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    Insights for Research and Practice: What We Learn about...
    research summary posted March 2, 2015 by Jennifer M Mueller-Phillips, tagged 06.0 Risk and Risk Management, Including Fraud Risk, 06.01 Fraud Risk Assessment, 06.02 Fraud Risk Models 
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    Title:
    Insights for Research and Practice: What We Learn about Fraud from Other Disciplines
    Practical Implications:

    While other fraud research syntheses focus primarily on research that has been published in accounting journals, this synthesis surveys academic literature from non-accounting publications related to fraud and financial crimes: (1) to better understand the nature and extent of fraud acts; (2) to share with accounting researchers and practitioners ideas, theories, variables, constructs, and research designs used in other fields that might inform anti-fraud research and actions in accounting; and (3) to highlight opportunities for future research. In this review and synthesis of the literature, the authors move beyond the fraud triangle to consider a broader spectrum of factors that researchers and practitioners may consider in an effort to provide a more complete perspective on fraud and related financial crimes.

    For more information on this study, please contact Gregory M. Trompeter.

    Citation:

    Trompeter, G., T. Carpenter, K. Jones, and R. Riley. 2014. Insights for Research and Practice: What We Learn about Fraud from Other Disciplines. Accounting Horizons 28 (4): 769-804.

    Keywords:
    asset misappropriation; fraud; fraudulent financial reporting; literature review
    Purpose of the Study:

    The authors survey academic literature from non-accounting publications related to fraud and financial crimes: (1) to better understand the nature and extent of fraud acts from the perspective of non-accounting research; (2) to share with accounting researchers and practitioners ideas, theories, variables, constructs, and research designs used in other fields that might inform anti-fraud research and actions in accounting; and (3) to highlight opportunities for future research. This project differs from other fraud research syntheses by examining a wider set of theoretical constructs. Indeed, the authors move beyond the fraud triangle and consider the findings of non-accounting research related to broader topics such as theft (by force rather than deception), the role of punishment, and others. Such topics provide insight into financial fraud and have the ability to inform practice and accounting research aimed at prevention, deterrence, and detection of fraud. The scope of the relevant research includes a review of approximately 30 journals that were identified by the Institute for Fraud Prevention in the fields of criminology, ethics, psychology, and sociology.

    Design/Method/ Approach:

    The authors review approximately 30 journals in the fields of criminology, ethics, psychology, and sociology for topics relevant to fraud. They synthesize this research using a framework that incorporates the fraud triangle, but also expands and refocuses one’s thinking about fraud by including additional factors: (1) organizational and societal interventions in the areas of deterrence and prevention, and (2) subsequent detection, investigation, consequences, and remediation of the criminal act once the crime has occurred. 

    Findings:
    • Similar to accounting research, the authors find considerable examination of the fraud triangle in non-accounting research. However, non-accounting researchers have examined neutralizations (justification before the fraud) and rationalizations (justification after the fraud) far more extensively.
    • With respect to anti-fraud measures, extant non-accounting literature offers additional insights into corporate governance and corporate culture, including the role of leadership and globalization.
    • In the area of detection, non-accounting research offers some scoring methodologies that might be helpful in more efficiently using red flags to detect fraud and insights related to interviewing for the detection of deception.
    • Non-accounting research offers insight into the criminal act, concealment, and conversion, well beyond the examination of those issues in accounting research. Nevertheless, the triangle of fraud action (i.e., the act, the concealment, and the conversion) remains largely unexplored.
    • Non-accounting researchers have studied the consequences of fraudulent acts far more extensively than accountants. However, effective investigation, remediation, and other consequences offer abundant opportunities for future research and insights for practice.
    Category:
    Risk & Risk Management - Including Fraud Risk
    Sub-category:
    Fraud Risk Assessment, Fraud Risk Models