Conditions Associated with Increased Risk of Fraud: A Model for Publicly Traded Restaurant Companies

References

• Abbott, L. J., Parker, S., & Peters, G. F. (2004). Audit committee characteristics and restatements. Auditing: A Journal of Practice & Theory, 23(1), 69–87.
   Web of Science ®Google Scholar
• Advani, R. (2006). The Wall Street MBA: Your Personal Crash Course in Corporate Finance. New York, NY: McGraw-Hill.
   Google Scholar
• AICPA. (2009). Management override of internal controls: The Achilles’ heel of fraud prevention. New York, NY: Author.
   Google Scholar
• Alalehto, T. (2000). The art of economic crime: The logic of dirty business and normative restrictions in the Swedish restaurant industry. Journal of Scandinavian Studies in Criminology and Crime Prevention, 1, 156–177.
   Google Scholar
• Albrecht, J. (2002). A matching model with endogenous skill requirements. International Economic Review, 43, 283–305.
   Web of Science ®Google Scholar
• Albrecht, W. S., Albrecht, C. C., & Albrecht, C. O. (2004). Fraud and corporate executives: Agency, stewardship and broken trust. Journal of Forensic Accounting, 5(1), 109–130.
   Google Scholar
• Allen, C. (2008). Restaurant industry bears brunt of recession. Retrieved from Decision Analyst website: http://www.decisionanalyst.com/publ_data/2008/restaurant.dai.
   Google Scholar
• Arad, H., & Jamshedy-Navid, L. (2010). A clear look at internal controls: Theory and concepts. SSRN 2009 Top 10 Paper, Retrieved from http://ssrn.com/abstract = 1342048.
   Google Scholar
• Arrow, K. J. (1974). Limited knowledge and economic. The American Economic Review, 64(1), 1–10.
   Web of Science ®Google Scholar
• Ashbaugh-Skaife, H., Collins, D., Kinney, W., & LaFond, R. (2006). The effect of internal control deficiencies on firm risk and cost of equity capital. Working paper. Journal of Accounting Research, 47(1), 1–43.
   Google Scholar
• Bainbridge, C. (1996). Balancing act. Management Consultancy, July/August, 30–33.
   Google Scholar
• Baker, K. (1998, June). Internal control and audit issues in the hospitality industry. Paper presented at the 3rd International Conference: Tourism and Hotel Industry in Indo-China & Southeast Asia: Development, Marketing, and Sustainability, Sydney, Australia.
   Google Scholar
• Beasley, M. S. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review, 443–465.
   Web of Science ®Google Scholar
• Beasley, M. S. (2000). Fraudulent financial reporting: Consideration of industry traits and corporate governance mechanisms. Accounting Horizons, 14(4), 441–454.
   Google Scholar
• Beneish, M. D. (1997). Detecting GAAP violation: Implications for assessing earnings management among firms with extreme financial performance. Journal of Accounting and Public Policy, 16(3), 271–309.
   Google Scholar
• Bernardi, R. A., & Pincus, K. V. (1996). The relationship between materiality thresholds and judgments of fraud risk. Managerial Finance, 22(9), 1–15.
   Google Scholar
• Boulton, D. L. (2013). New menu labeling requirements for food chains: Possible impact on small business restaurants. Paper presented at the Allied Academies International Internet Conference, Arden, NC.
   Google Scholar
• Bratton, W. W. (2002). Enron, Sarbanes-Oxley and accounting: Rules versus principles versus rents. Villanova Law Review, 48(4), 1023.
   Google Scholar
• Bryan, S. H., & Lilien, S. B. (2005). Characteristics of firms with material weaknesses in internal control: An assessment of Section 404 of Sarbanes Oxley. 10.2139/ssrn.682363.
   Google Scholar
• Burns, N., & Kedia, S. (2006). The impact of performance-based compensation on misreporting. Journal of Financial Economics, 79(1), 35–67.
   Web of Science ®Google Scholar
• Camillo, A. A., Connolly, D. J., & Kim, W. G. (2008). Success and failure in Northern California: Critical success factors for independent restaurants. Cornell Hospitality Quarterly.
   Google Scholar
• Carcello, J. V., Hermanson, D. R., & Ye, Z. (2006). Corporate Governance Research in Accounting and Auditing: Insights, Practice Implications, and Future Research Directions. Auditing: A Journal of Practice & Theory, 30(3), 1–31.
   Google Scholar
• Chathoth, P. K., & Olsen, M. D. (2007). The effect of environment risk, corporate strategy, and capital structure on firm performance: an empirical investigation of restaurant firms. International Journal of Hospitality Management, 26(3), 502–516.
   Google Scholar
• Choi, G. (2007). Green practices II: Measuring restaurant managers' psychological attributes and their willingness to charge for the “green practices.” Journal of Foodservice Business Research, 9(4), 41–63.
