After the Great Recession of 2007 there was a spotlight on executive compensation. The magnitude and structure of executive pay became an area of concern to the public. As a result, company management across all sectors had to find a way to offer competitive compensation plans that aligned the interest of shareholders with that of executives. The outcome was an increased focus on tying executive pay to company performance. The level of fixed-pay incorporated into target compensation began to decreases rapidly and was replaced by “at-risk” compensation. For some, this was a major achievement in the world of executive compensation, however, others view this change as potentially dangerous. I chose to analyze the pay-mix structure and annual incentive plans of a group of bellwether companies to see if this transition is increasing company’s exposure to fraud. In this essay I attempt to tie increases in at-risk pay to increases in fraud risk, while identifying incentive goals affected by common fraud practices.

"Mémoire présenté à la Faculté des études supérieures en vue de l'obtention du grade de maîtrise en droit option droit des affaires". Ce mémoire a été classé parmi les 15% des mémoires de la discipline. / Il se pose présentement un problème de compréhension du concept de malhonnêteté en matière de fraude. Pour fms de rappel, la fraude peut être commise par mensonge, par supercherie ou par tout autre moyen dolosif. Cette dernière notion, selon l'état actuel de la jurisprudence sera évaluée selon un critère objectif. C'est donc en fonction de la personne raisonnable que l'on se référera afin de déterminer du caractère malhonnête de la conduite. Or, la notion de malhonnêteté n'étant pas défmie, il en résulte incertitude et confusion surtout en matière de crimes économiques. Considérant que les administrateurs sont assujettis en droit des sociétés à une obligation de loyauté et d'honnêteté, il s'agira de s'inspirer des principes développés en cette matière afm de dégager certaines constantes qui nous permettront de déterminer ce qui constitue une conduite malhonnête. La première partie se veut un exposé sommaire des grands principes régissant le droit corporatif. Y sont décrites certaines conduites considérées comme malhonnêtes en droit des sociétés. De cette analyse, il ressort que la malhonnêteté est davantage définie en relation au projet commun des investisseurs qu'en fonction d'un droit de propriété. La notion se divise ainsi autour de deux grands axes, à savoir, les conflits horizontaux et les conflits verticaux. La deuxième partie se concentre sur le droit criminel. Y sont repris, en matière de fraude les conduites considérées comme faisant partie de la catégorie des «autres moyens dolosifs» et décrites par la juge Mclachlin. Au besoin, une référence aux principes du droit corporatif est faite. D'autres infractions, telles les commissions secrètes, les délits d'initiés et le vol sont examinées. La malhonnêteté en droit criminelle est davantage définie en relation avec le droit de propriété. Toutefois, le manque de loyauté se voulant également dénoncé, la notion d'intérêt de la compagnie, comme en matière de droit corporatif présente toute sa pertinence. / There presently is a problem regarding the comprehension of the concept of dishonesty relating to fraud. Fraud can be the result of deceit, falsehood or other fraudulent means. This last notion is determined objectively, by reference to what a reasonable person would consider to be a dishonest act. Considering that the notion of dishonesty has no definition, a confusion exists especially when it cornes to economic crimes. Due to the fact that directors are compelled to respect an obligation of good faith and loyalty, we will refer to the general principles that exist in corporate law in order to define what can be qualified as dishonest behaviour. The first part is a summary of the general principals relating to corporate law. In fuis part we describe sorne behaviours which are considered as dishonest. From this analysis, we have come to the conclusion that dishonesty is understood as being an obstacle to the common project ofthe investors, and not in relation to property. The second part relates to criminal law. Some of the behaviours that were described as being part of other fraudulent means by justice McLachlin are analyzed. A reference to the general principles of corporate law is made when needed. Other offences like secret commissions and insider trading are also part of the analysis. Dishonesty pertaining to criminal law is described in relation to property. However, a lack of loyalty being also denounced, the notion of the best interest of the company, as in corporate law, remains relevant.

This study examines the effects of using the internal audit function as a training ground for management and fraud magnitude on internal auditor fraud reporting decisions. Using a 2x2 between-participants experiment, the current study manipulates the use of the internal audit function as a management training ground (used as a training ground vs. not used as a training ground) and fraud magnitude (large fraud, defined as 30 percent of net income vs. small fraud, defined as one percent of net income). The results indicate that internal auditors may be less likely to report a fraud to their superior when the internal auditors are being groomed for management positions. No effect is found for fraud magnitude, as respondents indicated a similar willingness to report small frauds as large frauds. These findings contribute to the whistleblowing literature and the internal audit objectivity literature by demonstrating that undesirable repercussions associated with using the internal audit function as a management training ground can extend to the internal auditor fraud reporting decision.

