Accounting fraud, business failure and creative auditing: A micro-analysis of the strange case of Sunbeam Corp
AbstractThis paper puts under the magnifying glass the path to failure of Sunbeam Corp. and emphasizes the reasons of its singularity and exceptionality. This corporate case emerges as an outlier from the analysis of the US fraud cases mentioned by WebBRD: the consideration of the time between fraud disclosure and the final bankruptcy reveals the presence of an exceptional sampled case. In fact, the maximum value of this temporal variable is estimated equal to 840 days: it is really far from the range estimated by the survival function for the entire sample and it refers to Sunbeam Corp. Different hypotheses are evaluated in the paper, starting from the consideration of Sunbeam's history peculiarities: fraud duration, scapegoating and creative auditing represent the three main points of analysis. Starting from a micro-analysis of this case that the SEC investigated in depth and this work describes in detail, inputs for future research are then provided about more general problems concerning auditing and accounting fraud.
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Bibliographic InfoPaper provided by Department of Management, Università Ca' Foscari Venezia in its series Working Papers with number 12.
Length: 40 pages
Date of creation: Sep 2012
Date of revision: Mar 2013
accounting fraud; failure path; creative auditing; historical micro-analysis;
Find related papers by JEL classification:
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
- M42 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Auditing
- N80 - Economic History - - Micro-Business History - - - General, International, or Comparative
- N82 - Economic History - - Micro-Business History - - - U.S.; Canada: 1913-
- M48 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-09-30 (Accounting & Auditing)
- NEP-ALL-2012-09-30 (All new papers)
- NEP-HIS-2012-09-30 (Business, Economic & Financial History)
- NEP-HME-2012-09-30 (Heterodox Microeconomics)
- NEP-IUE-2012-09-30 (Informal & Underground Economics)
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