Do Personal Beliefs and Values Affect an Individual’s “Fraud Morality”? Evidence from the World Value Survey.

• In Event: Forensic Accounting

Abstract

We use World Value Survey data to introduce the concept of fraud morality and to explore its relationship with numerous constructs from social psychology. Applying partial least squares path modeling, we report that people with stronger self-enhancing (self-transcending) values exhibit lower (higher) fraud morality. Further, respondents who believe in the importance of hard work exhibit higher fraud morality, and such beliefs mediate the relationship between fraud morality and locus of control. Finally, we find that people who are prone to traditional gender stereotypes demonstrate lower fraud morality. We also document subtle differences in the influence of these social factors on fraud morality between age and gender groups. Our study contributes into research on fraud triangle, accounting ethics, and corporate governance. We extend the fraud triangle by including underlying factors behind rationalizations and pinpointing potential links with the “tone at the top” literature. Our insights could also facilitate the design of ethics courses and anti-fraud programs.

Authors

• Natalia Maksimovna Mintchik, University of Cincinnati

• W Robert Knechel, University of Florida