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Associations between internal controls and organizational citizenship behavior (*).

In his landmark book, The Functions of the Executive (1938), Barnard stated that organizational moral behavior is obtained only through a cooperative effort among all employees. Top management, however, is obligated to carry the moral freight (Perrow, 1986) and must communicate a shared sense of moral purpose to employees (Barnard, 1938). This admonition that top management must motivate rather than rely upon employees to behave ethically may still apply today. The degree to which management supports adherence to certain standard operating procedures and internal control measures can communicate management's expectations of moral behavior by all employees, itself included.

In contrast, lax management attitudes, particularly toward internal controls, have frequently been linked to fraud and its detection (Vinten, 1992; Irvine and Lindsay, 1994; Hooks et al., 1994). A report issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO, 1992) stated that management concerns for effective internal control must "permeate" the organization. Controllers responding to a survey (Irvine and Lindsay, 1994) agreed ethically-oriented behavior in an organization is a broad-based management responsibility, and that as part of a management team, controllers had to model such behavior. Based upon a comprehensive review of the literature, Hooks et al. (1994) further suggested that codes of conduct have little impact if not enforced. That is, when top management displays "willful ignorance, [it] sends a powerful message that it will tolerate [wrongdoing]" (Thompson, 1993: 64). More recently, fraud researchers have cautioned auditors to be especially vigilant in assessing the "tone at the top" (Beasley et al., 1999: 13) and control weaknesses (Hillison et al., 2000). Lax attitudes by management may contribute to a lack of employee conscientiousness and therefore to an environment which allows or perhaps even encourages fraudulent activity, while it discourages the reporting of such activity. In contrast, positive or supportive ethical attitudes modeled by management may encourage employee conscientiousness, a contributing factor in organizational citizenship behavior such as reporting fraudulent activity.

The purpose of the current study is to determine (1) whether fraud schemes differ depending upon the attitude of management regarding controls, (2) whether detection of such schemes differs based upon attitude, and (3) whether outcomes differ based upon attitude. As a framework for this investigation, we utilized an expanded definition of organizational citizenship behavior that includes employee moral behavior, linking it to attitudes of top management. In this article, we discuss organizational citizenship behavior, explain research questions of interest, then discuss the results of the study and suggest areas of future research.

Organizational Citizenship Behavior

Organ (1988, 1990, 1994) originally concluded that organizational citizenship behavior (OCB) is extra-role behavior that is not formally recognized or rewarded by the organization. Dimensions of OGB include altruism (helping behaviors), courtesy (behaviors preventing problems with others at work), sportsmanship (behaviors indicating willingness to go along with few complaints), civic virtue (behaviors reflecting concern for firm), and conscientiousness (behaviors that go beyond simply obeying rules). Schnake et al. (1995) found that leadership behavior of managers might have more control over employee OGB than previously thought.

Van Dyne et al. (1994) redefined the OGB construct, broadening the set of specific behaviors and offering a more complex model with three factors: (1) loyalty: allegiance to an organization and its leaders, (2) obedience: acceptance of the need for rules and regulations to govern the organization, and (3) participation: full and responsible involvement in organizational governance while guided by "ideal standards of virtue" (1994: 767). In addition, Van Dyne et al. (1994) observed three distinct dimensions of participation: (1) social (non-controversial interactions with other organizational members), (2) advocacy (controversial behavior targeted at other members), and (3) functional (behaviors in which individuals focus on themselves but contribute to organizational effectiveness). Three basic types of antecedents affect OCB: personal factors (e.g., low cynicism), perceived situational factors (e.g., job characteristics), and positional factors (e.g., job level). A mediating factor is whether a covenantal re lationship emphasizing trust and shared values exists between the organization and the employee.

In their exploratory research, Van Dyne et al. found a specific whistle-blowing behavior related to ethical values; namely, employee reporting of wrongdoing by others is associated with both a sense of loyalty to the organization and also advocacy participation. That is, the person identifies with the organization (loyalty) and shows a willingness to challenge others (advocacy participation). In addition, a second behavior related to ethical values--employee uses professional judgment to assess right and wrong for the organization--was related to advocacy participation. These behaviors are an extension of the original OCB factor of conscientiousness.