Approved for public release; distribution is unlimited. / (DFAS) vendor payment transactions through Unsupervised Modeling (cluster analysis). Clementine Data Mining software is used to construct unsupervised models of vendor payment data using the K-Means, Two Step, and Kohonen algorithms. Cluster validation techniques are applied to select the most useful model of each type, which are then combined to select candidate records for physical examination by a DFAS auditor. Our unsupervised modeling technique utilizes all the available valid transaction data, much of which is not admitted under the current supervised modeling procedure. Our procedure standardizes and provides rigor to the existing unsupervised modeling methodology at DFAS. Additionally, we demonstrate a new clustering approach called Tree Clustering, which uses Classification and Regression Trees to cluster data with automatic variable selection and scaling. A Recommended SOP for Unsupervised Modeling, detailed explanation of all Clementine procedures, and implementation of the Tree Clustering algorithm are included as appendices. / Major, United States Marine Corps

違規給企業帶來的主要後果是企業名譽的損失。然而，我們對以下問題卻知之甚少：企業在違規事件中是怎樣損失名譽的？為什麼同樣程度的違規給不同企業帶來的名譽損失卻不同？等等。本文綜合了來自犯罪學、財務學和社會心理學方面的文獻，把企業名譽定義為利益相關者對企業的情感，同時把違規事件看成是導致這種情感變化的誘因。 / 本文構建了一個綜合的理論模型，研究企業股東和企業自身的情感和情感變化。首先，本文提出，企業違規違反了股東對企業的道德期望和基本情感，使股東的情感發生偏移，並最終導致企業名譽的損失。在情感偏移的形成過程中，股東傾向于根據違規線索的診斷性特徵，把他們的基本情感用作透視鏡或者參照點來評價違規企業。第二，本文認為，違規企業通過在致歉公告中列出恢復性行動或語言，可以恢復股東對企業的基本情感並且減少企業名譽的損失。然而在情感恢復過程中，股東傾向于將恢復性行動或語言的心理距離與違規線索的心理距離進行比較，並據此調整他們對企業的評價和情感。第三，與其他違規企業相比，那些表達了愧疚感的違規企業在未來會約束自己的行為，降低了反復違規的傾向。但是隨著本次懲罰強度的不同，以及企業直接或間接地被懲罰經歷的不同，違規企業對本次懲罰的目的和道德意義的評價也會不同，並由此影響企業表達愧疚感的傾向。 / 本文的貢獻主要集中在以下四個方面。首先，通過強調情感在企業和股東關係中的重要性，豐富了關於公司治理的研究。第二，本文從情感視角去探討存在于股東和企業在資訊評價中各種的偏見，而這些偏見會影響他們對違規事件的情感和行為反應，以此拓展了集中於經濟視角的企業違規研究。第三，本文通過借鑒解釋層次理論中的觀點來研究企業恢復性行動和語言的特徵以及他們在股東情感恢復和企業榮譽恢復過程中的作用，這豐富了關於企業層的影像管理和危機管理研究。第四，本文通過強調企業內化懲罰在約束企業違規行為方面的作用，這對補充了關於懲罰的研究，並具有現實意義。 / A consequence of corporate fraud studied in the literature is reputational penalty on the fraud firm. However, little is known about how a fraud firm loses its reputation after the fraud incident and why firms receive different levels of reputational penalty given the same level of fraud severity. Integrating literatures from criminology, finance, and social psychology, this dissertation conceptualizes firm reputation as stakeholders’ (mainly shareholders here) sentiment toward the firm and a fraud incident as a trigger of shareholders’ sentiment changes. / In this dissertation, I develop an integrated model that examines the sentiment changes of shareholders and sentiment restoration efforts made by the fraud firms. In the first study, I propose that corporate fraud violates shareholders’ normative expectations and fundamental sentiments toward the fraud firm, which leads to shareholders’ sentiment deflection and subsequently propels them to implement behavioral penalty on the fraud firm, that is, reputational penalty. During the process of sentiment deflection, shareholders tend to use the fundamental sentiment that they have adapted to as reference points to evaluate the fraud firm, depending on the salience of the fraud incident and the salience of the fraud firm. In the second study, I argue that the fraud firm can restore shareholders’ sentiment and minimize its reputation loss by expressing restorative actions in public apology announcement. However, during the process of sentiment restoration, shareholders tend to adjust their evaluation of the firm based on the relative psychological distance of the restorative actions compared with that of the fraud cues and sentiment cues. The third study focuses on guilt sentiments of the fraud firm, which have been found to have long-term impact on the fraud firm by transforming their future behaviors. I propose that fraud firms that express guilt sentiments after fraud punishment are more likely to restrain from repeated fraudulent behaviors in the future. However, variations in punishment intensity, together with the fraud firms’ direct and indirect punishment experiences, will influence their tendency to express guilt sentiments. / This dissertation aims to offer several contributions. First, by underscoring the importance of sentiment in the firm-shareholder relationship, it contributes to the corporate governance literature that mainly uses cognitive frameworks in the analysis. Second, it takes a sentiment approach to explore various biases embedded in shareholders’ and the firm’s evaluation