Fraud in accounting and audit research (1926–2019) – a bibliometric analysis

ABSTRACT

In the light of corporate fraud scandals, this study highlights the evolution and trends of fraud-related research within the accounting and audit discipline. Using bibliometrics to explore 260 fraud articles published in leading accounting and auditing journals between 1926 and 2019, our study reveals shifts in theories, frameworks, and research topics that shaped the research field. We find that the evolution of fraud research in the accounting and audit discipline is closely linked to developments in the regulatory environment. We further show that the fragmented literature can be categorised into different clusters, characterising various research streams. Based on the visualisation of fading and emerging research topics, we suggest promising future research avenues.

KEYWORDS:

• Fraud
• accounting
• auditing
• bibliometrics
• co-citation analysis
• social network analysis

Acknowledgements

We thank Trevor Boyns, Roy Chandler, Nelson Dueñas, Arvind Lall, Richard Macve, Katharina Rahnert, Helen Watson as well as conference participants at the 31^st Audit & Assurance Conference (AAC) (2021) and at the Accounting History Review (AHR) Annual Conference (2021) for their helpful comments and suggestions. Furthermore, we would like to express our gratitude to the two anonymous reviewers and the editor Cheryl S. McWatters whose feedback and ideas helped us to improve this manuscript substantially.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 See, for example, McCrum (2020) for an overview of this case.

2 In concrete figures, about 80 per cent of the 260 fraud-related articles and 68 per cent of the 199 most frequently co-cited publications included in our bibliometric analyses have neither been explicitly discussed in Hogan et al. (2008), nor in Trompeter et al. (2013). For instance, three publications that our bibliometric analysis identified as being among the most frequently cited references in fraud literature (see Table 2) were not discussed at all.

3 The definition of fraud according to International Standards on Auditing (ISA), specifically, ISA 240, is basically identical (IAASB 2016).

4 Also referred to as ‘motivation’.

5 Also referred to as ‘attitude’.

6 The proportion of women committing fraud has slightly increased in the past decades as more women have entered positions of authority within companies. However, even this development does not account for all gender differences in fraud (ACFE 2016, 2018).

7 Jacob S. Seidman was one of the founders of the CPA firm Seidman & Seidman, which is now part of BDO.

8 Also referred to as ‘co-word analysis’ (e.g., Callon et al. 1983; Zupic and Čater 2015).

9 Our keyword co-occurrence analysis is based on the author-supplied keywords and the Keywords Plus, provided by Web of Science (WoS).

10 The VOSviewer software was developed by Nees Jan van Eck and Ludo Waltman, Centre for Science and Technology Studies of Leiden University, and is freely available on www.vosviewer.com. The software is being updated on a regular basis. We used version 1.6.15 of VOSviewer, released on 1 April 2020.

11 A list of publications from various scientific disciplines that have used the VOSviewer software can be found at https://www.vosviewer.com/publications.

12 As recommended by the developers of the VOSviewer software, we used the fractional counting method (van Eck and Waltman 2014; Perianes-Rodriguez, Waltman, and van Eck 2016). Furthermore, we created and used a thesaurus file to merge synonyms (e.g., ‘securities and exchange commission’ and ‘SEC’), plural and single nouns (e.g., ‘restatements’ and ‘restatement’), different spellings of words (e.g., ‘whistle-blowers’ and ‘whistleblowers’), as well as of author names (e.g., ‘palmrose, zoe-vonna’, ‘palmrose, z’, and ‘palmrose, zv’) (van Eck and Waltman 2020).

13 An overview of the journal’s positioning in various rankings is provided by Harzing’s (2020) Journal Quality List, 67th edition.

14 A content list of journals and magazines of EBSCOhost Business Source Complete can be accessed via https://www.ebsco.com/e/products-and-services/research-databases/business-source-complete.

15 We used truncation (*) for our search, which is a common technique to account for variant endings of the search terms (e.g., fraud* = fraud, fraudulent).

16 Average number of publications per year since the first year of publication of the respective journal.

17 We would like to express our gratitude to one of the anonymous reviewers for the helpful advice to subdivide the 1926–1989 period into these two smaller periods to reflect the major change in the accounting academy around the late 1960s and early 1970s, namely the shift towards ‘decision usefulness’ as the purpose of accounting (see, e.g., Beaver 1981). Moreover, until the 1960s, a substantial proportion of articles focused on practice-oriented topics. This changed in the following decades, resulting in a significant decrease in influence of research on practice (Wyatt 1989; Sullivan 1993; Heck and Jensen 2007; Moehrle et al. 2009). We acknowledge, however, that in the first period (1926–1969), of the seven journals included in our analysis, only TAR (since 1926) and JAR existed (since 1963). Given that we focus on the most influential journals in accounting and audit research in our analysis, we did not include other journals that existed around that time, such as the Journal of Accountancy. This potential limitation should be kept in mind when interpreting our results. Nevertheless, we consider our results to be fairly indicative of the developments at that time with regard to fraud literature.

18 The Securities Exchange Act of 1934 also created the Securities and Exchange Commission (SEC).

19 That is, section 17(a) of the Securities Act of 1933 and section 10(b) of the Securities Exchange Act of 1934.

20 See, for example, Calavita, Pontell, and Tillman (1997) for an in-depth analysis of the savings and loan crisis.

21 See, for example, Kuttner (2007). However, there are also opposing views (see, e.g., Crawford 2011).

22 We would like to thank one of the anonymous reviewers for the helpful suggestions to refer to the repeal of Glass-Steagall and to distinguish between regulation, deregulation, and re-regulatory endeavours.

23 Of these 19 articles in 2013, 7 were published in AJPT and 5 in AOS. The latter were published in volume 38, issue 6-7, which featured a special topic on fraud.

24 Another reason for this time lag is the generally time-consuming process of developing, submitting, and publishing high-quality papers that might take several years.

25 We would like to thank one of the anonymous reviewers for drawing our attention to this aspect.

26 No fixed specification or theoretical guidance exist regarding the optimal determination of the threshold. Hence, one needs to balance between not being too detailed to ensure the holistic perspective on the one hand, and not being too abstract to prevent equivocality and to generate value by revealing the intellectual and conceptual structure through sensible clustering on the other hand.

27 The Appendix provides an overview of the 20 most-cited publications of each cluster. Since Cluster 5 consists of solely 19 publications, all 19 publications of this cluster are included in the Appendix. Given that the 20 most-cited publications accurately represent the content and network influence of each cluster, detailed discussions, concerning the content of each cluster to deepen our understanding of the inherent structure of the network, focuses on these top-20 cited publications.

28 Some publications additionally utilise the Wall Street Journal Index (e.g., Palmrose 1988; Beasley 1996; Summers and Sweeney 1998).

29 Madoff was arrested in 2008 and sentenced to 150 years in prison for one of the largest Ponzi scheme frauds in history. The SEC was later criticised for having ignored Markopolos’ allegations for years.

30 The communication of critical audit matters is required in accordance with the Auditing Standard 3101 ‘The auditor’s report on an audit of financial statements when the auditor expresses an unqualified opinion’, adopted in June 2017 (PCAOB 2017). The UK and the EU have also recently introduced comparable requirements (i.e., key audit matters and most significant assessed risks of material misstatement, respectively).

31 The related keywords are untabulated as they only appear one or two times each.

32 This study, and bibliometric analysis in general, do not claim causality with regard to changes in the regulatory environment and the development of the literature and research topics but identifies and describes these developments and places them in a historical context.

33 See, for example, Ravenscroft and Williams (2021) for an in-depth analysis and discussion on the implications resulting from this domination.