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Corporate Fraud and Managers’ Behavior: Evidence from the Press

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Abstract

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.

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Authors and Affiliations

  1. Accounting Department, Carroll School of Management, Boston College, Fulton Hall 544, 140 Commonwealth Avenue, Chestnut Hill, MA, 02467, U.S.A.

    Jeffrey Cohen

  2. Finance and Accounting Department, China Europe International Business School (CEIBS), 699 Hongfeng Road, Pudong, Shanghai, 201206, People’s Republic of China

    Yuan Ding

  3. Department of Accounting and Management Control, HEC Paris, 1, rue de la Libération, 78351, Jouy-en-Josas, France

    Cédric Lesage & Hervé Stolowy

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  1. Jeffrey Cohen
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  2. Yuan Ding
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  3. Cédric Lesage
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  4. Hervé Stolowy
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Correspondence to Hervé Stolowy.

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Cohen, J., Ding, Y., Lesage, C. et al. Corporate Fraud and Managers’ Behavior: Evidence from the Press. J Bus Ethics 95 (Suppl 2), 271–315 (2010). https://doi.org/10.1007/s10551-011-0857-2

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