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Accounting Fraud And Characteristics Of Company Executives: An Empirical Investigation

Listed author(s):
  • Maria BAXEVANI

    ()

    (Eastern Macedonia and Thrace Institute of Technology)

  • George MYLONAS

    ()

    (University of Sheffield)

Registered author(s):

    This study examines accounting fraud in relation to the characteristics of company executives. The study portrays the degree to which company as well as personal motives could urge an executive to commit fraud. Subsequently, we attempt to identify the degree to which certain socio-economic factors and the existence of strong internal audit mechanisms act as deterrence agents. Furthermore, we investigate the personal financial gain in relation to annual income as a motivator to commit fraud. Finally, we examine the optimal imprisonment duration as a deterrent and the overall probability to commit fraud. The research method was based in the distribution of a questionnaire and took place in the city of Thessaloniki and the region of West Macedonia and Thessaly. The participants were executives in the banking, financial and insurance sector. Our findings show that it is mostly personal factors that motivate an executive to commit fraud, but the fear of immediate legal sanctions and the existence of strong internal audit mechanisms are effective deterrence agents.

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    File URL: http://economic.upit.ro/repec/pdf/2014_2_4.pdf
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    Article provided by University of Pitesti in its journal Scientific Bulletin - Economic Sciences.

    Volume (Year): 13 (2014)
    Issue (Month): 2 ()
    Pages: 31-42

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    Handle: RePEc:pts:journl:y:2014:i:2:p:31-42
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    1. Karpoff, Jonathan M. & Scott Lee, D. & Martin, Gerald S., 2008. "The consequences to managers for financial misrepresentation," Journal of Financial Economics, Elsevier, vol. 88(2), pages 193-215, May.
    2. Feng, Mei & Ge, Weili & Luo, Shuqing & Shevlin, Terry, 2011. "Why do CFOs become involved in material accounting manipulations?," Journal of Accounting and Economics, Elsevier, vol. 51(1), pages 21-36.
    3. Polinsky, A Mitchell & Shavell, Steven, 1999. "On the Disutility and Discounting of Imprisonment and the Theory of Deterrence," The Journal of Legal Studies, University of Chicago Press, vol. 28(1), pages 1-16, January.
    4. Fich, Eliezer M. & Shivdasani, Anil, 2007. "Financial fraud, director reputation, and shareholder wealth," Journal of Financial Economics, Elsevier, vol. 86(2), pages 306-336, November.
    5. Ugrin, Joseph C. & Odom, Marcus D., 2010. "Exploring Sarbanes-Oxley's effect on attitudes, perceptions of norms, and intentions to commit financial statement fraud from a general deterrence perspective," Journal of Accounting and Public Policy, Elsevier, vol. 29(5), pages 439-458, September.
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