In today’s technological age, fraud has become more complicated, and increasingly more difficult to detect, especially when it is collusive in nature. Different fraud surveys showed that the median loss from collusive fraud is much greater than fraud perpetrated by a single person. Despite its prevalence and potentially devastating effects, collusion is commonly overlooked as an organizational ...

We investigate the effectiveness of proportionate liability in reducing the probability of fraud and audit risk relative to joint and several liability in two strategic audit settings: one that provides conclusive evidence of fraud and one that provides inconclusive evidence of fraud. In both settings the auditor makes an audit effort choice, but in the second setting the auditor also evaluates...

Fraud is one of the besetting evils of our time. While less dramatic than crimes of violence like murder or rape, fraud can inflict significant damage at organizational or individual level. Fraud is a concept that seems to have an obvious meaning until we try to define it. As fraud exists in many different guises, and it is necessary to carefully define what it is and to tailor policies and ini...

This study examines the market valuation of accounting earnings during the period before it is publicly revealed that the earnings are fraudulent. Using both cross-sectional and time-series valuation models, we first find that the market accords less weight to earnings when the accounting numbers are fraudulent. We also show that the market better anticipates the presence of fraud when there is...

We investigate the relation between board composition and operational risk events of financial institutions in the period from 1996 to 2010. Drawing from corporate governance literature, we consider the impact of board characteristics on the likelihood of operational risk events. Overall, our findings suggest that board size is negatively and non-linearly associated with the possibility of oper...

The Federal Reserve Banks of Boston and Atlanta convened a meeting of the Mobile Payments Industry Workgroup (MPIW) in November 2015 to discuss payments in the card-not-present (CNP) environment. Not only are consumers increasingly using mobile devices to initiate CNP payments; but the e-commerce fraud rate in the U.S. is expected to increase significantly as EMV2 chip card migration progresses...