Fraudulent Financial Reporting: How Do We Close the Knowledge Gap?
Fraudulent financial reporting (FFR) is an issue of great concern to the business community. Previous academic and professional research offers important insights into the FFR problem; however, FFR remains difficult to detect and represents an ongoing, serious threat to investor confidence. We believe that much more remains to be learned about FFR, and we offer a host of future research questions, using the fraud diamond to organize our thinking. Answering these questions will require a “marriage” between researchers, who have the necessary analysis skills, and practitioners and regulators, who have access to rich data underlying instances of FFR. A national fraud center, as envisioned by the U.S. Treasury’s Advisory Committee on the Auditing Profession (ACAP 2008), may provide the platform for bringing together researchers and those with data, so that our understanding of FFR can expand. Such understanding is the key to preventing and detecting FFR in the future. Fraudulent Financial Reporting: How Do We Close the Knowledge Gap?