Related Literature

In a study investigating relationships among leadership, OCB, and moral development of organizational members, Graham found "transforming leadership that both models and nurtures servant leadership abilities" is associated with the highest levels of moral development and OCB (1995: 43). That is, organizational members sought ethical solutions to moral dilemmas, kept informed about issues of organizational importance, and gave decision makers information about organizational practices. Graham concluded that servant leaders serve followers best when they not only model independent moral reasoning but also encourage others to engage in it and to participate in organizational governance (1995). In a study related to the issue of participation, Gostigan et al. stated that the "essential ingredient of collaborative effort is trust" (1998: 303). The results of their study indicated that "affect-based" trust (involving deep emotional investment) might be linked with employee assertiveness, the ability to speak candid ly, a definition very close to that of advocacy participation in the OCB model. In addition, Howell and Avolio, discussing charismatic leaders, maintained ethical leaders are those who promote a value system that encourages followers to challenge the status quo (also similar to "advocacy participation" in OCB), thus keeping both followers and leaders "from straying down the wrong path" (1992: 50). In contrast, unethical charismatic leaders have dependent and compliant followers, who learn to rationalize their immoral behavior. These leaders manage to convince followers that immoral behavior is justified.

Hirschman suggested that loyal members might alter their belief systems regarding discrepant acts when exit is not an option, or may voice concerns when they believe they can wield influence (1970). Therefore, these members weigh possible consequences of actions, given their circumstances, and adjust their behavior accordingly. In a comprehensive review of whistleblowing research, Mie-the concluded firms frequently send mixed messages regarding whether they actually encourage such behavior and that whistleblowers themselves are motivated by a combination of altruism and self-interest (1999). Finally, Jones stated firms with "opportunistic vocabularies will enhance the opportunistic tendencies of employees; firms with moral vocabularies will nurture the moral tendencies of employees" (1995: 419). This statement echoes the much earlier admonition of Cressey (1953), who noted that frauds occur in an organization when the perpetrator, who lacks the moral strength to resist temptation, is offered an opportunity to commit an offense.

Research Questions

For purposes of our study, we maintain that a strong attitude by management supporting tight internal accounting controls strengthens the following factors in organizational citizenship behavior: employee allegiance (loyalty), cooperation (obedience), and conscientiousness (participation). That is, a strong, supportive, ethical attitude by top management discourages unethical activity and encourages the reporting of such illicit activities. A lax attitude by top management encourages unethical activity and discourages the reporting of it. We also suggest opportunities to engage in unethical behavior within an organization differ as a result of the kind of attitude demonstrated by top management (Cressey, 1986; AICPA, 1988a, 1988b, 1997). The unethical behavior of interest is the commission of fraud. That is, frauds that were uncovered in organizations where management had implemented and supported internal control systems (i.e., "SUPPORTIVE") are contrasted with frauds that occurred in organizations where ma nagement displayed a lax attitude toward internal controls ("LAX"). Results hold implications regarding the impact of management attitude on OCB in general and on the occurrence and reporting of fraudulent activity specifically. We now ask the following research questions:

Research Question 1: Perpetrator Role

Does the relationship of the fraud perpetrator to the victim organization differ between LAX organizations and SUPPORTIVE organizations? The associated hypotheses are as follows:

[H1.sub.0]: No difference exists between LAX and SUPPORTIVE organizations in the proportion of fraud perpetrators who work inside the victim organization.

[H1.sub.a]: The proportion of fraud cases committed by insiders is greater in LAX organizations than in SUPPORTIVE organizations.

Research Question 2: Fraud Schemes

Does the nature of fraud schemes differ between LAX organizations and SUPPORTIVE organizations? The associated hypotheses are as follows:

[H2.sub.0]: No difference exists between LAX and SUPPORTIVE organizations in the pervasiveness of fraud schemes.

[H2.sub.a]: The proportion of fraud cases committed by perpetrators operating in collusion is greater in LAX organizations than in SUPPORTIVE organizations.

[H2.sub.b]: The proportion of fraud cases is greater in LAX organizations than in SUPPORTIVE organizations across all account categories.

[H2.sub.c]: The proportion of fraud cases is greater in LAX organizations than in SUPPORTIVE organizations across all methods of exploitation.

Research Question 3: Fraud Detection

Does the source of fraud detection differ between LAX organizations and SUPPORTIVE organizations? The associated hypotheses are as follows:

[H3.sub.0]: No difference exists between LAX and SUPPORTIVE organizations in the source of fraud detection.

[H3.sub.a]: The proportion of fraud cases reported by whistleblowing insiders is greater in SUPPORTIVE organizations than in LAX organizations.