   Google Scholar
• Committee of Sponsoring Organizations of the Treadway Commission. (2000). Internal control-integrated framework. New York, NY: American Institute of Certified Public Accountants.
   Google Scholar
• Cressey, D. R. (1950). The criminal violation of financial trust. American Sociological Review, 15(6), 738–743. Retrieved from http://www.jstor.org/stable/2086606.
   Web of Science ®Google Scholar
• Cressey, D. R. (1973). Other people's money: A study in the social psychology of embezzlement. Montclair, NJ: Patterson Smith.
   Google Scholar
• Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research, 13, 1–36. doi:10.1111/j.1911-3846.1996.tb00489.x.
   Google Scholar
• DeFranco, A. L., & Lattin, T. W. (2006). Hospitality Financial Management. Hoboken, NJ: Wiley.
   Google Scholar
• Doyle, J., Ge, W., & McVay, S. (2007). Determinants of weaknesses in internal control over financial reporting. Journal of Accounting and Economics, 44(1–2), 193–223.
   Web of Science ®Google Scholar
• Dunn, P. (2004). The impact of insider power on fraudulent financial reporting. Journal of Management, 30(3), 397–412.
   Web of Science ®Google Scholar
• Efendi, J., Srivastava, A., & Swanson, E. P. (2007). Why do corporate managers misstate financial statements? The role of option compensation and other factors. Journal of Financial Economics, 85(3), 667–708.
   Web of Science ®Google Scholar
• FASAB. (1999). Federal financial statements: The revolution is here! Journal of Accountancy, 187(6), 53.
   Google Scholar
• Free, C., Stein, M., & Macintosh, N. (2007). Management controls: The organizational fraud triangle of leadership, culture and control in Enron. Ivey Business Journal, 71(6), 1–10.
   Google Scholar
• Fikes, E. M. (2009). Dishonest associates in the workplace: The correlation between motivation and opportunity in retail among employee theft. Woburn, MA: Butterworth-Heinemann.
   Google Scholar
• Garber, A., & Walkup, C. (2004). Theft protection plan key to locking in profits. Nation's Restaurant News, 38, 92–98.
   Google Scholar
• Ge, W., & McVay, S. (2005). The disclosure of material weaknesses in internal control after the Sarbanes-Oxley Act. Accounting Horizons, 19(3), 137–158.
   Google Scholar
• Geller, N. (1991). Rule out fraud and theft: Controlling your food-service operation. Cornell Hotel and Restaurant Administration Quarterly, 32(4), 55–65.
   Google Scholar
• Gillett, P. R., & Uddin, N. (2005). CFO intentions of fraudulent financial reporting. Auditing: A Journal of Practice and Theory, 24(1), 55–75.
   Web of Science ®Google Scholar
• Glass Lewis & Co. (2006). Why do enterprise multiples predict expected stock returns? Asian Journal of Innovation and Policy, 4(1), 35–54.
   Google Scholar
• Gray, W. R., & Vogel, J. (2002). On the Performance of Cyclically Adjusted Valuation Measures. Available at https://ssrn.com/abstract = 2329948.
   Google Scholar
• Gupta, P., & Nayar, N. (2006). Market reaction to control deficiency disclosures under the Sarbanes-Oxley Act: The early evidence. International Journal of Disclosure and Governance, 4(1), 3–23.
   Google Scholar
• Hamilton, L. C. (2012). Statistics with Stata: version 12. Cengage Learning.
   Google Scholar
• Hammersley, J., Myers, L., & Shakespeare, C. (2008). Market reactions to the disclosure of internal weaknesses and to the characteristics of those weaknesses under section 302 of the Sarbanes Oxley Act of 2002. Review of Accounting Studies, 13(1), 141–161.
   Web of Science ®Google Scholar
• Haswell, S., & Holmes, S. (1989). Estimating the small business failure rate: A reappraisal. Journal of Small Business Management, 27(3), 68.
   Google Scholar
• Hogan, C. E., & Wilkins, M. S. (2008). Evidence on the audit risk model: Do auditors increase audit fees in the presence of internal control deficiencies? Contemporary Accounting Research, 25(1), 219–242.
   Web of Science ®Google Scholar
• Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831–880.
   Web of Science ®Google Scholar
• Kim, H., & Gu, Z. (2006). Predicting restaurant bankruptcy: A logit model in comparison with a discriminant model. Journal of Hospitality & Tourism Research, 30(4), 474–493.
   Google Scholar
• Kincaid, D. R. (2002). Numerical analysis: mathematics of scientific computing (Vol. 2). American Mathematical Soc.
   Google Scholar
• Krippel, G. L., Henderson, L. R., Keene, M. A., Levi, M., & Converse, K. (2008). Employee theft and Coastal Carolina hospitality industry: Incidence, detection, and response (Survey Results 2000, 2005). Tourism and Hospitality Research, 8(3), 226–238.
