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Although fraud is widespread, little remains known about the specific psychological characteristics of fraudsters that can be used in prevention or treatment. The purpose of this paper is therefore to examine the socio-emotional competencies and moral judgement abilities of convicted fraudsters in comparison with other groups of offenders.

The investigation included imprisoned face-to-face fraudsters (n=11), imprisoned violent offenders (n=10) and non-offenders who had completed the Emotional Competence Questionnaire and the Sociomoral Reflection Measure.

Fraudsters displayed a significantly higher capacity to recognise emotions in others compared with the other two groups. In addition, there were no differences in socio-emotional skills between the groups. In terms of moral judgement ability, fraudsters and non-offenders demonstrated a level of a mature moral judgement. The moral judgement abilities of the violent offenders were significantly lower.

Therapeutic work with fraudsters should focus on the awareness and sense of responsibility for fellow human beings having regard to their specific self-image and justification schemes. For prevention, an adoption of a structural orientation of work processes, that is, geared more towards teamwork is recommended. Moreover, a positive impact of unethical management on the risk of fraud offenses is pointed out.

This paper follows an innovative methodological approach by examining the socio-emotional competencies and moral judgement abilities of convicted fraudsters and has implications for risk management both therapeutically and organisationally.

The social interaction between a deceiver and the deceived opponent is a determining factor for deception that involves emotions. Hence, besides a great amount of cognitive control, a successful lie also requires the regulation of emotions, especially when deceiving somebody face-to-face. The purpose of this paper is to investigate emotion regulation processes in an interpersonal lying experiment and aimed to examine whether fraudsters have well-functioning emotion regulation strategies or show a lack of emotional processes when deceiving face-to-face.

Imprisoned fraudsters (n=11), imprisoned violent offenders (n=10) and non-offenders (n=11) spontaneously deceived an interrogator in a face-to-face situation while the deceivers’ EEG was recorded.

The results showed that a decrease of alpha activity in left dorsolateral prefrontal cortex (dlPFC) predicted a higher frequency of deceptive responses as well as less guilt about deceiving the interrogator. These findings suggest a pivotal role of the left dlPFC in emotion regulation during deception for fraudsters, violent offenders and non-offenders. Unlike violent offenders, fraudsters did not show differences in alpha activity of the dlPFC between truthful and deceptive responses, suggesting that fraudsters are better at emotion regulation while deceiving their opponents.

This study emphasizes the recruitment of emotion regulation processes during deception. The results give first insight into the emotional processes underlying deception in fraudsters.

This study aims to enlist the red flag behaviors exhibited in financial services frauds.

A pluralistic mixed methodology was adopted in this study. Data collected via semi-structured interviews were coded, quantified and subjected to descriptive analysis to identify the most frequently exhibited red flag behaviors in financial services frauds. The relative risk of exhibition of the identified red flag behaviors was assessed by intuitively comparing the red flag behaviors identified in financial services frauds (experimental group, n = 24) with the red flag behaviors identified in a heterogeneous control sample of non-financial services frauds (control group, n = 28).

This study identifies six red flag behaviors likely to be more frequently exhibited in financial services frauds than in non-financial services frauds.

Results of this study can be used to develop a typical behavioral profile of a financial services fraud perpetrator. Active communication of this profile in fraud awareness training can help make fraud conspicuous in the financial services industry.

This study is unique because human behavior as a possible fraud indicator is an under-researched area. Further, this study examines first level of evidence and attempts an ex-post analysis of actual red flag behaviors exhibited in acknowledged fraud cases in which the perpetrator/perpetrators has/have been clearly identified.

This study aims to attempt a gender-based ex post examination of behavioral red flags of fraud exhibited by fraud perpetrators.

Qualitative data collected from semi-structured interviews were triangulated, quantified and subjected to statistical analysis to calculate the relative risk of exhibition of a behavioral red flag of fraud by a male/female fraud perpetrator.

This study reports the percentage of fraud cases in which male and female fraud perpetrators display particular behavioral red flags. The study also enlists the behavioral red flags likely to be more frequently exhibited by female fraud perpetrators relative to male fraud perpetrators and vice-versa.

Use of the results of this study in anti-fraud training is likely to make organizational fraud more susceptible to observation.

This study is unique because it is one of the very few studies that examine employee behavior as a potential fraud signal, establish gender distinction in behavioral red flags of fraud, and assess this phenomenon in a country other than a Western country.

This paper aims to discuss the prevention of complacency regarding payment card fraud, particularly the debit card.

Based on research already carried out on payment card fraud in France, Spain and the UK, the paper extends the analysis of fraud to the payment with respect to cards in use in Australia.

It was found that payment card fraud, particularly on MasterCard and Visa branded debit cards, is often hidden amongst the statistics for overall payment card fraud and yet, with the enhanced functionality of such cards, re: online and international transactions, added to the increasing sophistication of the card fraudsters, there is a present and ever increasing risk of debit card fraud.

Whilst payment card fraud is often dealt with under credit cards, there has been no prior work on debit card fraud.

