Abstract
During the thousands of years of fraud history, it is observed that many factors play critical roles in fraud occurrence, prevention, and detection. These can be categorised into factors associated with the external environment, organisations, fraudsters, and victims.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Achim, M.V. 2016. Cultural Dimension of Corruption: A Cross-Country Survey. International Advances in Economic Research 22 (3): 333–345.
Aghion, P., Y. Algan, P. Cahuc, and A. Shleifer. 2010. Regulation and Distrust. The Quarterly Journal of Economics 125 (3): 1015–1049. https://doi.org/10.1162/qjec.2010.125.3.1015.
Alas, R. 2006. Ethics in Countries with Different Cultural Dimensions. Journal of Business Ethics 69: 237. https://doi.org/10.1007/s10551-006-9088-3.
Albrecht, C., C. Turnbull, Y. Zhang, and C.J. Skousen. 2010. The Relationship between South Korean Chaebols and Fraud. Management Research Review 33 (3): 257–268.
Alesina, A., and P. Giuliano. 2015. Culture and Institutions. Journal of Economic Literature 53 (4): 898–944. https://doi.org/10.1257/jel.53.4.898.
Anderson, R.C., S.A. Mansi, and D.M. Reeb. 2003. Founding Family Ownership and the Agency Cost of Debt. Journal of Financial Economics 68 (2): 263–285.
Berglöf, E., and S. Claessens. 2006. Enforcement and Good Corporate Governance in Developing Countries and Transition Economies. The World Bank Research Observer 21 (1), 123–150. https://doi.org/10.1093/wbro/lkj005
Bergstresser, D., and T. Philippon. 2006. CEO Incentives and Earnings Management. Journal of Financial Economics 80 (3): 511–529.
Bik, O., and Hooghiemstra, R. 2018. Cultural Differences in Auditors’ Compliance with Audit Firm Policy on Fraud Risk Assessment Procedures. AUDITING: A Journal of Practice and Theory 37 (4): 25–48. https://doi.org/10.2308/ajpt-51998.
Block, J., C. Fisch, and F. Rehan. 2020. Religion and Entrepreneurship: A Map of the Field and a Bibliometric Analysis. Management Review Quarterly 70: 591–627. https://doi.org/10.1007/s11301-019-00177-2.
Boateng, A., Y. Wang, C. Ntim, and K.W. Glaister. 2021. National Culture, Corporate Governance and Corruption: A Cross-Country. Analysis 26 (3): 3852–3874. https://doi.org/10.1002/ijfe.1991.
Callen, J., M. Morel, and G. Richardson. 2011. Do Culture and Religion Mitigate Earnings Management? Evidence from a Cross-Country Analysis. International Journal of Disclosure and Governance 8: 103–121. https://doi.org/10.1057/jdg.2010.31.
Caplan, D. H., S.K. Dutta, and D.J. Marcinko. 2019. Unmasking the Fraud at Toshiba. Issues in Accounting Education 34 (3): 41–57.
Chen, E. 2013. Neoliberalism and Popular Women’s culture: Rethinking Choice, Freedom and Agency. European Journal of Cultural Studies 16 (4): 440–452.
Chen, G., M. Firth, D. Gao, and O.M. Rui. 2005. Is China’s Securities Regulatory Agency a Toothless Tiger? Evidence from Enforcement Actions. Journal of Accounting and Public Policy 24 (6): 451–488.
Cherry, K. 2021. Understanding Collectivist Cultures. Available at: https://www.verywellmind.com/what-are-collectivistic-cultures-2794962#:~:text=Countries%20that%20are%20relatively%20more%20collectivistic%20include%20China%2C,dependable%2C%20and%20attentive%20to%20the%20needs%20of%20others. Accessed on October 28, 2021.
Choi, Y. 2010. The Enforcement and Development of Korean Competition Law. World Competition 2: 301–315. https://kluwerlawonline.com/journalarticle/World+Competition/33.2/WOCO2010022.