of the informational cues that could influence their sentimental and behavioral reactions to the fraud incident, thus extending the corporate fraud literature that predominantly focuses on economics perspectives. Third, by examining the characteristics of firms’ restorative actions and languages and their effects on shareholders’ sentiment restoration and firm reputational repair, this dissertation contributes to the literatures of corporate turnaround and organizational-level impression management. Finally, it also contributes to the punishment literature by highlighting the internal transformation of the fraud firms, thus providing implications to stock exchange regulator and policy-makers in emerging economies. / Detailed summary in vernacular field only. / Detailed summary in vernacular field only. / Detailed summary in vernacular field only. / Xu, Yuehua. / Thesis (Ph.D.)--Chinese University of Hong Kong, 2012. / Includes bibliographical references (leaves 117-137). / Electronic reproduction. Hong Kong : Chinese University of Hong Kong, [2012] System requirements: Adobe Acrobat Reader. Available via World Wide Web. / Abstract also in Chinese. / ABSTRACT --- p.I / CHINESE ABSTRACT --- p.III / ACKNOWLEDGEMENTS --- p.V / LIST OF TABLES --- p.IX / LIST OF FIGURES --- p.X / Chapter CHAPTER 1 --- INTRODUCTION --- p.1 / Chapter 1.1 --- Motivation and Research Questions --- p.1 / Chapter 1.2 --- Theoretical Framework and Premise --- p.4 / Chapter 1.3 --- Contributions --- p.9 / Chapter 1.4 --- Organization of the Dissertation --- p.11 / Chapter CHAPTER 2 --- STUDY ONE: A SENTIMENT MODEL OF FIRM REPUTATIONAL PENALTY FOLLOWING CORPORATE FRAUD --- p.13 / Chapter 2.1 --- Introduction --- p.13 / Chapter 2.2 --- Theoretical Background --- p.15 / Chapter 2.2.1 --- Corporate Fraud and Reputational Penalty --- p.15 / Chapter 2.2.2 --- Sentiment --- p.19 / Chapter 2.3 --- Theoretical Framework and Hypotheses --- p.21 / Chapter 2.3.1 --- Re-conceptualization of Firm Reputation and Theoretical Framework --- p.21 / Chapter 2.3.2 --- Stimuli - Sentimental Reaction - Behavior: The Process from Fraud Detection to Reputational Penalty --- p.26 / Chapter 2.3.3 --- Adaptive Levels of Moral Sentiment and Sentiment Rigidity --- p.28 / Chapter 2.3.4 --- The Moderating Effects of Cue Diagnosticity and Firm Visibility --- p.30 / Chapter 2.4 --- Methods --- p.34 / Chapter 2.4.1 --- Empirical Setting --- p.34 / Chapter 2.4.2 --- Sample and Data Collection --- p.35 / Chapter 2.4.3 --- Measurement --- p.37 / Chapter 2.5 --- Results --- p.45 / Chapter 2.6 --- Discussion --- p.56 / Chapter CHAPTER 3 --- STUDY TWO: FIRM RESTORATIVE EFFORTS AND REPUTATIONAL REPAIR AFTER CORPORATE FRAUD --- p.59 / Chapter 3.1 --- Introduction --- p.59 / Chapter 3.2 --- Theoretical Background --- p.61 / Chapter 3.2.1 --- Firm Efforts to Turn Around from Fraud Incidents --- p.61 / Chapter 3.2.2 --- Apology --- p.63 / Chapter 3.3 --- Theoretical Framework and Hypotheses --- p.65 / Chapter 3.3.1 --- Sentiment Restoration and Pragmatic Attitudes toward Restorative Efforts --- p.65 / Chapter 3.3.2 --- The Construal Level of Restorative Cues --- p.68 / Chapter 3.3.3 --- The Distance of Problem Cues: The Delay of Punishment --- p.70 / Chapter 3.3.4 --- Shareholders’ Negative Sentimental Reaction: Media Negative Comments --- p.72 / Chapter 3.4 --- Methods --- p.74 / Chapter 3.4.1 --- Sample and Data Collection --- p.74 / Chapter 3.4.2 --- Measurement --- p.75 / Chapter 3.5 --- Results --- p.79 / Chapter 3.6 --- Discussion --- p.84 / Chapter CHAPTER 4 --- STUDY THREE: THE EFFECTS OF PUNISHMENT ON FRAUD FIRMS’ GUILT SENTIMENT EXPRESSION --- p.86 / Chapter 4.1 --- Introduction --- p.86 / Chapter 4.2 --- Theoretical Background: Punishment --- p.88 / Chapter 4.3 --- Theoretical Framework and Hypotheses --- p.90 / Chapter 4.3.1 --- The Expression of Guilt Sentiment and Repeated Fraud --- p.91 / Chapter 4.3.2 --- Punishment Intensity and Guilt Sentiment --- p.93 / Chapter 4.3.3 --- Normalization: The Moderating Effects of Direct and Indirect Punishment Experience --- p.95 / Chapter 4.4 --- Methods --- p.98 / Chapter 4.4.1 --- Sample and Data Collection --- p.98 / Chapter 4.4.2 --- Measurement --- p.99 / Chapter 4.5 --- Results --- p.102 / Chapter 4.6 --- Discussion --- p.110 / Chapter CHAPTER 5 --- DISCUSSION AND CONCLUSION --- p.111 / Chapter 5.1 --- Conclusion --- p.111 / Chapter 5.2 --- Contributions to Theory and Practice --- p.112 / Chapter 5.3 --- Limitations and Implications for Future Research --- p.115 / REFERENCES --- p.117

