Psychological Pathways to Fraud: Understanding and Preventing Fraud in Organizations

In response to calls for more research on how to prevent or detect fraud (ACAP, Final Report of the Advisory Committee on the Auditing Profession, United States Department of the Treasury, Washington, DC, 2008; AICPA, SAS No. 99: Consideration of Fraud in a Financial Statement Audit, New York, NY, 2002; Carcello et al., Working Paper, University of Tennessee, Bentley University and Kennesaw State University, 2008; Wells, Journal of Accountancy, 2004), we develop a framework that identifies three psychological pathways to fraud, supported by multiple theories relating to moral intuition and disengagement, rationalization, and the role played by negative affect. The purpose of developing the framework is twofold: (1) to draw attention to important yet under-researched aspects of ethical decision-making, and (2) to increase our understanding of the psychology of committing fraud. Our framework builds on the existing fraud triangle (PCAOB, Consideration of fraud in a financial statement audit. AU Section 316, , 2005) which is used by auditors to assess fraud risk. The fraud triangle is composed of three factors that, together, predict the likelihood of fraud within an organization: opportunity, incentive/pressure, and attitude/rationalization. We find that, when faced with the opportunity and incentive/pressure, there are three psychological pathways to fraud nestled within attitude/rationalization: (1) lack of awareness, (2) intuition coupled with rationalization, and (3) reasoning. These distinctions are important for fraud prevention because each of these paths is driven by a different psychological mechanism. This framework is useful in a number of ways. First, it identifies certain insidious situational factors in which individuals commit fraud without recognizing it. Second, it extends our knowledge of rationalization by theorizing that individuals use rationalization to avoid or reduce the negative affect that accompanies performing an unethical behavior. Negative affect is important because individuals wish to avoid it. Third, it identifies several other methods fraudsters use to reduce negative affect, each of which could serve as potential “psychological red flags” and helps predict future fraudulent behavior. Finally, our framework can be used as a theoretical foundation to explore several interventions designed to prevent fraud.     

合作保护品牌

美国海关实施品牌保护涉及到海关程序的多个方面,但海关的执法程序主要包括两个阶段：扣押与没收。在这两个阶段里,商标所有人可以亲自参与执法过程,告知海关如何识别他们的品牌,并且收集有关非法流入美国的伪造品信息。     

Some causes of interstate differences in community bank performance

This study assesses the relationship between the performance of community banks and conditions in their marketplaces over the 1994–2008 period. A panel model is used, in which the states serve as the panels, and focuses on banks termed community financial institutions (CFIs). Bank performance is measured by the return on assets (ROA). The ROAs are averaged for all CFIs in each state. Statewide ROAs are related to each state’s economic, demographic, and market structure characteristics. These state-level characteristics explain some of the variations in the performance of each state’s CFIs over time, and results are economically and financially reasonable. Fixed effects play a role, linking each state’s performance to unidentified factors unique to each state. The mild (but statistically significant) explanatory power of the economic/demographic variables suggests that CFI managers can effectively deal with economic/demographic changes in their marketplace, in contrast to the troubles of big banks.     

Looking through Outdoor Advertising Images for Beauty in Argentina,Chile, Hungary,and Romania

This investigation expands scholarship on beauty and cross-cultural communication through the unique perspective of outdoor advertising. With a content analysis method 1,700 portrayals of men and women in outdoor advertisements, from four different cultures, including Argentina, Chile, Hungary, and Romania, were examined through a framework of advertising and consumer culture, globalization, and theories of beauty. The findings reveal differences across cultures and that beauty ideals are culture specific. Implications are important for practitioners in marketing communications to better understand subtle cultural variations in order to develop effective promotional programs required in the globalized economy.     

LIVING RATIONALLY UNDER THE VOLCANO? AN EMPIRICAL ANALYSIS OF HEAVY DRINKING AND SMOKING*

This study investigates whether models of forward‐looking behavior explain the observed patterns of heavy drinking and smoking of men in late middle age in the Health and Retirement Study better than myopic models. We develop and estimate a sequence of nested models that differ by their degree of forward‐looking behavior. Our empirical findings suggest that forward looking models fit the data better than myopic models. These models also dominate other behavioral models based on out‐of‐sample predictions using data of men aged 70 and over. Myopic models predict rates of smoking for old individuals, which are significantly larger than those found in the data on elderly men.