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http://hdl.handle.net/10397/74233
Title: | Fraudulent financial reporting and technological capability in the information technology sector : a resource-based perspective | Authors: | Fung, MK | Issue Date: | May-2019 | Source: | Journal of business ethics, May 2019, v. 156, no. 2, p. 577-589 | Abstract: | Motivated by the disproportionately high incidence of fraudulent financial reporting in the IT sector where technological capability is a major source of competitive advantage, this study investigates the possible relationship between technological capability and fraud probability in the IT sector. Technological capability is measured by a firm’s technical efficiency relative to peers in transforming cumulative R&D resources into innovative output, which is a source of competitive advantage, according to the resource-based view (RBV) of the firm. Technical efficiency is estimated via data envelopment analysis. A sample of fraud firms taken from Accounting and Auditing Enforcement Releases is matched with control samples of non-fraud firms. Consistent with the RBV, technological capability is found to have a negative and economically significant effect on fraud probability. Moreover, fraud probability is insignificantly associated with the scale efficiency of innovative activities, as investment in R&D resources per se is not a source of sustainable competitive advantage. | Keywords: | Fraudulent financial reporting Information technology sector Resource-based view Technological capability |
Publisher: | Springer | Journal: | Journal of business ethics | ISSN: | 0167-4544 | EISSN: | 1573-0697 | DOI: | 10.1007/s10551-017-3605-4 | Rights: | © Springer Science+Business Media B.V. 2017 This version of the article has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use (https://www.springernature.com/gp/open-research/policies/accepted-manuscript-terms), but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: http://dx.doi.org/10.1007/s10551-017-3605-4 |
Appears in Collections: | Journal/Magazine Article |
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