IDEAS home Printed from https://ideas.repec.org/a/bla/ausact/v26y2016i1p21-33.html
   My bibliography  Save this article

Business Continuity in the Face of Fraud and Organisational Change

Author

Listed:
  • Julie Margret
  • Zahirul Hoque

Abstract

type="main"> We examine business continuity in the context of fraud and accounting for an organisation as a going concern. The issues addressed are timely and focus on two points. First, fraudulent activities in business are increasing worldwide with related costs reaching trillions of US dollars. Second, the conventional accounting concept of a going concern that typically signifies business continuity is arguably formed on a static view of business. As such, this view does not help mitigate opportunities for fraudulent statements of account. We contribute to the accounting literature by emphasising the dynamic nature of business and in doing so extend the discussion on Type 1 and Type 2 going concern errors. In that context we provide evidence of a possible Type 3 going concern error in an organisation's financial reporting. Drawing on an international fraud case involving an Indian company, Satyam, we illustrate the adaptive behaviour of resilient business organisations. The findings of our study show that even in the face of fraud dynamic, adaptive organisations can achieve business continuity.

Suggested Citation

  • Julie Margret & Zahirul Hoque, 2016. "Business Continuity in the Face of Fraud and Organisational Change," Australian Accounting Review, CPA Australia, vol. 26(1), pages 21-33, March.
    • Handle: RePEc:bla:ausact:v:26:y:2016:i:1:p:21-33
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/auar.12079
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tucker, Robert R. & Matsumura, Ella Mae & Subramanyam, K. R., 2003. "Going-concern judgments: An experimental test of the self-fulfilling prophecy and forecast accuracy," Journal of Accounting and Public Policy, Elsevier, vol. 22(5), pages 401-432.
    2. Graeme Dean & Frank Clarke & Julie Margret, 2008. "Solvency Solecisms: Corporate Officers' Problematic Perceptions," Australian Accounting Review, CPA Australia, vol. 18(1), pages 71-80, March.
    3. Tom Tuttle & John Heap, 2008. "Green productivity: moving the agenda," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 57(1), pages 93-106, January.
    4. Barnes, Paul, 2004. "The auditor's going concern decision and Types I and II errors: The Coase Theorem, transaction costs, bargaining power and attempts to mislead," Journal of Accounting and Public Policy, Elsevier, vol. 23(6), pages 415-440.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Monica Ramos Montesdeoca & Agustín J. Sánchez Medina & Felix Blázquez Santana, 2019. "Research Topics in Accounting Fraud in the 21st Century: A State of the Art," Sustainability, MDPI, vol. 11(6), pages 1-31, March.
    2. António Samagaio & Tiago Andrade Diogo, 2022. "Effect of Computer Assisted Audit Tools on Corporate Sustainability," Sustainability, MDPI, vol. 14(2), pages 1-20, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Linda Myers & Jaime Schmidt & Michael Wilkins, 2014. "An investigation of recent changes in going concern reporting decisions among Big N and non-Big N auditors," Review of Quantitative Finance and Accounting, Springer, vol. 43(1), pages 155-172, July.
    2. Epaulard, Anne & Zapha, Chloé, 2022. "Bankruptcy costs and the design of preventive restructuring procedures," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 229-250.
    3. Mo, Phyllis L.L. & Rui, Oliver M. & Wu, Xi, 2015. "Auditors' going Concern Reporting in the pre- and post-bankruptcy Law Eras: Chinese Affiliates of Big 4 Versus Local Auditors," The International Journal of Accounting, Elsevier, vol. 50(1), pages 1-30.
    4. Barnes, Paul, 2013. "The effects on financial statements of the litigation cost rule in a civil action for negligence against the auditor," Journal of Contemporary Accounting and Economics, Elsevier, vol. 9(2), pages 170-182.
    5. Hategan Camelia Daniela & Predictor of Insolvency Risk, 2018. "Auditor's Uncertainty About Going Concern – Predictor of Insolvency Risk," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 605-610, December.
    6. Sarowar Hossain & Jenny Jing Wang, 2023. "Abnormal audit fees and audit quality: Australian evidence," Australian Journal of Management, Australian School of Business, vol. 48(3), pages 596-624, August.
    7. Aleksandra Sus & Rafał Trzaska & Maciej Wilczyński & Joanna Hołub-Iwan, 2023. "Strategies of Energy Suppliers and Consumer Awareness in Green Energy Optics," Energies, MDPI, vol. 16(4), pages 1-23, February.
    8. G. Meeks & J. G. Meeks, 2009. "Self‐Fulfilling Prophecies of Failure: The Endogenous Balance Sheets of Distressed Companies," Abacus, Accounting Foundation, University of Sydney, vol. 45(1), pages 22-43, March.
    9. Li, Xuelian & Liu, Ming, 2024. "Abnormal audit fees and financial reporting quality: A meta-analysis," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).
    10. Waymond Rodgers & Andrés Guiral & José A. Gonzalo, 2019. "Trusting/Distrusting Auditors’ Opinions," Sustainability, MDPI, vol. 11(6), pages 1-16, March.
    11. Andrés Guiral & Waymond Rodgers & Emiliano Ruiz & José Gonzalo, 2010. "Ethical Dilemmas in Auditing: Dishonesty or Unintentional Bias?," Journal of Business Ethics, Springer, vol. 91(1), pages 151-166, February.
    12. Yu-Ying Lin, Eugene & Chen, Ping-Yu & Chen, Chi-Chung, 2013. "Measuring green productivity of country: A generlized metafrontier Malmquist productivity index approach," Energy, Elsevier, vol. 55(C), pages 340-353.
    13. Antony Young & Yi Wang, 2010. "Multi-risk level examination of going concern modifications," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(8), pages 756-791, September.
    14. SARUYAMA Sumio & Peng XU, 2019. "Going Concern Notes, Downsizing, and Exit," Discussion papers 19001, Research Institute of Economy, Trade and Industry (RIETI).
    15. Julia Gray, 2009. "International Organization as a Seal of Approval: European Union Accession and Investor Risk," American Journal of Political Science, John Wiley & Sons, vol. 53(4), pages 931-949, October.
    16. Michael Bradbury & Graeme Dean & Frank L. Clarke, 2009. "Incentives for Non‐Disclosure by Corporate Groups," Abacus, Accounting Foundation, University of Sydney, vol. 45(4), pages 429-454, December.
    17. Nirosh Karuppu, 2009. "Evidence on Auditors Use of Business Continuity Models as an Analytical Procedure," Accounting & Taxation, The Institute for Business and Finance Research, vol. 1(1), pages 63-74.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausact:v:26:y:2016:i:1:p:21-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1035-6908 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.