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Using the ethical consequentialist theory of utilitarianism, this paper aims to demonstrate the correlation between the prosecution of Arthur Andersen LLP and the United States Department of Justice’s (DOJ) increased use of pretrial diversion agreements, both nonprosecution and deferred prosecution agreements (N/DPA) for criminal corporations.

Through an analysis of previous literature, the United States Justice Manual, and data from the Corporate Prosecution Registry, this study examines the trend of N/DPAs from 1992 to 2021. Specifically, the data is examined to assess whether a pattern exists before and after the 2002 prosecution of Andersen.

This study finds an exponential increase of N/DPAs after Andersen’s prosecution. The DOJ’s basis for the increased use of these agreements is rooted in the utilitarian theory that the punishment of criminal corporations should deter and rehabilitate behavior while also maximizing the benefit to society (e.g. shareholders, employees and business community). The justice manual, memorandums and public speeches explicitly promote the use of N/DPAs for corporations to minimize collateral damage and the potential for negative societal impact.

This study applies a utilitarian framework to explain the criminal justice system’s increased use of pretrial diversion agreements for criminal corporations.

By drawing on Belief Perseverance Theory (BPT), this study investigates the pre- and post-perceptions of the First Accounting Course (FAC) differentiating between accounting and non-accounting students in a virtual learning setting at a Gulf Cooperation Council (GCC) university, and explains why students' perceptions have formed.

Adopting a case study approach, this study employs quantitative (anonymous questionnaires) and qualitative (semi-structured interviews) methods.

Responses from 142 financial accounting students indicate that non-accounting majors generally changed the students' perceptions significantly at the end of the semester, whereas students' accounting counterparts had relatively stable perceptions. This study also finds that a large number of non-accounting students perceived the benefits of taking the FAC and generally have less negative perceptions of the accounting profession, which supports the notion that non-accounting students evaluated discrediting information to reassess non-accounting students pre-established perceptions.

This study has several implications as follows: for the accounting education literature on how FAC assists students in changing students' perceptions through the lens of BPT, for professional accounting bodies to find ways to promote accounting careers for students and for educators to increase students’ desire for accounting study and profession.

The findings from this study are expected to contribute to GCC society by providing clarifications towards increasing students’ desire for accounting studies and professions.

Deferred prosecution agreements (DPAs) are the tool of choice for federal prosecutors when adjudicating corporate misconduct. A DPA is a negotiation that permits the allegedly guilty party from undergoing a criminal trial if they avoid committing further wrongdoing for a specified period. This paper aims to examine whether DPAs are a beneficial mechanism for the criminal justice system to use while adjudicating corporate misconduct. By conducting in-depth semi-structured qualitative interviews with 24 practitioners in the legal field and white-collar crime experts, this study identifies the shortcomings and advantages of DPAs and highlights what policy enactments might enhance their application. The study contributes to the existing literature by expanding the narratives used by judicial officials, legal practitioners and white-collar crime scholars on the role of DPAs.

The current study is an in-depth qualitative analysis that explores judicial actors’ and white-collar crime scholars’ opinions on the adoption of DPAs to adjudicate corporate misconduct. The literature on DPAs is currently derived primarily from law and literature reviews published by legal scholars. Clandestine negotiations are not accessible to the public and are frequently kept in sealed files unless a breach of contract occurs, resulting in the case proceeding to trial. Hence, a qualitative analysis is the best approach to evaluate the effectiveness of DPAs. Further, little evidence is available that focuses on the opinions of professionals who have participated in these agreements. The interviews were conducted over Zoom and lasted an average of 43 min, with the longest interview spanning 1 h and 45 min and the shortest interview being 14 minutes. A non-probability sampling method – specifically, snowball sampling – was used to generate a total sample of 24 legal professionals and white-collar crime scholars. Initial participants were found by contacting law offices specializing in white-collar crime litigation and using current networks to attain access to a broader range of participants. Then, 19 participants provided referrals throughout the study. The final sample consisted of nine government officials, eight legal practitioners and seven white-collar crime academics experts. One of the government official interviews was excluded from the final research project due to a lack of expertise in the field of white-collar crime. The interview questions were designed to promote in-depth conversation and insight into personal opinions on the adoption of DPAs. Several inquiries highlighted whether DPAs are an appropriate response to corporate misconduct and whether they reduced recidivism through their intended deterrent effect. Furthermore, several descriptive questions sought to understand which criminal justice actors support the adoption of DPAs in white-collar crime cases and why. Coding of the data was first conducted individually by each author. The researchers then compared thematic findings that reflected consensus.