[H3.sub.b]: The proportion of fraud cases having "red flags" such as noticeable life style changes or financial anomalies associated with the perpetrator(s) will be greater in LAX organizations than in SUPPORTIVE organizations.

Research Question 4: Fraud Outcomes

Does the outcome for the perpetrator differ between LAX organizations and SUPPORTIVE organizations? The associated hypotheses are as follows:

[H4.sub.0]: No difference exists between LAX and SUPPORTIVE organizations in the resolution of fraud cases.

[H4.sub.a]: The proportion of fraud cases in which perpetrators were prosecuted will be greater in SUPPORTIVE organizations than in LAX organizations.

Method

Overall Design

A four-page questionnaire was distributed via mail to 8,000 active members of the Association of Certified Fraud Examiners (ACFE). ACFE members are from varied occupations, including internal accountants, external auditors, and law enforcement, and are employed in a wide range of industries and government entities. All ACFE members have received formal training in the prevention, detection, and control of white-collar crime. Each member was asked to describe one instance of fraud about which (s)he had specific knowledge. Six dimensions were covered in-depth: fraud victim, fraud perpetrator, scheme characteristics, detection methods, subsequent investigation techniques, and outcomes of the fraud investigation. In addition, in a section regarding weaknesses in internal controls, respondents provided a description of management attitude toward such controls--SUPPORTIVE or LAX.

Members returned 2,673 instruments. After duplicates, incomplete questionnaires, tax frauds, and miscellaneous non-embezzlement frauds were eliminated, a total of 2,646 independent instruments remained which were subsequently utilized in the analysis reported in this article (33.1% response rate). Based upon respondents' characterizations, we divided the reported fraud cases for further analysis into two groups, SUPPORTIVE (41%) and LAX (59%).

Ratio scale data obtained from the questionnaires tended to be highly skewed, and were tested using non-parametric means. The Median (Brown-Mood) test was used to measure significant differences among dollar assets, dollar sales, number of employees, and dollar losses. Contingency tables were constructed to calculate Chi-square statistics to test the significance among the other nominal scale data.

Results

Demographics

Table 1 provides an overview of the fraud cases analyzed in this study.

Over two-thirds of the frauds (70.9% in LAX organizations and 74.1% in SUPPORTIVE organizations) occurred in the financial, public administration, and service sectors. Nevertheless, no type of firm appears to be immune from fraud. In fact, similarities in physical characteristics of SUPPORTIVE and LAX victim organizations suggest that neither environmental circumstances nor structural differences can be used to explain any differences noted in fraudulent behavior and outcomes. Fraud victim organizations were similar in terms of assets, sales, number of employees, and percentage publicly traded. Further, similarities in the presence of both internal and external auditors indicate auditor involvement cannot explain differences in frauds. Therefore, we now look at results regarding the four research questions to determine whether management attitude is associated with differences in frauds.

Research Question 1: Perpetrator Role

The findings regarding Research Question 1, which posited that differences in the relationship of the fraud perpetrator to the victim organization were associated with differences in management's attitude toward internal controls, are summarized in Table 2. The demographic characteristics of the perpetrators in SUPPORTIVE and LAX organizations were similar in terms of gender, marital status, age, and educational level. The typical perpetrator was a middle-aged, married male. As hypothesized, both management-level and non-management-level employees of the victim organization perpetrated a significantly greater proportion of the frauds uncovered in LAX organizations. In contrast, SUPPORTIVE organizations, in which management supported internal controls, were more often victimized by individuals external to the firm, such as customers, agents, or other corporations. Vendors represented the only outsider group that more frequently victimized LAX organizations. Additional analysis of the data revealed that vendor -related fraud often involved collusion with either management or non-management employees of the firm, however.

Research Question 2: Fraud Schemes

Research Question 2 posited that differences in the nature of schemes devised to implement frauds would be associated with differences in the attitudes displayed by management toward internal controls. The findings regarding this question are shown in Table 3. As hypothesized, fraud schemes in LAX organizations were more pervasive. A total of 23.5% of the fraudulent activities in LAX organizations involved collusion compared to 18.5% in SUPPORTIVE organizations. The proportion of frauds in ten of the sixteen account categories was significantly greater in LAX firms than in SUPPORTIVE. The proportion of frauds in all methods of exploitation was significantly greater in LAX firms than in SUPPORTIVE firms. For example, over one-half of the perpetrators in LAX firms overrode existing controls, two-thirds exploited untrained personnel or inadequate asset safeguards, and three-fourths initiated direct violations of a variety of internal control principles, such as lack of separation of duties, improper transaction authorization, and failure to require appropriate supporting documentation. In contrast, less than a third of the cases in SUPPORTIVE organizations were a result of the perpetrator overriding existing controls. The exploitation of inadequate controls occurred less frequently as well. The data suggest that while the dollar losses of the two groups were similar, many of the perpetrators in LAX organizations used multiple schemes in committing the crimes (and also targeted more accounts) more than perpetrators in SUPPORTIVE organizations.