It is a well-known fact that international trade contracts bear inherently more risk than the trade contracts entered by the parties from the same country. This is due to the differences in business methods and practices used, trade cultures of the parties involved, laws and regulations in the respective jurisdictions. Under these circumstances, it is very important for the seller to have the assurance of that he receives the payment for the goods dispatched and for the buyer to receive the goods what has been ordered. One effective way of having such an assurance is to rely on a letter of credit as an international payment method. But for exporters in particular, this payment method has presented difficulties in meeting the compliance requirements necessary for the payment to be triggered. The UCP 600 published by the International Chamber of Commerce provide the rules that govern letters of credit transactions. At the introduction of the UCP 600, it was aimed to remove wording that could lead to inconsistent application and interpretation, as against the language and style used in the previous version, namely the UCP 500. Highlighting the experiences under UCP 500, the ultimate focus of the revision of the UCP was to minimise the level of litigations that had arisen under the rules provided in the UCP. In several surveys, it has been reported that, nearly 50% of the first presentation for payment under letters of credit are rejected by the banks. This situation implies the fact that the provisions which cover letters of credit transactions are not either clear enough or well understood by the parties involved. Similarly, the decisions made by Courts around the world on issues related to letters of credit have taken different approaches when applying and interpreting the rules. This can clearly be seen by a myriad of controversial judicial standards which have been applied to similar mistakes in documents presented to the bank for payment. This thesis is an investigation into those issues to find out the optimal standards that could be applied to solve the said problems. In doing so, this thesis will strive to ascertain what remedial measures could be taken to address the issues related to examination of documents, the rejection of payment and fraud exception. Key words: International Trade, International Trade Law, Law of Letters of Credit, Uniform Customs and Practice for Documentary Credit 600, Examination of Documents and communicating the decision.

This diploma thesis describes ethics in the profession of external and internal audit. It provides comprehensive overview about ethics, from the basic definitions to business ethics. It deals with audit, its history, organisations, Sarbanes -- Oxley Act and ethical relations of audit profession. It is focused on codes of ethics, auditor act and some standards on internal audit related to ethics. Thesis in its theoretical part also speaks about fraud, its basics, frauds in corporations and audit. Practical part of thesis is focused on concrete fraud cases in relation with (un)ethical behaviour of auditors. It is concerned with history and reasons of fall of Arthur Andersen. It shows its unethical behaviour on fraud examples of its clients, american corporations Enron, WorldCom, Sunbeam and Waste Management. This thesis also describes one of the latest fraud in Olympus. Czech republic is represented by the case of Czech office of Deloitte.

