UNIVERSITY OF GRONINGEN
Why Executives engage in Fraud: A
Review and Classification of
Executives’ Fraud Incentives
Fulco Hattink s2495856
6/6/2016
Master Thesis
MSc. Organizational and Management Control Faculty of Economics and Business
University of Groningen F.E.hattink@student.rug.nl
Supervisor: dr. S. Girdhar Words: 11.892
2 Abstract
Occupational fraud by executives continues to be a significant problem for organizations around the world. Fraud by executives is especially problematic because it causes losses that are four times higher than fraud by managers and approximately seven times higher than fraud by employees. In addition, it is regularly only detected after two years. Despite these losses there still is some ambiguity about the incentives for executives to engage in occupational fraud because existing literature provides different answers. Therefore, this paper aims to review existing literature concerning why executives engage in occupational fraud. To group literature in a coherent way the classification framework developed by Shields (1997) was used. The
findings indicate that the main incentive for executives to engage in occupational fraud is an increase in compensation. However, there are some other factors that enhance the likelihood of executives engaging in occupational fraud. Executives which have connections with other board members as well as nonprofessional connections are more likely to engage in occupational fraud. Furthermore, executives which have narcissistic personality traits find it easier to
rationalize fraud. Lastly, the pressure for good financial results and new capital are an important catalyst for occupational fraud by executives. A first theoretical contribution is that this is the first paper which reviews papers with regard to the incentives executives have to engage in
occupational fraud. Moreover, by understanding the incentives, and distinguishing between the different types of incentives, this review contributes to potential detection or prevention
mechanisms.
3 Introduction
Since the beginning of commerce, people have committed fraud (Dorminey et al., 2012). Fraud has been around for many years and still causes significant problems for organizations around the world (Verschoor, 2014; Wolfe & Hermanson, 2004; Hargrove & Raiborn, 2013). For example, the Association of Certified Fraud Examiners (ACFE) has calculated that fraud annually costs organizations 5% of their revenues. When applied to gross world product, this sums up to a total loss of $3.7 trillion (ACFE, 2014). A substantial percentage (19%) of fraud is committed by executives, with a striking median loss of $500.000 (AFCE, 2014). In fact,
executives’ fraud causes losses that are nearly four times higher than that of fraudulent managers, and approximately seven times higher than that of fraudulent employees (AFCE, 2014). The huge losses that are associated with executives’ fraud have spurred interest of both the economic sector and scientists in understanding and preventing executives’
occupational fraud (Chidambaran, Kedia & Prabhala, 2011; Uzun, Szewczyk & Varma, 2004; Khanna, Kim & Lu, 2015). Research on this subject shows that fraud by executives does not only lead to greater losses than that of people in other positions, it is also much harder to detect (Chidambaran, Kedia & Prabhala, 2011). On average, from commencement to detection, fraud lasts 12 months when committed by employees, 18 months when committed by managers, and 24 months when committed by executives (AFCE, 2014). The long detection period might be due to the connectedness of executives with other board members or their significant influence on the organization (Khanna, Kim & Lu, 2013). Other research shows that executives engage in occupational fraud trying to increase their total compensation package (Bergstresser &
Philippon, 2004; Erickson, Hanlon & Maydew, 2004; Johnson, Ryan & Tian, 2005;). In contrast, there are some findings which do not find a positive relationship between compensation package and the probability to commit fraud (Armstrong, Jagolinzer & Larcker, 2009; Dechow, Sloan & Sweeney, 1996). Despite these contradictions in the literature, the problem of occupational fraud by executives has never been systematically reviewed. Specifically, there has been no review which focuses on the incentives for executives to engage in occupational fraud. By answering the ‘why’ question it will be likely that it will be easier to advance prevention and detection mechanisms. Therefore, in the present literature review, I aim to give an overview of, and to summarize research findings concerning why executives engage in occupational fraud. This review will not only add to our knowledge of occupational fraud by executives, but it is also likely to stimulate new research on this subject. It is likely to accomplish, because it makes use of a framework that has never before been employed to review and summarize executives’
4 focus of the research field, establish to what extant research has progressed and can also uncover possible relations, contradictions, gaps and inconsistencies in the literature. Shields’ Framework can be used to structure papers according to their topics, settings, theories, research methods and results (Shields, 1997). It is likely that such a thorough structuring of the available literature will lead to more understanding about why executives engage in occupational fraud. In order to investigate the incentives of executives to engage in occupational fraud the following research question will be used.
Research Question
Why do executives engage in occupational fraud?