Choi, S., and A. Pritchard. 2016. SEC Investigations and Securities Class Actions: An Empirical Comparison. Journal of Empirical Legal Studies 13 (1): 27–49.
Chung, T.R., P.N. Sharma, C.C. Lee, and J. Pinto. 2021. National Culture and Occupational Fraud Magnitude: The Moderating Role of Fraud Type. Journal of Forensic Accounting Research 6 (1): 406–435. https://doi.org/10.2308/JFAR-2020-025.
Claessens, S., S. Djankov, and L.H. Lang. 2000. The Separation of Ownership and Control in East Asian Corporations. Journal of Financial Economics 58: 81–112.
Coffee Jr., J. 2005. A Theory of Corporate Scandals: Why the U.S. and Europe Differ. Oxford Review of Economic Policy 21 (2): 198–211.
Davis, J., and J. Ruhe. 2003. Perceptions of Country Corruption: Antecedents and Outcomes. Journal of Business Ethics 43 (4): 275–288.
De Beckker, K., K. De Witte, and G. Van Campenhout. 2020. The Role of National Culture in Financial Literacy: Cross-Country Evidence. The Journal of Consumer Affairs 54 (3): 912–930.
Dechow, P., W. Ge, and C. Schrand. 2010. Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences. Journal of Accounting and Economics 50 (2): 344–401.
Deephouse, D., W. Newburry, and A. Soleimani. 2016. The Effects of Institutional Development and National Culture on Cross-National Differences in Corporate Reputation. Journal of World Business 51 (3): 463–473.
Deller, S., T. Conroy, and B. Markeson. 2018. Social Capital, Religion and Small Business Activity. Journal of Economic Behaviour and Organization 155: 365–381.
Dennett, D. 2001. The Evolution of Culture. The Monist 84 (3): 305–324. http://www.jstor.org/stable/27903733.
Desender, K. A., C.E. Castro, and S.A. De León. 2011. Earnings Management and Cultural Values. American Journal of Economics and Sociology 70 (3): 639–670.
Dharmapala, D., and V. Khanna. 2013. Corporate Governance, Enforcement, and Firm Value: Evidence from India. The Journal of Law, Economics, and Organization 29 (5): 1056–1084. https://doi.org/10.1093/jleo/ews011.
Du, X., W. Jian, and Q. Zeng. 2014. Corporate Environmental Responsibility in Polluting Industries: Does Religion Matter? Journal of Business Ethics 124 (3): 485–507. https://doi.org/10.1007/s10551-013-1888-7.
Firth, M., P. Mo, and R. Wong. 2005. 2005, Financial Statement Frauds and Auditor Sanctions: An Analysis of Enforcement Actions in China. Journal of Business Ethics 62: 367–381. https://doi.org/10.1007/s10551-005-0542-4.
Gorodnichenko, Y. and G. Roland. 2011. Which Dimensions of Culture Matter for Long-Run Growth? American Economic Review 101 (3): 492–498.
Guiso, L., P. Sapienza, and L. Zingales. 2006. Does Culture Affect Economic Outcomes? Journal of Economic Perspectives 20 (2): 23–48.
Gul, F. A., and R. Zhao. 2000. Corporate Governance and Performance in Chinese Listed Companies. Working Paper, City University of Hong Kong.
Han, S., T. Kang, and S. Salter. 2010. A Cross-Country Study on the Effects of National Culture on Earnings Management. Journal of International Business Studies 41: 123–141. https://doi.org/10.1057/jibs.2008.78.
Hofstede, G. 2001. Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations. Sage publications.
Hofstede, G. 2011. Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings in Psychology and Culture, Unit 2. Retrieved from http://scholarworks.gvsu.edu/orpc/vol2/iss1/8.
House, R., P. Hanges, M. Javidan, P. Dorfman, and V. Gupta. 2004. Culture, Leadership, and Organizations: The Globe Studies of 62 Societies. Thousand Oaks, CA: Sage.
