Competition, Cost Analytics, and Offsetting Strategies: Pressures and Opportunities on the Fraud Triangle

Simple item page
dc.contributor.authorDu Pon, Adam Watanabeen
dc.contributor.committeechairDavidson, Robert H.en
dc.contributor.committeememberEasterwood, John C.en
dc.contributor.committeememberErickson, Matthew Jamesen
dc.contributor.committeememberVance, Marshall Daviden
dc.contributor.departmentAccounting and Information Systemsen
dc.date.accessioned2021-04-06T08:00:17Zen
dc.date.available2021-04-06T08:00:17Zen
dc.date.issued2021-04-05en
dc.description.abstractThis study introduces industry competition factors to fraud models to examine how competition associates with fraud risk. I argue that industry competition eclipses many firm-level determinants in their association with fraud risk, and that the cost of poor information elevates fraud risk as competition increases. I find that fraud risk is higher for firms in industries with 1) more substitutable products and services, 2) greater threats of new entry, and 3) larger incumbent pools of competitors, and that substitution exceeds every firm-level variable except size in its relevance with fraud risk. Cross-sectionally, I provide evidence that industry-wide non-adoption of advanced cost analytics (i.e. using obsolete, distortionary standard costing practices) may exacerbate the fraud-risk effects of competition, especially product substitution: a one standard deviation increase in substitution associates with over double the fraud risk for firms in industries typified by obsolete costing practices. I also find that different strategies vary in their fraud-offsetting associations dependent on the type of competition most prevalent in an industry. Together, these findings shed light on how the effects of industry competition may subsume or surpass most firm-level fraud determinants and provide evidence of previously unidentified drawbacks of obsolete cost accounting systems.en
dc.description.abstractgeneralElements of industry competition help explain a firm's fraud risk. I find that bringing competition variables into firm-level fraud models helps explain a large portion of the firm's fraud risk, and that the effects of competition more strongly associate with fraud risk than most firm-level attributes. The results also indicate that the effects of competition on fraud risk may be even worse in industries where obsolete cost accounting practices remain widespread: the effects of price competition in such industries associates with significantly greater fraud risk than in other industries. Additional findings include the implied fraud-risk-reducing effects of different business strategies, depending on which type of competition is most intensive around a firm. Altogether, this study sheds light on the importance of including industry competition effects when assessing fraud risk, especially when a firm's or its peers' cost accounting system quality is poor and price competition is high.en
dc.description.degreeDoctor of Philosophyen
dc.format.mediumETDen
dc.identifier.othervt_gsexam:29653en
dc.identifier.urihttp://hdl.handle.net/10919/102937en
dc.language.isoenen
dc.publisherVirginia Techen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectproduct market competitionen
dc.subjectfrauden
dc.subjectinformation environmenten
dc.subjectinternal information qualityen
dc.subjectobsolete costingen
dc.subjectcost analyticsen
dc.titleCompetition, Cost Analytics, and Offsetting Strategies: Pressures and Opportunities on the Fraud Triangleen
dc.typeDissertationen
thesis.degree.disciplineAccounting and Information Systemsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.nameDoctor of Philosophyen

Files

Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
Du_Pon_AW_D_2021.pdf
Size:
1.64 MB
Format:
Adobe Portable Document Format
Download

Collections

Doctoral Dissertations