Connecting Organizational Culture to Fraud: Buffer/Conduit Theory
Advances in Accounting Behavioral Research
ISBN: 978-1-83867-402-1, eISBN: 978-1-83867-401-4
Publication date: 23 July 2020
Abstract
Extant theory tends to treat Organizational Culture (OC) and fraud-related values as static, characterizing culture as synonymous with potential ethical values − but devoting less attention to how the culture and values arose and where they are headed. Buffer/conduit theory proposes that accountants learn to use a taxonomy containing three dynamic layers: collective fraud orientation, a buffer/conduit layer, and individual fraud orientation. The middle layer contains OC-related internal controls that buffer the orientation layers from spreading fraud-encouraging values, and serve as conduits transmitting fraud-deterring values − or, when controls do not function as intended, transmitting fraud-encouraging values. A factor analysis of 11 indicators of this three-layer taxonomy suggests that older generations of accounting practitioners apply the taxonomy, but millennials do not. Predisposition to commit fraud is especially salient to internally focused millennials, who uniquely perceive recruitment and training as compensating mechanisms and as collective buffers.
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Acknowledgements
Acknowledgments
We thank Dana Wasylycia for research assistance. We also thank Barbara Apostolou (West Virginia University), Mitch Casselman (St. John's University), Jack Dorminey (West Virginia University), Tim Fogarty (Case Western Reserve University), Leah Foreman (Google), Mel Houston (Attorney at Law), Phil Reckers (Arizona State University), Dave Sinason (Northern Illinois University), Stefanie Tate (University of Massachusetts Lowell), John Thornton (Azusu Pacific State University), Greg Trompeter (University of Central Florida), and Ally Zimmerman (Northern Illinois University) for their excellent comments on earlier drafts of this chapter.
Citation
Beaulieu, P. and Reinstein, A. (2020), "Connecting Organizational Culture to Fraud: Buffer/Conduit Theory", Karim, K.E. (Ed.) Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, Vol. 23), Emerald Publishing Limited, Leeds, pp. 21-45. https://doi.org/10.1108/S1475-148820200000023002
Publisher
:Emerald Publishing Limited
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