Research Question 3: Fraud Detection

The findings regarding Research Question 3, which pertains to the detection of the fraudulent acts, are provided in Table 4. The hypothesis that more of the suspicions raised and/or complaints generated would come from whistleblowing insiders in SUPPORTIVE firms than in LAX was not supported. Unexpectedly, LAX organizations had a significantly greater proportion of internal whistleblowers (45.6% of cases) compared with SUPPORTIVE (40.1%). However, the hypothesis that a greater proportion of frauds having "red flags" would occur in LAX firms than in SUPPORTIVE was partially supported. Red flags involving life style changes occurred in 17.1% of LAX cases compared with 12.5% of SUPPORTIVE.

Research Question 4: Fraud Outcomes

The results related to Research Question 4, which addresses the punishment meted out to the perpetrators, are shown in Table 5. The hypothesis that SUPPORTIVE firms would have a higher proportion of cases in which perpetrators were prosecuted was not supported. Both LAX and SUPPORTIVE organizations prosecuted a little over half of the perpetrators. However, somewhat surprisingly, LAX organizations were more likely to formally terminate the relationship with perpetrators or to transfer them elsewhere than were SUPPORTIVE organizations.

Discussion

Every case examined in this research involved an actual fraud. We examined whether the nature and characteristics of these frauds differed depending upon top management's attitude (supportive or lax) toward internal controls. We interpreted this attitude as communicating expectations of ethical or ganizational citizenship behavior to all levels of employees.

A possible limitation to the study is that the categorization of a firm as either SUPPORTIVE or LAX and characteristics of the fraud were derived from the assessment of a single individual, whose perceptions may not mirror reality. However, we note that each person completing the survey had been specifically trained to detect, investigate, and dissect frauds and provided information on a fraud about which they had personal knowledge (frequently as an auditor). In addition, the formal training provided by their professional association emphasizes the meaning of "lax" attitudes and their consequent contribution to fraud perpetration, both through formal literature review and through illustrative descriptions of actual fraud schemes. Therefore, while respondents were neither perpetrators nor victims of the reported frauds themselves, they possessed expertise and detailed knowledge of the frauds they reported. Also, the number of cases involved in this study should mitigate the limitation of faulty reporting.

With these limitations in mind, we believe the study identified several interesting differences in the characteristics of fraud in association with management's attitude toward the internal control system in place. The Van Dyne et al. (1994) organizational citizenship behavior model implied that fraud characteristics should be affected by the degree to which management exhibits a commitment to establishing a strong code of conduct for the organization and creates an atmosphere of loyalty among employees for protection of the firm's assets.

Results generally supported the hypotheses forwarded from the research questions along these lines. Employees whose managers supported internal controls demonstrated greater loyalty, cooperation, and conscientiousness than those whose managers did not.

Specifically, data indicated both management and non-management employees, rather than outsiders, were more likely to be perpetrators of fraud in organizations where management displayed lax attitudes toward internal controls. This lax attitude establishes a fertile field within which fraudulent activity can take root. As results indicated, where management attitude was lax, more managers themselves engaged in fraudulent activity. In addition, results suggested perpetrators recognized and took advantage of many existing avenues in LAX organizations to advance their schemes, including collusion with outsiders. As might be expected, given the greater number of opportunities, more red flags were raised in LAX organizations before the fraud was detected. Unsurprisingly, perpetrators in LAX organizations also exploited the fastest growing type of white-collar crime, computer information systems fraud. No doubt, perpetrators were exploiting the vulnerability of firms storing more data electronically. Indeed, a sep arate study of this data set indicated that with computer involvement the complexity of the fraud increased, significantly more red flags were present before the crime was detected, and more investigative steps were required (Welch et al., 2000).

