The effects of moral reasoning and self-monitoring on CFO intentions to report fraudulently on financial statements

Nancy Uddin, Peter R. Gillett

Research output: Contribution to journalArticlepeer-review

39 Scopus citations

Abstract

This study adapts the theory of reasoned action (Ajzen and Fishbein, 1980) to the behavior of fraudulent reporting on financial statements so as to examine the effects of moral reasoning and self monitoring on intention to report fraudulently, using structural equation modeling. The paper seeks to investigate two of the red flags for financial statement fraud identified in Loebbecke et al.'s (1989) paper: client management displays a significant lack of moral fiber and client personnel exhibit strong personality anomalies. As expected, high moral reasoners are more influenced than low moral reasoners by their own attitude towards the behavior. Contrary to prior research, low self monitors are found to be more influenced than high self monitors by subjective norms. Future research is recommended to investigate the counter-intuitive results for self monitors, to consider the implications of group decision making as regards the promulgation of fraudulent financial statements, and to examine additional red flags for financial statement fraud.

Original languageEnglish (US)
Pages (from-to)15-32
Number of pages18
JournalJournal of Business Ethics
Volume40
Issue number1
DOIs
StatePublished - 2002

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Business, Management and Accounting(all)
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law

Keywords

  • Financial statement fraud
  • Moral reasoning
  • Reasoned action model
  • Self monitoring
  • Structural equation modeling

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