Predictive Factors in Financial Fraud and Malfeasance from 1950-2018

摘要

Financial fraud is a pervasive problem in corporations in particular regards to CEOs and CFOs. This study is a meta-analysis of literature involving fraud motivating factors among CEOs and CFOs. The literature review describes and illustrates the theories and models used to predict and analyze financial fraud. We find that a myriad of factors including lack over oversight and an ability to rationalize the fraud are predictors of fraud. Pressure from the CEO was listed as the top reason for fraudulent activities along with external pressures from the market to hit earnings expectations, keep stock price high, and keep their jobs. In addition, younger and less educated CEOs and CFOs are more apt to participate in fraud with the progression of fraudulent activities starting small and growing over time.