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Accounting fraud, business failure and creative auditing: A micro-analysis of the strange case of Sunbeam Corp

Author

Listed:
  • Marisa Agostini

    (Department of Management, Università Ca' Foscari Venezia)

  • Giovanni Favero

    (Department of Management, Università Ca' Foscari Venezia)

Abstract

This paper puts under the magnifying glass the path to failure of Sunbeam Corp. and emphasizes the reasons of its singularity and exceptionality. This corporate case emerges as an outlier from the analysis of the US fraud cases mentioned by WebBRD: the consideration of the time between fraud disclosure and the final bankruptcy reveals the presence of an exceptional sampled case. In fact, the maximum value of this temporal variable is estimated equal to 840 days: it is really far from the range estimated by the survival function for the entire sample and it refers to Sunbeam Corp. Different hypotheses are evaluated in the paper, starting from the consideration of Sunbeam's history peculiarities: fraud duration, scapegoating and creative auditing represent the three main points of analysis. Starting from a micro-analysis of this case that the SEC investigated in depth and this work describes in detail, inputs for future research are then provided about more general problems concerning auditing and accounting fraud.

Suggested Citation

  • Marisa Agostini & Giovanni Favero, 2012. "Accounting fraud, business failure and creative auditing: A micro-analysis of the strange case of Sunbeam Corp," Working Papers 12, Venice School of Management - Department of Management, Università Ca' Foscari Venezia, revised Mar 2013.
    • Handle: RePEc:vnm:wpdman:25
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    References listed on IDEAS

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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Sunbeam gets toasted
      by bbatiz in NEP-HIS blog on 2013-01-25 18:53:17

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    Cited by:

    1. Marisa Agostini & Riccardo Cella & Giovanni Favero, 2017. "Accounting fraud in a pre-modern historical context: An accounting investigation on the use of market (fair) value in the second half of the eighteenth century in Venice," Working Papers 12, Venice School of Management - Department of Management, Università Ca' Foscari Venezia.

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    More about this item

    Keywords

    accounting fraud; failure path; creative auditing; historical micro-analysis;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • N80 - Economic History - - Micro-Business History - - - General, International, or Comparative
    • N82 - Economic History - - Micro-Business History - - - U.S.; Canada: 1913-
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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