Early Detection and Prevention of Corporate Financial Fraud
Early Detection and Prevention of Corporate Financial Fraud by Marcia K. Schillermann MBA, Ashford University, 2014 BA, Ashford University, 2012 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Management and Technology Walden University November 2018 Abstract The economic cost of financial statement fraud continues to be a problem for organizations and society. The research problem addressed in this study was the limited risk management strategies available for the early detection and prevention of financial statement fraud by corporate managers and auditors. These strategies are important to the proactive prevention of fraud. This study is important to future trustworthiness of financial statements. The purpose of this qualitative, multiple case study was to explore current early detection and prevention methods in financial statement fraud using a risk management conceptual framework. The research question focused on current fraud detection and prevention policies and risk management strategies that are currently used for proactively detecting and preventing financial statement fraud. Multiple sources of information were used, including examining recent financial fraud scandals, interviews, documents, and past research. The target population was managers and auditors of publicly traded corporations. A purposive sampling procedure was used to select 23 participants, which provided rich data. The qualitative data was coded and analyzed using the concept of risk management, along with triangulation to ensure credibility. The key findings indicated that current practitioners are moving beyond the era of reactive measures born from the past fraud crises and are working toward improved financial statement quality and trust. The results of the study also indicated that future research should include proactive methods of preventing fraud. This study is socially significant because it could enhance the ability to trust financial statement reporting in the future and improve corporate reputations.The economic cost of financial statement fraud continues to be a problem for organizations and society. The research problem addressed in this study was the limited risk management strategies available for the early detection and prevention of financial statement fraud by corporate managers and auditors. These strategies are important to the proactive prevention of fraud. This study is important to future trustworthiness of financial statements. The purpose of this qualitative, multiple case study was to explore current early detection and prevention methods in financial statement fraud using a risk management conceptual framework. The research question focused on current fraud detection and prevention policies and risk management strategies that are currently used for proactively detecting and preventing financial statement fraud. Multiple sources of information were used, including examining recent financial fraud scandals, interviews, documents, and past research. The target population was managers and auditors of publicly traded corporations. A purposive sampling procedure was used to select 23 participants, which provided rich data. The qualitative data was coded and analyzed using the concept of risk management, along with triangulation to ensure credibility. The key findings indicated that current practitioners are moving beyond the era of reactive measures born from the past fraud crises and are working toward improved financial statement quality and trust. The results of the study also indicated that future research should include proactive methods of preventing fraud. This study is socially significant because it could enhance the ability to trust financial statement reporting in the future and improve corporate reputations. Early Detection and Prevention of Corporate Financial Fraud by Marcia K. Schillermann MBA, Ashford University, 2014 BA, Ashford University, 2012 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Management and Technology Walden University November 2018 Dedication I dedicate this dissertation to my dad who passed away on June 13, 2018. He was a constant source of support throughout my life. I would not have had the courage to pursue my goals without the influence and guidance he provided. My dad will forever be in my heart and mind as I continue achieving my goals throughout life. He has been my inspiration in everything I set out to achieve. I love you Pop. Forever and always. Acknowledgments I would like to thank Dr. Steven Tippins for over a year of constant support and advice during the stages of the dissertation process. His support and suggestions helped me to achieve this milestone in my life. I would also like to thank Dr. David Cavazos for assisting in the dissertation review process. His input has helped ensure a quality piece of work that I am proud to publish. I also want to thank Dr. Craig Barton for his role as the University Research Reviewer (URR) for my dissertation. His suggestions provided me with the needed guidance to produce scholarly work that I am proud of sharing. I would also like to thank my family for the many times they had to wait for dinner while I worked on my dissertation. My husband and children were (usually) very patient with me throughout this process. I also thank my parents for always supporting my efforts and choices throughout my life. They always let me know that they were proud of my achievements. In addition, I thank my friends, classmates, and colleagues for supporting me and cheering me on every step of the way.