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Fraud Dynamics and Controls in Organizations – A Replication and Social-Norm-Theory Extension
Citation Link: https://doi.org/10.15480/882.13569
Publikationstyp
Conference Presentation
Date Issued
2024-05-16
Sprache
English
Other Contributor
Robertson, Clara
Michalka, Magdalena
TORE-DOI
Citation
46th Congress of the European Accounting Association (EAA 2024)
Contribution to Conference
Fraud exists in many organizations and generates large financial losses worldwide. Davis and Pesch (2013) developed an agent-based model to investigate the empirically difficult-to-capture phenomenon of fraud and provide valuable managerial guidance on fraud dynamics and anti-fraud interventions. This study replicates and extends their original model to test their results' and associated recommendations' internal and external validity. Our results of the close replication show that we can reproduce most of their findings, indicating a high internal validity of their results. Our extension exchanges the original behavioral imitation concept, by implementing social-norm theory as an alternative mechanism. As a result of modifying this key component of the model, fraud dynamics are less volatile, and only some qualitative results regarding anti-fraud interventions remain valid. In practical terms, this suggests a greater level of organizational inertia regarding fraudulent behavior than what the original model proposed: good news concerning the risk of fraud spreading but bad news when it comes to the eradication of fraudulent behavior.
Subjects
fraud dynamics
fraud controls
social norm theory
ABM
model replication
DDC Class
360: Social Problems, Social Services
302: Social Interaction
519: Applied Mathematics, Probabilities
Publication version
publishedVersion
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Name
2024-05-16_EAA_Fraud Control_Eckert.pdf
Size
1.17 MB
Format
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