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Sustainability 2018, 10(3), 588; https://doi.org/10.3390/su10030588

An Investigation of the Influence of the Worldwide Governance and Competitiveness on Accounting Fraud Cases: A Cross-Country Perspective

1
Faculty of Economics and Business, Institute of Accounting and Finance, Controlling Department, University of Debrecen, Ihrig Károly PhD School, 4028 Debrecen, Hungary
2
Faculty of Economics and Business, Institute of Applied Informatics and Logistics, University of Debrecen, 4032 Debrecen, Hungary
3
Faculty of Economics and Business, Institute of Sectoral Economics and Methodology, University of Debrecen, 4032 Debrecen, Hungary
4
Faculty of Economics and Business, Institute of Accounting and Finance, Controlling Department, University of Debrecen, 4028 Debrecen, Hungary
*
Author to whom correspondence should be addressed.
Received: 30 January 2018 / Revised: 16 February 2018 / Accepted: 22 February 2018 / Published: 26 February 2018
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Abstract

This article examines how worldwide governance, global competiveness, and other institutional determinants have influenced the number of accounting fraud cases in several countries. The researchers have focused more closely on the importance of ‘good governance’ as one of the indicators of development objectives in itself. The institutional perspective is employed to explain the complexity of frauds in different societies which can be compatible for the purposes of international judgments in order to increase the effectiveness of previous forensic accounting theories. In this paper, a linear regression model is tested where governance, competitiveness, and other institutional variables are associated with a measure of accounting fraud cases. From our results, we can merely claim that an increased level of controlled corruption and political stability might reduce the number of fraud cases in various countries, while more effective and independent governance services with a higher freedom of expression seemed to increase them. The existence of accounting crimes also appeared to be a suitable proxy of better competitiveness. Anglo-Saxon countries have more stated fraud cases than other countries, attributed, perhaps, to the finest commercial courts with the most professional and least corrupt judges in the world, with centuries of precedent cases and experience in dealing with fraud. Moreover, we believe that a better understanding of fraud detection is a potentially important element in forensic accounting analytics in the success of governance policies to enhance development and reduce the risk of bankruptcies related to the reported fraud cases of enterprises. View Full-Text
Keywords: worldwide governance; global competitiveness; accounting fraud cases; institutions; cross-country analysis worldwide governance; global competitiveness; accounting fraud cases; institutions; cross-country analysis
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Sadaf, R.; Oláh, J.; Popp, J.; Máté, D. An Investigation of the Influence of the Worldwide Governance and Competitiveness on Accounting Fraud Cases: A Cross-Country Perspective. Sustainability 2018, 10, 588.

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