The enigma of fraud as a unique crime and its resonance for auditing research and practice: unlearned lessons of psychological pathways to fraud
Journal of Accounting & Organizational Change
ISSN: 1832-5912
Article publication date: 29 February 2024
Abstract
Purpose
This study aims to observe people’s decisions to commit fraud. This study is important in the current time because it provides insights into the development of fraudulent intentions within individuals.
Design/methodology/approach
The information used in this study is derived from semi-structured interviews, conducted with 16 high-ranking officials who are employed in Indonesian local government positions.
Findings
The study does not have strong evidence to support prior studies assuming that situational factors or social enablers have direct effects on fraud intentions. As suggested, individual factors which are related to moral reasoning (moral judgment and rationalisation) emerge as a consequence of social enablers. The significant role of that moral reasoning is to rationalise any fraud attempt as permissible conduct. As such, when an individual is capable of legitimising his/her fraud attempt into appropriate self-judgement, s/he is more likely to engage in fraudulent behaviours.
Practical implications
This study offers practical prescriptions in guiding the management to develop strategies to curb fraudulent behaviours. The study suggests that moral cognitive reasoning is found to be a parameter of whether fraud is an acceptable option or not. So, an understanding of observers’ moral reasoning is helpful in predicting the likelihood of fraud within an organisation or in detecting it.
Originality/value
This study provides a different perspective on the psychological pathway to fraud. It becomes a complement work for the fraud triangle to explain fraudulent behaviours. Specifically, it provides crucial insights into the underlying motivations that lead individuals to accept invitations to engage in fraudulent activities.
Keywords
Acknowledgements
The authors extend the sincere gratitude to the editor-in-chief, associate editor and two anonymous reviewers for the invaluable comments and feedback on the paper. The insights have proven to be exceptionally beneficial in enhancing the quality of our work, and the authors are truly appreciative of the efforts. The guidance has been instrumental in shaping the improved version of the paper.
Since submission of this article, the following author has updated their affiliation: Ach Maulidi is currently working at the Accounting Department, University of Surabaya, Surabaya, Indonesia.
Citation
Maulidi, A. (2024), "The enigma of fraud as a unique crime and its resonance for auditing research and practice: unlearned lessons of psychological pathways to fraud", Journal of Accounting & Organizational Change, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAOC-04-2023-0076
Publisher
:Emerald Publishing Limited
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