We were surprised by some unexpected results regarding fraud detection and outcomes. We had reasoned that strong commitment by management to ethical standards would result in more whistleblowing as a type of advocacy participation. Data supported the opposite conclusion. Perhaps, in LAX organizations, the honest employee was frustrated with the unwillingness of management to exercise control over fraudulent activities. Conversely, the lower rate of whistleblowing by employees in organizations with supportive attitudes toward internal controls may indicate that either the controls themselves were flagging the violations, or the employees may have trusted the controls to detect fraud. Indeed, Fletcher et al. (1998) support this rationale based upon a case study in the hospital industry.

Equally surprisingly, the data indicated that organizations with lax attitudes prosecuted perpetrators at the same rate as organizations that supported internal controls. In addition, LAX organizations were more likely to fire or transfer the perpetrator. Perhaps, management's decision to terminate its relationship with the perpetrator was intended to serve as a preventive measure for discouraging other frauds in lieu of depending upon internal controls. Also, LAX management may have been attempting to avoid publicity by "sweeping" the problem away, as evidenced perhaps by the disparity between termination rates and prosecution rates.

Research Directions

In order to provide a better understanding of connections between OCB and fraud characteristics, future researchers might address the following question: What is the relationship between characteristics of the top management team and lax or supportive behavior toward internal controls? Hambrick (1995) suggested all management teams must overcome group fragmentation. If team members operate in independent spheres with minimal interaction, they will be unable to engage in the internal exchange and mutual adjustment needed to decide and execute company-wide actions. A connection might exist between excessive fragmentation and lax internal controls. Indeed, other researchers posit top management team characteristics can neutralize or enhance any relationship existing between external antecedent factors (e.g., industry culture), internal antecedent factors (e.g., organizational structure and control systems), and corporate criminal activity (Daboub et al., 1995).

Another research question might be: What is the relationship between management attitudes toward internal controls and the organization's system of incentives and sanctions? Jones (1995) stated the moral sentiments of a firm's leaders are reflected in the firm's system of employee rewards and punishments, and the degree to which the system is enforced. This system may be a part of the covenantal relationship between the organization and the employee and would mediate between employee characteristics and OCB. Indeed, if leaders choose to enforce the system through extremely close monitoring of employees (e.g., surveillance), they risk eroding mutual trust between leaders and employees who may then engage in opportunistic behavior. A supportive attitude toward internal controls would suggest unambiguous policies and procedures that are perceived to be fair and equitably administered. Indeed, Schnake and Dumler (1997) concluded from their study on reward practices and OCB that employees do perceive a link betwe en organizational reward practices and OCB.

A third research question might be: What is the relationship between OCB and organizational effectiveness over time? Organ, the original definer of OCB noted, "it no longer seems fruitful to regard OCB as extrarole [behavior]" (1997: 85). That is, consistent messages by management regarding expectations of OCB as in-role behavior, including conscientious behavior, should result in increases in long-term effectiveness.

Conclusion: Managerial Implications

Results of this study indicate that employees will engage in OCB if top management is firm in its expectation of ethical behavior of all employees, including themselves. Internal perpetrators and fraud pervasiveness are less likely in firms in which top management firmly supports internal controls. As white-collar crime continues to grow, especially in computer technology, ever tighter internal controls will be needed. Management must display visible support for these new control systems, provide adequate training, and promote user involvement in order to create acceptance (McGowan and Klammer, 1997). However, internal control systems need to include not just accounting or information systems control, but also ethical behavior "control" by top management's consistently encouraging and rewarding advocacy participation and conscientiousness. Such consistency builds trust. Trust increases employee identification with the organization and the likelihood of continued organizational citizenship behavior. Barnard's admonition to top management to communicate a shared sense of a moral purpose is perhaps even more important today than it was over sixty years ago.
Table 1

Characteristics of Victim Organizations

 LAX SUPPORTIVE

Number of Cases 1,569 1,077
$ Assets (median, in millions) 200 200
$ Sales (median, in millions) 100 93
# Employees (median) 800 800
Publicly Traded (%) 53.4 48.5
Industry (%)-
 Construction 2.1 1.2
 Extraction 2.1 1.9
 Finance, Insurance, Real Estate (**) 29.0 40.3
 Manufacturing 8.1 6.7
 Public Administration (**) 27.1 20.8
 Services 14.8 13.0
 Transportation, Utilities 6.7 7.3
 Wholesale, Retail 4.8 5.5
 Internal Audit Department (%) 67.5 64.0
 External Auditor (%) 71.5 71.0