An immediate theme identifiable in the research is the intrinsic value that DPAs offer in adjudicating corporate wrongdoing. As indicated by a participant, corporate misconduct is not “black or white,” stressing the importance of prosecutors having a middle ground between criminal prosecution and the dismissal of charges. A judicial official indicated that “DPAs are another essential arrow in a prosecutor’s quiver – and something a defense attorney can bargain for” (Respondent 5). Seven government officials and legal practitioners noted that you are unable to send a corporation to jail, and you do not simply want to put them out of business; thus, a DPA is the only tool in which the government can mandate structural change in a company without dismantling the entire entity. Only three academics concurred with the government officials and legal practitioners that DPAs are beneficial and offer prosecutors a vital middle ground. One academic, for example, stated that “DPAs have given U.S Attorney offices that ability to be involved for a considerable amount of time in a company's business, while simultaneously promoting change within the entity” (Respondent 14). Additionally, DPAs ensure that corporations are held criminally liable without triggering an endless cycle of collateral consequences for innocent third parties. One legal practitioner, for example, stated: “Just look at the Enron case; they charged Arthur Andersen with obstruction of justice and dismantled the entire entity they made it where the business was never going to come back. A small subset of individuals, in this case, should have been held responsible but instead, hundreds and if not thousands of people were harmed. With this in mind, DPAs are extremely important, in that it limits collateral consequences because DPAs take a more holistic view that criminal prosecution does not consider” (Respondent 21). Another respondent highlighted that “DPAs are the only tool available that can be employed to change an entire organization structurally” (Respondent 20). Ultimately, the findings suggest that there is a consensus among respondents that DPAs are an appropriate response to corporate misconduct, particularly when the agreement stipulates that a company must hire an external compliance monitor and update their current compliance system. Overall, participants emphasized that these stipulations promote a sense of corporate accountability, provide for the dismissal of guilty employees and mandate structural change. The majority of the respondents (n = 20) insisted that DPAs are advantageous, yet a subset of participants were skeptical of their use in white-collar crime prosecutions. One legal practitioner, for example, noted that “DPAs are political creatures that are awarded as political favors to the largest of corporations that our economy relies upon” (Respondent 17). Another government official confirmed this statement, indicating that “DPAs are a mere slap on the wrist for large corporations – they simply see it as doing business” (Respondent 6). Four academic participants emphasized that DPAs are typically negotiated with multi-level corporations and are not extended to the small businesses that suffer the dire consequences of criminal prosecution. One academic, for instance, stressed that “the question becomes is it fairly applied and being implemented properly. Larger companies are more likely to receive and benefit from a DPA, thus, raising the question of fairness” (Respondent 12). Another academic who was previously a government official stated: “DPAs risk abuse – there have been several instances where prosecutors have forced companies to donate money to favored charities and overstepped their powers. Sometimes DPAs also come with monitors. For example, banks typically have to pay for the auditor, and it becomes extremely intrusive, and it it not clear that they are efficient.”

Several limitations exist in this research. First, it is not a comprehensive study that is representative of the larger population, which limits generalizability. Given the contention of research on DPAs, this qualitative research contributes to the literature, and its findings are likely transferable to multiple settings in which DPAs are used. Second, DPAs are processed and drafted differently across jurisdictions; thus, comparing DPAs across state levels and among departments in the federal government would be equivalent to comparing apples to oranges. This comparison is yet another limitation to the study because criminal justice practitioners operate in both the state and federal jurisdictions. Another challenge in the current study and something that likely will be a problem for future researchers is the difficulty of gaining access to experts in an exclusive field of criminal justice, such as federal prosecutors, Department of Justice officials, federal judges and elite corporate defense attorneys. Ultimately, several obstacles arose during the study, particularly when recruiting participants to gain a large enough sample size to conduct meaningful analysis. This resulted in smaller sample size but rich, in-depth data that achieved saturation among participants.

Several policy implications are identifiable. First, it appears that DPAs are a mainstay of white-collar crime prosecution. No participants advocate for their complete removal from the prosecution process. Participants highlight that DPAs occupy an essential middle-ground between dismissal and criminal charges. Without this mechanism, prosecution would be impeded, and holding corporate criminal actors liable would increasingly become formidable. Although it appears that the system cannot function without DPAs, several respondents emphasize that we must begin to hold individuals accountable alongside corporations. Another policy implication that a minority of participants mentioned within the study involves ensuring that our compliance monitoring system operates appropriately. A majority of participants note that the overarching stipulation that promotes structural change within an organization is adopting a functioning compliance monitoring system, thus, emphasizing the importance of this process operating smoothly and ethically. The selection of an independent compliance monitor may be problematic. For example, a former government compliance monitor notes that not all monitors are experts in the field they are overseeing. A pharmaceutical expert, for example, may be attempting to regulate an automotive organization, which may present unique challenges. An agency of federal professionals dedicated to supervising specific industries such as automotive, pharmaceutical and financial would ensure that organizations are actually implementing the terms of the DPA.

