financial misconduct
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Author(s):  
Patrick Velte

AbstractIn this article, we review recent archival research articles (98 studies) on the impact of corporate governance on restatements, enforcement activities and fraud as corporate financial misconduct. Applying an agency-theoretical view, we mainly differentiate between four levels of corporate governance (group, individual, firm, and institutional level). We find that financial restatements on the one hand and the group and individual level of corporate governance on the other hand are dominant in our literature review. Enforcement actions and fraud events as misconduct proxies, and the firm and institutional level of corporate governance are of lower relevance yet. The following review highlights that many studies on corporate governance find inconclusive results on firms’ financial misconduct. But there are indications that board expertise and especially gender diversity in the top management decreases firms’ financial misconduct. We know very little about the impact of non-shareholder stakeholders’ monitoring role on misconduct yet. In discussing potential future research, we emphasize the need for a more detailed analysis of misconduct proxies, recognition of moderator and especially mediator variables, especially in the interplay of the board of directors and external auditors.


2021 ◽  
pp. 199-220
Author(s):  
Crawford Gribben

This concluding chapter reflects on the decline of Christianity in Ireland. The Irish experience of secularization was sudden, shocking, and decisive. On both sides of the border, the tipping point may have occurred in the mid-1990s. In the north, the peace process led to sustained efforts to de-politicize religious identity, as weekly church attendance declined. In the Republic, popular culture internationalized, reflecting stronger links with the USA, an influence that was noticed in the changing accents of middle-class young people as much as in the cosmopolitan values they increasingly espoused. The grip of Catholic social teaching then began to relax, and this relaxation was symbolized by the changing status of contraception. In addition, the moral authority of the Church, which had so profoundly shaped the self-consciousness of the Republic as to become almost invisible, was shattered by a devastating sequence of scandals. These scandals include churchmen having secret families, financial misconduct, and child abuse. Ultimately, the institutions that had been inspired by Catholic religious nationalism had betrayed both church and nation. Christian Ireland was dead and gone, and Catholic politicians had killed it. The chapter then considers the possible future of Christianity in Ireland.


2021 ◽  
Vol 8 (2) ◽  
Author(s):  
Rozaidy Mahadi ◽  
Noor Kaziemah Sariman ◽  
Andy Lee Chen Hiung

There have been many financial scandals associated with religious-based non-profit organisations (RNPOs), their involvement in unethical and wrongdoing has pressured non-profit organisations, especially religious-based NPOs (RNPOs) to start adopting highly transparent and accountable financial management practices. Despite many efforts to improve the RNPOs’ service quality, their integrity has been tinted with many scandalous incidents of funds embezzlement and corruption. Poor financial accountability and lack of legal requirements are argued to be the underpinning reasons for such financial atrocities occurring. With the absence of sound financial governance and comprehensive financial regulations, it has been impaired the government’s ability to detect, prevent and correct RNPOs’ financial misconduct. To prevent financial misconduct from repeatedly occurring, having cogent financial control practices will ensure the RNPOs upholding their accountability duties to the clients they have served. Therefore, the objective of this paper is to examine Malaysian RNPOs financial controls practices. In doing so, various religious-based NGOs’ (i.e. Islam, Buddha, and Christian) representatives were interviewed, analysed, and appraised with Simon’s (1994) control framework. The findings indicate that the RNPOs financial control practices are mediated by the virtue of the religions that they have adopted, the RNPOs’ affiliation (i.e. local-based, foreign-based, and/or semi-government organisation), and the level of sponsorships and grants they have received.


Author(s):  
Joanna Golden

This study analyzes the impact of the local crime environment on the likelihood of a firm engaging in financial misconduct. Using the Benford Score metric, which assesses the extent to which a firm’s financial statement number distribution diverges from a theoretical distribution, I find that firms headquartered in high crime areas are associated with greater financial misconduct. The link is more pronounced in firms that offer more stock-based executive compensation to their executives or practice weak corporate governance, and change in the crime rate is associated with change in the firm’s financial misconduct. My results support the social norm, social learning, and environmental criminology theories, as well as the fraud triangle, and are robust to a number of alternative specifications and approaches. The evidence implies that a firm’s environment influences the level of corporate financial misconduct.


Author(s):  
Aneesh Raghunandan

AbstractI examine the relation between firms’ financial conduct and wage theft. Wage theft represents the single largest form of theft committed in the United States and primarily affects firms’ most vulnerable employees. I show that wage theft is more prevalent (i) when firms just meet or beat earnings targets and (ii) when executives’ personal liability for wage theft decreases. Wage theft precedes financial misconduct while the theft is undetected, but once firms are caught engaging in wage theft they are more likely to shift to engaging in financial misconduct. My findings highlight an economically meaningful yet previously undocumented way in which firms’ financial incentives relate to employee treatment.


2021 ◽  
pp. 000183922110206
Author(s):  
Ivana Naumovska ◽  
Dovev Lavie

Research on misconduct suggests that accusations against industry peers generate negative consequences for non-accused firms (a “stigma effect”). Yet, building on research on competitive dynamics, we infer that such accusations can benefit non-accused firms that compete with these peers (a “competition effect”). To reconcile these opposing perspectives, we posit that the negative stigma effect will increase with greater product market overlap between the non-accused firm and its accused peer, up to a point, beyond which the positive competition effect will counterbalance it. We further conjecture that the competition effect will be relatively more pronounced when the market classification used by investors for assessing the market overlap is more fine-grained. Accordingly, we suggest that more sophisticated investors, who rely on more fine-grained market classifications, increase their shareholdings in non-accused firms to a greater extent than less sophisticated investors as the market overlap between the non-accused firm and the accused peer increases. Using elaborate data on products and investments, we analyze investors’ shareholdings and stock market returns of non-accused firms in the U.S. software industry following accusations of financial misconduct by their industry peers, and we find support for our predictions. Our study elucidates the interplay between stigma and competition following misconduct by industry peers.


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