HAL will be down for maintenance from Friday, June 10 at 4pm through Monday, June 13 at 9am. More information
Skip to Main content Skip to Navigation
Journal articles

Is accountability a double-edged sword? Experimental evidence on the effectiveness of internal controls to prevent fraud

Abstract : Recent legislations oblige organizations to monitor the effectiveness of internal control mechanisms that are necessary to prevent fraud. However, little is known about the effectiveness of different internal controls. We investigate whether the duty to sign work results--one of the most prominent internal control mechanisms--is effective to prevent fraud under different superior instructions. We use a 2×2 between-subjects experimental design with accountability (duty to sign work results vs. no duty to sign) and superior instructions (with vs. without profit maximization cue) as independent variables. Both manipulations of superior instructions reminded people to respect accounting standards and principles but in one condition, an instruction to increase revenues was integrated as profit maximization cue. We expected this cue to trigger a profit maximization decision frame that increases the likelihood for fraudulent revenue recording. 58 managers from an executive MBA class participated in the experiment. We find that superior instructions interact with accountability. Fraudulent revenue recording was particularly observed when people received instructions to increase revenues and had to sign their work results. Consequently, fraudulent behavior can occur without pressure to commit fraud due to profit maximization cues that are communicated by a superior and despite implemented internal control mechanisms. We discuss possible implications of our results for the prevention of fraudulent behavior.
Document type :
Journal articles
Complete list of metadata

Contributor : Antoine Haldemann Connect in order to contact the contributor
Submitted on : Tuesday, December 4, 2012 - 1:53:08 PM
Last modification on : Tuesday, December 18, 2012 - 7:58:06 PM

Links full text




Florian Hoos, Grégoire Bollmann. Is accountability a double-edged sword? Experimental evidence on the effectiveness of internal controls to prevent fraud. Journal of Management Control, 2012, 23 (2), pp.115-132. ⟨10.1007/s00187-012-0161-z⟩. ⟨hal-00760769⟩



Record views