Huang, R. 2013. Private Enforcement of Securities Law in China: A Ten-Year Retrospective and Empirical Assessment. The American Journal of Comparative Law 61 (4): 757–798. https://doi.org/10.5131/AJCL.2013.0007.
Husted, B.W. 1999. Wealth, Culture, and Corruption. Journal of International Business Studies 30 (2): 339–359.
Jiang, F., and K. Kim. 2020. Corporate Governance in China: A Survey. Review of Finance 24 (4): 733–772. https://doi.org/10.1093/rof/rfaa012.
Jones, C. 2004. Private Antitrust Enforcement in Europe: A Policy Analysis and Reality Check. World Competition 27 (1): 13–24.
Kanagaretnam, K., C. Lim, and G. Lobo. 2011. Effects of National Culture on Earnings Quality of Banks. Journal of International Business Studies 42 (6): 853–874. https://doi.org/10.1057/jibs.2011.26.
Karpoff, J. M., D.S. Lee, and G.S. Martin. 2008a. The Consequences to Managers for Cooking the Books. Journal of Financial Economics 88 (88): 193–215.
Karpoff, J. M., D.S. Lee, and G.S. Martin. 2008b. The Cost to Firms of Cooking the Books. Journal of Financial and Quantitative Analysis 43 (3): 581–611.
Kim, H.S., D.K. Sherman, and S.E. Taylor. 2008. Culture and Social Support. American Psychologist 63 (6): 518–526. https://doi.org/10.1037/0003-066X.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny. 1997. Legal Determinants of External Finance. Journal of Finance 52 (3): 1131–1155.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny. 1998. Law and Finance. Journal of Political Economy 106 (6): 1113–1155.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny. 2000. Investor Protection and Corporate Governance. Journal of Financial Economics 58: 3–27.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny. 2002. Investor Protection and Corporate Valuation. Journal of Finance 57 (3): 1147–1170.
La Porta, R., F. Lopez-de-Silanes, and A. Shleifer. 2006. What Works in Securities Laws? Journal of Finance 61 (1): 1–32.
Lewellyn, K., and S. Bao. 2017. The Role of National Culture and Corruption on Managing Earnings Around the World. Journal of World Business 52 (6): 798–808.
Leventis, S., E. Dedoulis, and O. Abdelsalam. 2018. The Impact of Religiosity on Audit Pricing. Journal of Business Ethics 148: 53–78. https://doi.org/10.1007/s10551-015-3001-x.
Li, K., D. Griffin, H. Yue, and L. Zhao. 2013. How Does Culture Influence Corporate Risk-Taking? Journal of Corporate Finance 23: 1–22.
Li, L., A. McMurray, M. Sy, and J. Xue. 2018a. Corporate Ownership, Efficiency and Performance Under State Capitalism: Evidence from China. Journal of Policy Modeling. https://doi.org/10.1016/j.jpolmod.2018.03.002.
Li, L., A. McMurray, J. Xue, Z. Liu, and M. Sy. 2018b. Industry-Wide Corporate Fraud: The Truth Behind the Volkswagen Scandal. Journal of Cleaner Production 172: 3167–3175.
Licht, A.N., C. Goldschmidt, and S.H. Schwartz. 2005. Culture, Law, and Corporate Governance. International Review of Law and Economics 25 (2): 229–255.
Liu, C., and S.S. Wu. 2020. National Culture, Legal Environment, and Fraud. In Corporate Fraud Exposed, ed. H.K. Baker, L. Purda-Heeler, and S. Saadi, 127–147. Bingley: Emerald Publishing Limited. https://doi.org/10.1108/978-1-78973-417-120201008.
Liu, T., Y. Jiang, and L. Hao. 2021. Short-Sale Refinancing and Earnings Response Coefficient: Evidence from China. International Journal of Accounting & Information Management 29 (1): 127–146. https://doi-org.ezproxy.lib.rmit.edu.au/10.1108/IJAIM-03-2020-0030.
