Honors Theses

Date of Award

2006

Document Type

Undergraduate Thesis

Department

Accountancy

First Advisor

Mark Wilder

Relational Format

Dissertation/Thesis

Abstract

In this work, 1 explore the relationship between fraud and related changes in Corporate America with the express intention of showing that in spite of the negativity associated with fraud, it can still act as a mechanism that sets the wheels of change in motion in Corporate America. Of all the different kinds of fraud, this research focused on fraudulent financial reporting in corporations. In order to accomplish this goal, several research questions were examined which were aimed at examining the methods by which fraud is perpetrated, the relationship between fraud and business ethics and the effects fraud has had on various aspects of the society, including government regulation and public confidence in the accounting profession. With regards to government regulation, there was particular focus on the Sarbanes-Oxley Act as one of the major legislations dealing with fraud in corporations. The research findings showed that having a weak corporate ethical culture as well as a weak personal code of ethics were factors that increased the likelihood of perpetrating fraud. The proliferation of cases of accounting fraud has encouraged the growth and development of a new area of accounting called forensic accounting. In addition, this increase has also encouraged government involvement in coiporations, which has changed the face of corporate governance. The research concludes by asserting that fraud could act as an incentive for change in the American corporate world.

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