   Google Scholar
• Langevoort, D. C. (2006). SEC as a lawmaker: Choices about investor protection in the face of uncertainty. Washington University Law Review, 84, 1591–1626.
   Google Scholar
• Levisohn, B. (2009). Experts say fraud likely to rise. Business Week Online. 14.
   Google Scholar
• Lie, E. (2005). On the timing of CEO stock option awards. Management Science, 51(5), 802–812.
   Web of Science ®Google Scholar
• Lister, M. (2007). Institutions, inequality and social norms: Explaining variations in participation. The British Journal of Politics & International Relations, 9, 20–35. doi:10.1111/j.1467-856X.2007.00246.x.
   Google Scholar
• Loebbecke, J. K., & Willingham, J. J. (1988). Review of SEC accounting and auditing enforcement releases, Working paper, University of Utah.
   Google Scholar
• Martinek, K. (2005). Outbreak of Vibrio parahaemolyticus gastroenteritis associated with Alaskan oysters. The New England Journal of Medicine, 353(2), 1463–1470.
   PubMedGoogle Scholar
• Nelson, M., Elliot, J., & Tarpley, R. (2002). Evidence from auditors about managers' and auditors' earnings management decisions. The Accounting Review, 77, 175–202.
   Web of Science ®Google Scholar
• Olsen, M., & Roper, A. (1998). Research in strategic management in the hospitality industry. International Journal of Hospitality Management, 17, 111–124.
   Google Scholar
• Olsen, M. D., West, J., & Tse, E. C. (1998). Strategic management in the hospitality industry (2nd ed.). New York, NY: Wiley.
   Google Scholar
• Oswald, A. J. (1997). Happiness and economic performance. The Economic Journal, 107(445), 1815–1831.
   Web of Science ®Google Scholar
• Parsa, H. G., Self, J. T., Njite, D., & King, T. (2005). Why restaurants fail. Cornell Hotel and Restaurant Administration Quarterly, 46(3), 304–322.
   Google Scholar
• Persons, O. S. (1995). Using financial statement data to identify factors associated with fraudulent financial reporting. Journal of Applied Business Research, 11(3), 38.
   Google Scholar
• Rezaee, Z. (2005). Causes, consequences and deterrence of financial statement fraud. Critical Perspectives on Accounting, 16(3), 277–298.
   Google Scholar
• Rosner, R. L. (2003). Earnings manipulation in failing firms. Contemporary Accounting Research, 20(2), 361–408.
   Web of Science ®Google Scholar
• Rubin, D. B. (1996). Multiple imputation after 18+ years. Journal of the American statistical Association, 91(434), 473–489.
   Web of Science ®Google Scholar
• SEC. (2014, October). Management's reports on internal control over financial reporting and certification of disclosure in exchange act periodic reports: Frequently Asked Questions. Washington, DC: Author.
   Google Scholar
• Sidel, V. W. (Ed.). (2007). War and public health. Oxford University Press.
   Google Scholar
• Skousen, C. J., Smith, K. R., & Wright, C. J. (2009). Detecting and predicting financial statement fraud: The effectiveness of the fraud triangle and SAS No. 99. Advances in Financial Economics, 13(1), 53–81.
   Google Scholar
• Summers, S. L., & Sweeney, J. T. (1998). Fraudulently misstated financial statements and insider trading: An empirical analysis. Accounting Review, 131–146.
   Web of Science ®Google Scholar
• Tellis, G. (1986). Beyond the many faces of price: An integration of pricing strategies. Journal of Marketing, 50(4), 146–160.
   Web of Science ®Google Scholar
• Vallens, A., & Cook, G. (2001). The importance of reputation. Risk Management, 55(4), 36–46.
   Google Scholar
• Vermeer, T. E. (2003). Market for former Andersen clients: Evidence from government and non-profit sectors. Journal of Accounting and Public Policy, 27(5), 394–408.
   Google Scholar
• Wang, D. (2012). The impact of PCAOB Auditing Standard No. 5 on audit fees and audit quality. Accounting Horizons, 26(3), 493–511.
   Web of Science ®Google Scholar
• Whitfield, S. (2013). Internal control and management guidance. Journal of Accounting and Economics, 48(2), 190–209.
   Google Scholar
• Yap, B. (2008). How well do financial ratios and multiple discriminant analysis predict company failures in Malaysia. International Research Journal of Finance and Economics, 54, 166–175.
   Google Scholar
• Young, J. (2005). Changing our questions: Reflections on the corporate scandals. Accounting and the Public Interest, 5(1), 1–13.
   Google Scholar
• Zimmerman, J. L. (2003). Conjectures regarding empirical managerial accounting research. Journal of Accounting and Economics, 32(1–3), 411–427.
   Web of Science ®Google Scholar