Ma, L., X. Wang, and C. Zhang. 2021. Does Religion Shape Corporate Cost Behavior? Journal of Business Ethics 170 (4): 835–855.
McConnell, J.J., and H. Servaes. 1990. Additional Evidence on Equity Ownership and Corporate Value. Journal of Financial Economics 27: 595–612.
McLaughlin, E. 2013. Culture and Corruption: An Explanation of the Differences between Scandinavia and Africa. American International Journal of Research in Humanities, Arts and Social Sciences 2 (2): 85–91.
Mihret, G. 2014. National Culture and Fraud Risk: Exploratory Evidence. Journal of Financial Reporting and Accounting 12 (2): 161–176. https://doi.org/10.1108/JFRA-10-2012-0049.
Morck, R., A. Shleifer, and R. Vishny. 1988. Management Ownership and Market Valuation: An Empirical Analysis. Journal of Financial Economics 20: 293–315.
Murdoch, A. 2009. How Much Culture Is There in Corruption? Some Thoughts on Transformation-cum-Collective Culture Shock in Post-Communist Poland. Journal of Intercultural Management 1 (1): 42–63.
Nadler, C., and B. Wolfgang. 2019. Culture Finance as a Research Field: An Evaluative Survey. Journal of Business Economics 89 (2): 191–220.
Nicholls, C. 2015. Civil Enforcement in Canadian Securities Law. Journal of Corporate Law Studies 9 (2): 367–408. https://doi.org/10.1080/14735970.2009.11421546.
Nolder, C., and T. Riley. 2014. Effects of Differences in National Culture on Auditors’ Judgments and Decisions: A Literature Review of Cross-Cultural Auditing Studies from a Judgment and Decision Making Perspective. Auditing: A Journal of Practice & Theory 33 (2): 141–164.
Oyserman, D., and S.W. Lee. 2008. Does Culture Influence What and How We Think? Effects of Priming Individualism and Collectivism. Psychological Bulletin 134 (2): 311–342. https://doi.org/10.1037/0033-2909.134.2.311.
Parboteeah, K.P., J.W. Bronson, and J.B. Cullen. 2005. Does National Culture Affect Willingness to Justify Ethically Suspect Behaviors? A Focus on the Globe National Culture Scheme. International Journal of Cross Cultural Management 5 (2): 123–138.
Parboteech, K. P., J.W. Bronson, and J.B. Cullen. 2005. Does National Culture Affect Willingness to Justify Ethically Suspect Behaviors? A Focus on the Globe National Culture Scheme. International Journal of Cross Cultural Management 5 (2): 123–138.
Parboteech, K. P., S.G. Walter, and J.H. Block. 2015. When does Christian Religion Matter for Entrepreneurial Activity? The Contingent Effect of a Country’s Investments into Knowledge. Journal of Business Ethics 130 (2): 447–465.
Roe, M. 1994. Strong Managers, Weak Owners: The Political Roots of American Corporate Finance. Princeton: Princeton University Press.
Salin, A., A. Saiful, A. Manan, S. Khadijah, N. Kamaluddin, and A. Nawawi. 2017. The Role of Islamic Ethics to Prevent Corporate Fraud. International Journal of Business & Society 18: 113–128.
Schreier, S., N. Heinrichs, and L. Alden. 2010. Social Anxiety and Social Norms in Individualistic and Collectivistic Countries. Depression and Anxiety 27 (12): 1128–1134. https://doi.org/10.1002/da.20746.
Shaiq, H. 2011. Why Not Everybody Loves Hofstede? What are the Alternative Approaches to Study of Culture. European Journal of Business and Management 3 (6): 101–112.
Shleifer, A., and R. Vishny. 1997. Survey of Corporate Governance. Journal of Finance 52 (2): 737–783.
Shore, C. 2005. Culture and Corruption in the EU: Reflections on Fraud, Nepotism and Cronyism in the European Commission. In Corruption: Anthropological Perspectives, ed. Cris Shore and Dieter Haller. London: Pluto Press.