In this study, I explore whether managers and firms are penalized when they face pressures to manage earnings, but chose not to do so. I use periods in which an industry-leading firm inflates earnings fraudulently, and in which the public is unaware of the fraud, as a setting where managers at industry peer firms face pressures to manage earnings. Using the Dechow et al. (2011) F-score, I identify two groups of industry peer firms: one group where firms show no evidence of having managed earnings in response to the industry leader’s fraud, and another group where firms do show evidence of having managed earnings in response to the industry leader’s fraud. I hypothesize that managers of firms in the first group face a penalty in terms of personal compensation, and that the firms they lead face an increase in the cost of equity, but not in the cost of debt. I find evidence of a negative association between the decision to refrain from managing earnings and managerial compensation. However, I also observe declining compensation for managers who do manage earnings over the same period. This latter result precludes me from being able to entirely attribute the drop in compensation for the managers of the first group to the decision to refrain from managing earnings. I find that the cost of equity increases in the period of industry-leader fraud for firms that refrain from managing earnings, but the increase is statistically insignificant. The difference in the change in the cost of equity capital for these firms and for those who manage earnings is insignificant. The latter two results preclude me from being able to entirely attribute the increase in the cost of equity for firms in the first group to the decision to refrain from managing earnings. I find no evidence of changes in the cost of debt for firms in either group.

The United States (U.S.) healthcare system produces an enormous volume of data with a vast number of financial transactions generated by physicians administering healthcare services. This makes healthcare fraud difficult to detect, especially when there are considerably less fraudulent transactions than non-fraudulent. Fraud is an extremely important issue for healthcare, as fraudulent activities within the U.S. healthcare system contribute to significant financial losses. In the U.S., the elderly population continues to rise, increasing the need for programs, such as Medicare, to help with associated medical expenses. Unfortunately, due to healthcare fraud, these programs are being adversely affected, draining resources and reducing the quality and accessibility of necessary healthcare services. In response, advanced data analytics have recently been explored to detect possible fraudulent activities. The Centers for Medicare and Medicaid Services (CMS) released several ‘Big Data’ Medicare claims datasets for different parts of their Medicare program to help facilitate this effort. In this dissertation, we employ three CMS Medicare Big Data datasets to evaluate the fraud detection performance available using advanced data analytics techniques, specifically machine learning. We use two distinct approaches, designated as anomaly detection and traditional fraud detection, where each have very distinct data processing and feature engineering. Anomaly detection experiments classify by provider specialty, determining whether outlier physicians within the same specialty signal fraudulent behavior. Traditional fraud detection refers to the experiments directly classifying physicians as fraudulent or non-fraudulent, leveraging machine learning algorithms to discriminate between classes. We present our novel data engineering approaches for both anomaly detection and traditional fraud detection including data processing, fraud mapping, and the creation of a combined dataset consisting of all three Medicare parts. We incorporate the List of Excluded Individuals and Entities database to identify real world fraudulent physicians for model evaluation. Regarding features, the final datasets for anomaly detection contain only claim counts for every procedure a physician submits while traditional fraud detection incorporates aggregated counts and payment information, specialty, and gender. Additionally, we compare cross-validation to the real world application of building a model on a training dataset and evaluating on a separate test dataset for severe class imbalance and rarity. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2019. / FAU Electronic Theses and Dissertations Collection

This thesis is an investigation of identity theft, although not a new crime it has recently attracted public concern. This concern has led to both federal and state governments to establish new laws to provide increased protection. Government agencies and the media have warned the public that an individual's social security number and other personal information are the tools that unscrupulous criminals can use to gain access to an identity. Once your identity is assumed criminals can use that new identity to obtain goods and services freely available in this world of instant credit lines. The purpose of this study is to examine the magnitude and characteristics of identity theft. The objective is to determine if government official's claims and the media's portrayal of the substantial rise in identity theft incidents are supported empirically. The data for this study comes from police records located in one southern-metropolitan city; from this two separate data sets were drawn. A case study methodology was selected for this project. The results indicate that the identity theft trend is different than the trends for other theft related offenses -- credit card fraud, check fraud, robbery and motor vehicle theft. The data suggest that identity theft is increasing more rapidly than the other theft orientated offenses. However, future research should be conducted to help determine if the trend found in this study is a more a reflection of criminal behavior then of changes in reporting. Additionally, the available literature on identity theft suggested that attaining an arrest for identity theft is especially difficult. The empirical evidence found in this study is mixed on this point. Finally, the demographic characteristics of identity thieves in the area of study do not conform to other economically motivated offenders. African American female offenders make up a significantly large proportion of offenders. Determining the cause of these patterns would at this point be premature, but the existence of patterns warrants further research. In conclusion, this study finds support for the expressed belief by media, private organizations, and government officials that there is greater reporting and recoding of identity theft.