Human Disposition and the Fraud Cycle

Human Disposition and the Fraud Cycle

Vasant Raval (Department of Accounting, College of Business Administration, Creighton University, Omaha, NE, USA)
Copyright: © 2013 |Pages: 16
DOI: 10.4018/ijabe.2013010101
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Abstract

Using primarily Eastern metaphysical concepts as a guide, this study presents a theory for an interpretation of the role of human disposition in fraudulent financial reporting. The theory proposed has two major components, the TRS (Tamsik-Rajsik-Sattvik) framework and the LAG (Lust-Anger-Greed) cycle. The TRS framework includes the constituent elements of a person and the resulting dominant behavioral tendencies of the person. The LAG cycle suggests how these tendencies operate in an act of fraud. The theory is thus potentially useful in the explanation of fraud as a human act. Moreover, in a predictive manner, it also has the potential to differentiate actors (of fraud) from non-actors. The study provides a series of propositions for future research.
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Disposition And The Trs Framework

The statement, “Glass is brittle,” describes the dispositional property of glass. To possess a dispositional property is not to be in a particular state (e.g., glass is shivered), but rather that if it ever is, or ever had been, struck it would fly, or have flown into fragments. The fragmentation is an occurrence or episode, while the brittleness is a disposition. The actualization of a disposition can take a single track, as in the case of a fragmented glass, or a wide and unlimited variety, especially as it relates to human disposition. When we go beyond a person’s performance of an act, we are considering his abilities and propensities of which this performance was an actualization. In comprehending disposition, our inquiry is into capacities, skills, habits, liabilities, bents, and proneness; we are considering the powers and propensities of which their actions are exercises (Ryle, 1949). According to Ryle (1949, p. 124), dispositional statements about particular things or persons . . . apply to, or are satisfied by, the actions, reactions and states of the object; they are inference tickets, which license us to predict, retrodict, explain and modify these actions, reactions, and states. To articulate disposition for this study, we have chosen the TRS framework.

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