Ultimately, the current research highlights the necessity of empirically studying the benefits and drawbacks of such agreements. Future research on the topic remains onerous due to the scarcity of a centralized database that contains extensive details of DPAs. The present study suggests that the verdict on DPAs is undecided, with more than half of the study's criminal justice professionals advocating for their continued and even increased use. However, about half of the participants, particularly academics, called attention to the agreements’ potential bias. The disagreement among participants is most contentious in the consideration of a DPA centralized database which would immensely aid future research and policy advancements.

This chapter discusses the challenges and opportunities that exist in the realm of management and business education. The author provides an in-depth analysis of the history and development of management education, highlighting the changes and evolution that have occurred over time. Furthermore, the author discusses the dominant paradigm that has shaped management education and the issues that have arisen as a result. Specifically, the author identifies the problems that have contributed to financial crises and business failures, demonstrating the inadequacies of the current approach. Finally, the author argues for the need to revolutionize the current management education system. This involves a significant departure from the traditional methods of teaching and learning, and instead emphasizes the development of critical thinking skills, problem-solving abilities and adaptability in a rapidly changing business landscape. This chapter challenges the current state of management education and offers a compelling call to action for reform. By addressing the issues that have plagued the field and proposing innovative solutions, the author aims to pave the way for a more responsible management education system.

This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.

This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.

The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.

This study outlines directions for future accounting research on fraud.

The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.

This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.

This study aims to analyze corporate mail and wire fraud penalties, using bounded rationality in decision-making and assessing internal and external influences on prosecutorial choices.

The study analyzed 467 cases from 1992 to 2019, using data from the Corporate Prosecution Registry of the University of Virginia School of Law and Duke University School of Law. It examined corporations facing mail and wire fraud charges and other fraud crimes. Multiple regression linked predictor variables to the dependent variable, total payment.

The study found that corporate penalties tend to be lower for financial institutions or corporations in countries with US free trade agreements. Conversely, penalties are higher when the company is a U.S. public company or filed in districts with more pending criminal cases.

This study’s originality lies in applying the bounded rationality model to assess corporate prosecutorial decisions, unveiling external factors’ influence on corporate penalties.

By reviewing the literature, this paper explores the current priorities and future directions of alliance post-formation dynamics research.

This paper collects and analyzes empirical studies on alliance post-formation dynamics that were published between 1990 and 2021.

Current research on alliance post-formation dynamics can be structured as antecedents and outcomes of dynamics and their moderating effects. Among these topics, antecedents of dynamics have been addressed in a large body of research encompassing diverse theoretical mechanisms and levels of analysis. However, there remain debates regarding the outcomes of alliances post-formation dynamics.

First, this paper enriches the theoretical plurality of the field by integrating the antecedents and outcomes of dynamics and their moderating effects. Second, this paper proposes a new scholarly perspective – “alliance dynamic capabilities” – to address the “disruption vs adaption” debates regarding the outcomes of alliance post-formation dynamics in current research. Third, this paper presents several promising future research directions with the aim to advancing the literature on alliance post-formation dynamics.

Research on gender and finance finds that women chief executive officers (CEOs) are relatively risk-averse and more ethical than their male counterparts. These differences are often presented as reasons for lower earnings management by firms led by women. A strand of contrasting literature however finds the notions of women being risk-averse and ethical not necessarily true for women occupying top leadership positions as women successful in shattering the glass ceiling adopt behaviors like men. This study attempts to understand the differences between the ethical tendencies of the two genders by examining if CEO power impacts the relation between CEO gender and earnings management.

The authors begin the analysis using standard regressions using the propensity score matched (PSM) samples and examine if CEO power mediates or amplifies relationship between CEO gender and earnings management. The authors use ordinary least squares (OLS) regression approach and instrumental variables (IV) estimation to address the endogeneity concerns.

This study’s results suggest that the relationship between CEO gender and earnings management is mediated by CEO power. The authors find that women CEOs with lower power engage in lower earnings management. However, women CEOs with more power tend to engage in greater levels of earnings management than their male counterparts.

This study contributes the finance literature by showing women leaders successful in occupying top leadership positions are not necessarily more risk averse and more ethical. Less powerful women CEOs are subjected to potentially higher levels of scrutiny and are forced into an environment where they have to be seen as ethical. However, powerful women face the same concerns as their male counterparts and not necessarily more ethical.

Scandal is the disruptive publicity of alleged misconduct and it is important for organizations because of its severe consequences. Distinguishing between single-actor scandals, i.e., scandals that result from publicity of misconduct by a single actor, and multiple-actor scandals, i.e., scandals that result from publicity of misconduct of a similar type by multiple actors, we develop a framework for studying scandal dynamics that draws a distinction between how scandals start (single-actor or multiple-actor) and how they end (single-actor or multiple-actor). We focus specifically on spillover scandals (from single to multiple actors) and scapegoating scandals (from multiple to single actors) and identify several mechanisms that affect the likelihood of these two important types of scandals. We conclude by developing a research agenda that builds upon the central contribution of our framework: the distinction between single- and multiple-organization scandals and the transitions that result in spillovers and scapegoating.