SEC enforcement targets: a Christian virtue ethics perspective

Abstract

Purpose

The purpose of this paper is to provide a summary and synthesis of US Securities and Exchange Commission accounting and auditing enforcement release (AAER)-based research on financial misreporting firms and the firms’ management. Christian virtue ethics (CVE) is used as a framework for this review. Suggestions for future research are presented.

Design/methodology/approach

This is a review of the academic literature covering AAERs. The findings are viewed through the lens of CVE.

Findings

Several financial misconduct studies use samples developed from AAER targets. These studies commonly focus on specific characteristics of AAER targets. This paper presents and analyzes characteristics of AAER targets and considers how CVE may mitigate fraudulent reporting.

Research limitations/implications

The main limitation of the research is that the literature review is confined to studies of financial fraud that use an AAER-based sample. Nevertheless, the sample is sufficient to provide insight into the common characteristics of AAER target firms and related entities. The benefits of CVE are considered. This study has relevant implications for investors, regulators and researchers concerned with financial reporting quality, fraud, regulatory oversight and business ethics.

Originality/value

This paper provides a set of AAER target features and considers how CVE may mitigate financial fraud. Financial regulators, accounting standards setters and researchers may be interested in the findings presented in this study.

Citation

Demaline, C.J. (2020), "SEC enforcement targets: a Christian virtue ethics perspective", Journal of Financial Crime, Vol. 27 No. 4, pp. 1047-1059. https://doi.org/10.1108/JFC-03-2020-0046