Revisiting the Accounting Fraud Components: A Bottom-Up Approach Using the Twitter Platform

Roberto Tommasetti,Rodrigo de Oliveira Leite,Marcelo Alvaro da Silva Macedo,Vinicius Mothé Maia

doi:10.1177/21582440211058190

Roberto Tommasetti, Rodrigo de Oliveira Leite + Show 2 more

Open Access

https://doi.org/10.1177/21582440211058190

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Abstract

Despite the relevant economic and reputational impact of fraud, research in this field remains fragmented. This study aims to create a new framework for accounting fraud, defining its main components from the social media user’s perspective. In terms of research technique, an online data collection using social media platform was used retrieving, through the phyton web crawler procedure, 43,655 tweets containing the phrase “accounting fraud” from July 2006 to December 2019. Individual words were identified and treated within the selected tweets, excluding stop words and, finally, using a sparsity index. The proposed methodology, which overcomes traditional survey inherent bias efficiently, contributes to bridging the divide between academia and society. We find that Twitter users shape the Accounting Fraud Hexagon, composed by (i) The Object and the Tool (of misrepresentation), being the Financials, (ii) The (Guilty) Fraudster, (iii) The Defrauded, (iv) Materiality, (v) The Consequences, and (vi) the Watchdog. Our research has several implications. Our research identifies additional “angles” of vision to the traditional fraud triangle-diamond-pentagon theories compared with the existing top-down conceptual frameworks. Also, since it uses a bottom-up instead of a top-down approach, the study allows a more comprehensive definition of accounting fraud, thus contributing to the debate for a common language in this field. We expect to encourage more research using social media as a tool to test the literature built on in vitro theories empirically.

Highlights

Fraud is pervasive in business and, in broader terms, in society
The path followed by scholars was: (i) to understand the need to define financial misconduct as a crime; (ii) to design general theoretical frameworks or behavioral theories to analyze individual elements to analyze the phenomenon better and give rules to the market and guidelines to accountants/auditors; (iii) to study the accounting fraud from an interdisciplinary perspective to get a broader understanding; and (iv) to try giving the most comprehensive definition of accounting fraud starting from a cross-disciplinary literature review
We aim to examine nuances potentially under-researched in literature, participating in the debate under the previous point (iv), extending it to the social media view

Summary

Introduction

Fraud is pervasive in business and, in broader terms, in society. The term “Accounting Fraud” is refereed to activities that use accounting books and reports to hide fraudulent behavior or give a false impression of an entity’s financial and economic reality. The path followed by scholars was: (i) to understand the need to define financial misconduct as a (white-collar) crime; (ii) to design general theoretical frameworks (seen in the Introduction) or behavioral theories to analyze individual elements to analyze the phenomenon better and give rules to the market and guidelines to accountants/auditors; (iii) to study the accounting fraud from an interdisciplinary perspective to get a broader understanding; and (iv) to try giving the most comprehensive definition of accounting fraud starting from a cross-disciplinary literature review.

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