(**) significant at < .01
Table 2

Characteristics of Perpetrators

 LAX SUPPORTIVE

Number of Gases 1,569 1,077

Demographics (% of Details Provided):
 Gender-
 Male 74.2 71.0
 Female 25.8 29.0
 Marital Status-
 Married 75.2 72.9
 Unmarried 24.8 28.0
 Education Level-
 High School 42.9 44.3
 College 57.1 55.7

Perpetrator Age (mean) 41.7 41.6

Perpetrator Role (%):
 Owner (**) 4.7 7.1
 Employee (1)
 Management (**) 34.1 24.2
 Non-management (**) 47.4 40.8
 Vendor (**) 17.1 12.9
 Customer (**) 8.9 13.5
 Agent (**) 2.7 5.0
 Other Corporation or Person (**) 6.8 11.2

(**) significant at <.0]

(1) Because of the length of the survey (four pages), we utilized only
these two categories. Thus, the respondent had to judge where to put
middle management. Regardless of initial categorization, employees
combined committed fraud in greater proportions LAX organizations
(81.5%) than in SUPPORTIVE (65%).
Table 3

Characteristics of Fraud Schemes

 LAX SUPPORTIVE

Number of Cases 1,569 1,077

$ Amount of Loss (Median in 000's) 150 130
Loss Reflected in (% of Cases):

 Assets-

 Cash 47.6 43.9
 Accounts Receivable (**) 20.1 14.7
 Inventory (**) 19.5 14.5
 Fixed Assets (*) 7.1 5.1
 Investments 7.4 8.3
 Other Assets 10.1 12.3

 Liabilities-

 Accounts Payable (**) 17.9 14.1
 Other Liabilities 7.1 9.7

 Revenues-

 Sales Revenues (**) 19.4 14.1
 Services Revenues 6.7 5.4
 Other Revenues (**) 13.6 10.2

 Expenses-

 Purchases of Supplies (**) 23.3 14.5
 Purchases of Services (**) 20.8 13.2
 Wages (**) 11.9 8.6
 Travel and Entertainment (**) 13.3 8.3
 Other Expenses 9.5 11.8

Accounts Involved (avg. number of) (**) 2.6 2.2
Duration of Scheme (avg. number of months) 28.9 27.8

Methods Used in Scheme (% of Cases):

 Override Existing Controls (**) 50.5 30.0
 Exploit Computer Technology (**) 21.6 15.5
 Newly Computerized System (**) 13.6 9.4
 Alter Computer Records (**) 11.6 7.9
 Exploit Lack of Separation of Duties (**) 75.8 29.5
 Authorize Unsanctioned Activity (**) 75.7 19.4
 Exploit Untrained Personnel (**) 66.2 11.1
 Exploit Lack of Asset Safeguards (**) 64.7 15.1
 Manipulate Documentation (**) 75.1 18.2
 Exploit Failure to Perform Inventories (**) 62.2 15.3

Incidence of Collusion (**) 23.5 18.5

(*.) significant at <.05

(**.) significant at <.01
Table 4

Detection of Fraud Schemes

 LAX SUPPORTIVE

Number of Cases 1,569 1,077
Initial Detection By (% of Cases):
 Internal Audit 17.1 19.7
 External Audit 10.5 9.5
 Suspicions/Complaints-
 Inside Organization (**) 45.6 40.1
 Outside Organization 22.0 23.9
 Law Enforcement 1.3 2.5
 IRS/State Revenue 1.6 1.9
 Other 1.9 2.4
Red Flags Raised:
 Total Number in Case (mean) (**) 3.1 2.1
 Percentage of Cases (%)-
 Lifestyle Changes (**) 17.1 12.5
 Financial Anomalies 27.7 22.8

(**) significant at < .01
Table 5

Outcome of Fraud Schemes

 LAX SUPPORTIVE

Number of Cases 1,569 1,077

Resolution (avg. number of months) 8.5 8.2

Outcome for Perpetrator (% of cases):
 Terminated (**) 66.0 54.9
 Transferred (**) 26.3 21.7
 Settled 15.4 15.5
 Prosecuted- 55.4 55.8
 Acquitted 1.7 1.0
 Convicted 42.9 39.9

(**) significant at < .01


(*.) The authors thank the Association of Certified Fraud Examiners for their generous support of this project.

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Author:Holmes, Sarah A.; Langford, Margaret; Welch, O. James; Welch, Sandra T.
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Date:Mar 22, 2002
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