The roles and interplay of enforcers and auditors in the context of accounting fraud: a review of the accounting literature

Abstract

PurposeThis study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.Design/methodology/approachThis literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.FindingsThe study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.Research limitations/implicationsThis study outlines directions for future accounting research on fraud.Practical implicationsThe analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.Originality/valueThis study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.

Predicting Risk of and Motives behind Fraud in Financial Statements of Jordanian Industrial Firms Using Hexagon Theory

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The Role of Forensic Accountants in Fraud and Corruption Cases and Its Impact on Business Development: The Case of Saudi Arabia

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Detection Accounting Fraud: Role Internal Auditor and Whistleblowing Data System in Study Literature

“…Conversely, good auditor supervision and law enforcement can reduce the incentives and possibility of accounting fraud. This impacts an important component of the fraud triangle model, which describes the environment that supports fraud (Campa et al, 2023).…”