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CORPORATE AND ACCOUNTING FRAUD: TYPES, CAUSES AND FRAUDSTER’S BUSINESS PROFILE
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Michalis Bekiaris 
, Georgios Papachristou
Abstract
Fraud costs economy, businesses, investors and society more than $3 trillion every year. It is a serious problem that, after a series of corporate and accounting scandals, has recently received considerable attention. This essay reviews fraud concept and presents the main fraud schemes and causes that lead people to unethical behavior. We describe fraudster’s personal characteristics and discuss fraud evolution from 2004 to 2016, according to the Association of Fraud Examiners’ Reports to the Nations. This research is one of the few to focus on fraudster’s business profile using a weighted measure of impact in terms of likelihood. In this way, we contribute to the existing fraud literature providing useful information to professionals and academics to further explore firms’ internal environment characteristics that may affect fraudulent behavior. We find that asset misappropriation is the most frequent fraud scheme even if fraudulent financial statement is the most costly. Banking is the industry suffering the most from fraud after 2008; manufacturing experienced the most fraud cases before the financial crisis begins. Owners or executives generate the most high-impact fraud scandals, even if employees commit fraud more frequently. People working more than ten years at a corporation trigger the most severe damage as they have access to valuable information and have gained enough trust to overlap internal controls. Individuals between 41-60 years old seem to generate more damage reflecting their position and tenure within the organization. Our results show that organizational ethical culture and ethical “tone at the top” promoting and encouraging moral attitude are salient for fraud prevention.
Keywords: Fraud, Fraud Schemes, Fraud Consequences, Fraudster’s Business Profile, The Association of Certified Fraud Examiners
Received: 02.11.2017
Accepted: 12.12.2017
How to cite this paper: Bekiaris, M., & Papachristou, G. (2017). Corporate and accounting fraud: Types, causes and fraudster’s business profile. Corporate Ownership & Control, 15(1-2), 467-475. https://doi.org/10.22495/cocv15i1c2p15
