Management Accounting Section Midyear Meeting

The Importance of Social Mechanisms in the Commission of or Resistance to Group Fraud: A Field Study

• In Event: Fraud/Misreporting

Abstract

We analyze 19 stories from individuals who committed group fraud and 19 from those who resisted pressure to commit group fraud. Our goal is to better understand the control mechanisms that helped push people toward or against group fraud. Our theoretical lens highlights the implications of the social nature of “group” fraud and classifies the mechanisms we examine into social and administrative mechanisms. Social mechanisms are based on the influence of others (e.g., culture, mentorship) while administrative mechanisms are based on rules and policies (e.g., reward systems). We find that social mechanisms are significantly more influential than administrative mechanisms in pushing individuals toward the commission of and resistance to group fraud. Leveraging Qualitative Comparative Analysis, we also identify combinations of control mechanisms that commonly lead to the commission of and resistance to group fraud. Our field study enriches group fraud literature and identifies control mechanisms in which practitioners should invest.

Authors

• Pujawati M. Gondowijoyo, Queen's University - Kingston

• Christie Hayne, University of Illinois at Urbana-Champaign

• Pamela R. Murphy, Queen's University