The purpose of this paper is to examine the appropriateness and effectiveness of using the right of private action against perpetrators of market manipulation.

The author examines legislation in the USA, which gives victims the right to pursue private legal action against market manipulators, and discusses the eligibility criteria that plaintiffs have to meet before they are allowed to pursue private proceedings.

In spite of the importance placed on private claims by courts, regulators and legal firms in the USA, research has shown that relying on this type of redress alone, is fraught with difficulties as it may not be appropriate in a modern day economic climate, because the doctrines of the law of tort, such as reliance and causation, are ill‐suited to the impersonal nature of financial market trading. Common law tort has placed obstacles in the way of effective private civil action, making it inconvenient for those wishing to pursue this route to do so.

The study concludes that private action can work as a secondary or tool against market manipulation, but it cannot replace or reduce the power of public enforcement.

The study examines in detail the experience of the USA in using private action as a remedy against perpetrators of market manipulation. It discusses the eligibility criteria that plaintiffs have to meet before they are allowed to pursue private proceedings. It addresses the question of whether other countries such as the UK should use private enforcement against market manipulation.

This paper aims to examine the “effectiveness” of the Cyprus police in investigating credit card fraud.

In total, 19 semi‐structured interviews with key criminal justice personnel were undertaken to assess the current capacity of police in investigating credit card fraud.

The paper discovers that a far more co‐ordinated approach is needed to tackle credit card fraud in Cyprus, with a lack of specialised knowledge of fraud a major concern.

All interview schedules were sent before the interviews took place and three of the respondents provided written responses only.

This is the first study of its kind that involved primary research interviewing 19 key personnel involved in policing credit card fraud in Cyprus.

Legally speaking, there is no such ‘thing’ as the Internet.

This paper’s objective is to provide a systematic literature review of the contextual factors affecting downward communication from supervisors to subordinates in the audit environment. In addition, this review identifies emerging research themes and directions for future research.

I accomplish this review’s objectives by leveraging communication literature to establish a framework to identify and synthesize contextual factors affecting downward communication in the audit environment. The review identifies 50 published articles in the last 20 years from leading accounting and auditing journals.

This study consolidates research findings on downward communication under two primary contextual factors: (1) message and (2) channel. Findings indicate that empirical research examining communication in audit is fragmented and limited. Studies examining the message focus heavily on its content and treatment in the areas of feedback, nonverbal cues, and fraud brainstorming, and a handful of additional studies examine the effectiveness of the channel in these areas. Additional research is needed to understand a broader set of supervisor–subordinate communication practices, including those that are computer-mediated, and their effect on subordinate auditors’ judgments and behaviors in the contemporary audit environment.

Much of the audit literature examining communication to date is topic-versus construct-based, making it difficult to see how the research findings relate to one another. This review is the first to synthesize the literature to provide academics recommendations for a way forward, and inform practitioners of communication practices whereby supervisors can be trained to improve audit quality.

The purpose of this paper is to explore the role of manager responsiveness and social presence in the decision to engage in fraudulent expense reporting. While research has focussed on the direct effect of information technology (IT) on user behaviors, there is a lack of research investigating possible mediating factors of this relationship. As such, the paper examines the impact of affect and its effect on users’ behavior when using ITs.

The authors conduct an experiment to investigate possible behavior differences due to affect formulated in the early phase of pre-travel approval and the use of IT in the expense reporting phase. Consistent with social presence theory, the experiment participants engage in the pre-travel approval and expense reporting phases using either face-to-face communication (high-social presence) or web-based communication (low-social presence). The authors manipulate conditions in which affect is formulated by varying the manager's responses to the pre-travel approval request between positive and negative. All participants in the experiment then file an expense report.

The authors find that negative managerial support for employees’ pre-travel requests and the resulting negative employee affect have a significant impact on expense reporting behavior. Social presence during the pre-travel approval and expense reporting phases itself is not a sufficient factor to explain variations in final expense reporting behavior. However, when considering manager responsiveness, employee affect, and social presence together, the authors find that social presence is not an isolated factor. If an employee forms negative feelings, a low-social presence as observed in web-based communication leads to more undesired expense reporting behavior.

Results of this study contribute both to research and practice. This research is the first to investigate expense reporting fraud in a controlled experiment to isolate possible causes of the behavior using an experiment methodology. In addition, the paper investigates two very important factors identified in the prior literature as critical factors explaining the effect of using ITs on actual behaviors: manager responsiveness and social presence.

As companies seek help from ITs to process and manage expense reports in order to curb ever-rising operating costs, an important but unapparent assumption is consistently overlooked: do people act the same way when facing the less-human IT as when facing a real person? This study contributes to the literature by investigating this issue from two perspectives, the psychological factor due to manager responsiveness and the effect of social presence by using less-human IT to complete the expense report process.

Recent economic situations have put pressure on organizations to cut costs by implementing new technologies to streamline expense reporting processes. At the same time, deterring fraudulent behavior is also a top priority in many organizations. This study provides evidence that psychological factors cannot be overlooked when information systems are used to improve business processes and prevent fraud.