No rose without a thorn: Corporate teamwork culture and financial statement misconduct

Chenyong Liu, David Ryan, Guoyu Lin and Chunhao Xu

Journal of Behavioral and Experimental Finance, 2023, vol. 37, issue C

Abstract: This study investigates the dark side of corporate teamwork culture on firms’ financial reporting behaviors. We used a novel corporate culture measurement developed by machine learning approach (Li et al., 2021), and calculated Benford Score (Amiram et al., 2015) as the proxy for financial misconduct in firms’ annual financial statements from 2003 to 2021. We find a positive association between a company’s emphasis on teamwork culture and financial statement misconduct; this association is more pronounced when a firm reports no internal control weakness. Additional analyses show that firms with stronger teamwork cultures are more likely to engage in financial statement misconduct when they use a Big 4 accounting firm as an auditor, or they are smaller in size. This research contributes to the collusive fraud literature by identifying a mechanism by which accounting personnel might be complicit and/or participate in financial statement misconduct or fraud. Our findings may be of interest to those tasked with corporate governance in identifying and preventing financial statement fraud.

Keywords: Teamwork culture; Financial statement misconduct; Corporate governance; Fraud prevention (search for similar items in EconPapers)
JEL-codes: G32 G41 M42 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214635022001083

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:37:y:2023:i:c:s2214635022001083

DOI: 10.1016/j.jbef.2022.100786

Access Statistics for this article

Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber

More articles in Journal of Behavioral and Experimental Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().