Rationalization of financial statement fraud in government: An Austrian perspective

Stalebrink, Odd J.; Sacco, John

doi:10.1016/j.cpa.2006.01.009

Cited by 41 publications

(60 citation statements)

References 26 publications

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“…It is through this interpretive frame, informed by broader social and institutional logic, that the financial markets may be viewed as criminogenic and prone to fraud. This is not so much the skilful use of motives, interests and incentive structures, but, rather, one of knowledge and knowledgeability, where, as the findings revealed, the perpetrators are calculative in their actions because they know the prospect of criminal persecution is minimal and choose to maximise their net utility through criminality for personal gain (Davis & Pesch, 2013;Morales et al, 2014;O'Connell, 2004;Ramamoorti, 2008;Rezaee, 2005;Stalebrink & Sacco, 2007).…”

Section: Discussion and Concluding Commentsmentioning

confidence: 99%

“…Rather, it is accorded an intelligibility informed by a broader purported rationality (PCBS, 2013d, p. Ev 434) that is rooted less in trigger points and their relative sensitivities vis-à-vis different forms of (mis)conduct (Williams, 2013), and more in specific taken-for-granted assumptions regarding the applications of accounting rules and principles (Bell & Carcello, 2000;Gabbioneta et al, 2013;Stalebrink & Sacco, 2007). These irregularities suggest that, despite the implicit forms of intelligibility invoked, the directors deliberately made a moral judgement to be complicit in signing off on the veracity of Welcome's financial statements, which they knew to be false and misleading.…”

Section: Rational Deliberationmentioning

confidence: 99%

“…In a manner analogous to the diagnostic project, these classifications, for the most part, coalesces around the notion that the predatory offender is "driven by need" (Donegan & Ganon, 2008, p. 3) and by virtue of being better organised, the lone-wolf offender will seek to make a decision that maximises his or her own net utility in each situation Davis & Pesch, 2013;Stalebrink & Sacco, 2007). This attributional stance posited "that actors weigh costs and benefits of wrongdoing and embark on fraud when they conclude that the benefits outweigh the costs" (Cooper et al, 2013, p. 442).…”

Section: Individual Decision Making and The Choice To Offend In Accoumentioning

confidence: 99%

“…This manifestation of fraud and fraud risks encourages auditors to look for fraud in areas where there are individual risks and shifts organisational surveillance to systems of controls (Gietzmann & Pettinicchio, 2014;Lokanan, 2015a;Power, 2013;Williams, 2013 The micro-epistemological framing serves to sustain a narrow conceptualisation of fraud and prevention (Stalebrink & Sacco, 2007). Many individuals are exposed to various pressures and opportunities to commit fraud but, despite this exposure, a significant number of them choose not to engage in fraudulent behaviour (Greve, Palmer, & Pozner, 2010;Lokanan, 2015a;Morales et al, 2014;Powers, 2013).…”

Section: Individual Decision Making and The Choice To Offend In Accoumentioning

confidence: 99%

“…As Donegan and Gagon (2008) put it, the interrelated dynamics of institutional and structural variables all contribute to offending behaviours. Given this interconnection, structural theorists argue that crime is socially constructed and as such, the macro-level variables must be incorporated into the explanation (Dedoulis, 2006;Gabbioneta et al, 2013;Morales et al, 2014;Stalebrink & Sacco, 2007). Lokanan (2015a) echoes Morales et al (2014) and Free and Murphy's (2015) positions in arguing that a macro-level analysis of crime will allow policymakers to focus on interventions that emphasise the development of human beings from inception, as they are caught up in a web of relations that antedates any individual acts of deviance.…”

Section: The Structural and Contextual Features Of Fraud In Accountinmentioning

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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