from the press concerning the U.S. corporate frauds and management behavior highlight the importance of the analysis of the European cases of corporate fraud as a further research (p. 289).”
The moderating effect of religiosity on ethical behavioural intentions: An application of the extended theory of planned behaviour to Pakistani bank employees (2017, background): “Religiosity is also linked with the levels of perceived behavioural control exhibited by people in both social and organisational settings (Cohen et al., 2012; Cherry, 2006; Vitell, 2009).”
Auditor Perceptions of Client Narcissism as a Fraud Attitude Risk Factor (2013, unknown): “observed attitudes and behaviors in recent major frauds (Cohen et al. 2010).”
Sustainable Behavior in the Business Sphere (2014, unknown): “Some scholars have identified individual normative processes as a central predictor of pro-environmental behavior in companies, such as individual concern (Bansal & Roth, 2000), moral obligation (Cohen et al., 2010), or moral sensitivity (Buchan, 2005).”