Steensma, H. K., L. Marino, K.M. Weaver, and P.H. Dickson. 2000. The Influence of National Culture on the Formation of Technology Alliances by Entrepreneurial Firms. Academy of Management Journal 43 (5): 951–973.
Tang, X., Y. Gu, R. Weng, and K. Ho. 2021. Confucianism and Corporate Fraud. International Journal of Emerging Markets. https://doi.org/10.1108/IJOEM-12-2019-1004.
Teixeira, A., Pimenta, C., Maia, A., Moreira, J. 2016. Corruption, Economic Growth and Globalization. New York: Routledge.
Terracino, J. 2012. The International Legal Framework Against Corruption: States’ Obligations to Prevent and Repress Corruption. Intersentia.
Tiessen, J.H. 1997. Individualism, Collectivism, and Entrepreneurship: A Framework for International Comparative Research. Journal of Business Venturing 12 (5): 367–384.
The Hofstede Insights. 2021. National Culture. Available at: https://hi.hofstede-insights.com/national-culture. Accessed on August 12, 2021.
Tong, W. 2014. Analysis of Corruption from Sociocultural Perspectives. International Journal of Business and Social Science 5 (11(1)): 9–19.
United Nations (UN). 2003. Statement on the Adoption by the General Assembly of the United Nations Convention Against Corruption. Available at: https://www.unodc.org/unodc/en/treaties/CAC/background/secretary-general-speech.html. Accessed on November 13, 2021.
Van Loo, R. 2020. The New Gatekeepers: Private Firms as Public Enforcers. Virginia Law Review 106: 467.
Wang Y. 2019. The Evolutionary Analysis on the Expropriation of Large Shareholders on Minority Shareholders. In Frontier Computing, ed. J. Hung, N. Yen, and L. Hui. Singapore: Springer. https://doi.org/10.1007/978-981-13-3648-5_169.
Watson, D. 2003. Cultural Dynamics of Corporate Fraud. Cross Cultural Management 10: 40–54.
Williamson, O.E. 2000. The New Institutional Economics: Taking Stock, Looking Ahead. Journal of Economic Literature 38 (3): 595–613.
Xu, W., and G. Xu. 2020. Understanding Public Enforcement of Securities Law in China: An Empirical Analysis of the Enforcement Actions of the CSRC and Its Regional Offices Against Informational Misconduct. International Review of Law and Economics 61: 105877. https://doi.org/10.1016/j.irle.2019.105877.
Yeon, A.L., and F. Samsuddin. 2012. Law Enforcement in Malaysian Securities Markets. Journal of Business and Management 1 (5): 20–27.
Yu, X., and Y. Zheng. 2019. The Value of Political ties for Firms Experiencing Enforcement Actions: Evidence from China. The British Accounting Review 51 (1): 24–45.
Zhan, J. 2012. Filling the Gap of Formal Institutions: The Effects of Guanxi Network on Corruption in Reform-Era China. Crime, Law and Social Change 58 (2): 93–109.
Zhao, X., D. Yang, and Z. Li. 2021. Multiple Large Shareholders and Corporate Fraud: Evidence from China. Frontiers of Business Research in China 15: 9. https://doi.org/10.1186/s11782-021-00106-9.
Zhu, Q. 2020. Reputational Cost of Securities Fraud in Japan Under a Public-Enforcement-Centered Sanction Regime. International Review of Law and Economics 63: 105915. https://doi.org/10.1016/j.irle.2020.105915.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Li, L., McMurray, A. (2022). External Factors: Legal Framework and the Business Environment. In: Corporate Fraud Across the Globe. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-19-3667-8_8
Download citation
DOI: https://doi.org/10.1007/978-981-19-3667-8_8
Published:
Publisher Name: Palgrave Macmillan, Singapore
Print ISBN: 978-981-19-3666-1
Online ISBN: 978-981-19-3667-8
eBook Packages: Business and ManagementBusiness and Management (R0)