This review may have important practical and managerial implications, since it will give us more insight into executives’ incentives for committing fraud. This understanding of incentives is an important step which needs to be made to increase the chance of detection or prevention of fraud by executives. If we know why executives commit fraud, it will help in coming up with detection and prevention mechanisms (Khanna, Kim & Lu, 2015). If, for example, an executive is driven to fraud by money problems, this will probably require a different managerial approach than fraud that is committed because of incentives on the company level. The identification of the types of incentive (e.g. incentives on the personal level, incentives on the level of the company) that makes executives engage in fraud, represents one of the ways in which the present review can help to develop specific, well-tailored solutions to detect or prevent fraud.
It is important to know how fraud can be defined and which definition is used in this review. Lawrence & Wells (2004 p. 33) define fraud as “All multifarious means which human ingenuity
can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth. It includes all surprises, tricks, cunning or dissembling, and any unfair way which another is cheated”. However, as this definition is still
very broad, I chose to use a narrower definition that is specific to occupations, which aligns with our main interest in this review. Therefore, the definition of the Association of Certified Fraud Examiners (2014 p.6) will be used. They define occupational fraud as: The use of one’s
occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. This definition is used because, by its nature, this
5 Why is it important to study executives’ fraud?
In addition to the major financial losses that accompany executives’ occupational fraud, there are several other reasons why it is important to specifically focus on executives’ occupational fraud. First of all, Armstrong, Jagolinzer & Larcker (2009 p.37) see a challenge in this field of literature. They inquire directions for future research by pointing out that ‘at this point, we do not
know why executives engage in illegal and unethical behavior that can result in substantial legal and human-capital costs’. Even though they stressed this point in 2009, there still has been no
attempt to get a good review of this topic. Second, executives are the leader of the organization, and because of this, they influence the organization in various, substantial ways. Not only do they have explicit legal authority to contractually bind the organization (Khanna, Kim & Lu, 2013), but their personal leverage can also be connected with differences in organizational financial leverage (Cronqvist, Makhija & Yonker, 2012). In addition, executives strengthen their influence in the organization by being connected with other executives and have a seat in several boardrooms. This increases the possibility of committing frauds and decreases the possibility of detection (Khanna, Kim & Lu, 2013). Furthermore, executives’ behavioral personalities such as risk-aversion, and time preference are connected to organizational financial strategies and management compensation (Graham, Harvey & Puri, 2013). Besides that, they have a profound influence on ethics in the organization. Executives can be seen as the leader of the organization and have the responsibility to set up the right ethics (Hood, 2003). Ethics are so important for the long-term sustainability for the organization that they will increasingly form the foundation of serious leadership by executives (Fombrun & Foss, 2004). When the leader of the organization engages in occupational fraud this might lead to
unfavorable ethics at all levels. This has a negative effect on ethical performance which is linked with the level of profitability of the organization (Stanwick & Stanwick, 1998). When profitability is negatively affected by ethical performance this might endanger the long-term sustainability of the organization. It is for these reasons that it is important to know why executives engage in
occupational fraud. Conducting a systematic literature review may increase our understanding of the reasons why executives engage in occupational fraud.
The fraud triangle.
6
and the opportunity to violate a position of trust; and (3) the ability to adjust one’s self-perception such that violating this trust does not constitute, in his or her mind, criminal behavior” (Dorminey
et al., 2012 p. 3). Cressey (1953) found that each of the three criteria must be present to engage in occupational fraud. This knowledge eventually evolved into the fraud triangle, which is shown in figure 1.
Figure 1. The fraud triangle
The first corner of the triangle, ’the pressure or incentive’, gives the perpetrator a motive for the crime. For example, the
perpetrator has a pressure or incentive when he/she has financial difficulties, addiction problems or is living beyond his or her means. The second corner of the triangle represents the
opportunity to commit fraud. For example, if the perpetrator thinks that control is weak and that the chance of being caught is very small, the perpetrator will have a good opportunity for committing fraud. The third corner of the triangle represents the perpetrator’s attitude towards committing fraud. For example, the perpetrator might only be able to carry on with occupational fraud by focusing on the positive sides it has for them, and by downgrading the negative sides. The fraud triangle is an important concept because all sides are linked with an increased probability of committing fraud by executives (Choo & Tan, 2006). Therefore, this literature review will look at all sides of the triangle.
Organizing framework
In order to systematically review executives’ engagement in occupational fraud, data will be collected from two sources: Business Source Premier and Web of Science. To systematically asses the contribution of different scientists to of a given literature field, an analytical review scheme is essential (Ginsberg & Venkatraman, 1985). As was mentioned earlier, this literature review will use the classification framework of Shields (1997). Classification frameworks are similar to maps (Dewey, 1938), in that they can be viewed as problem-solving tools. When precise, maps enable steering within reality (Hickman, 1990). Classification frameworks
7 classifies papers using the following criteria: topics, settings, theories, research methods and results.
Settings
Settings refer to the industry or branch in which the research of the selected papers take place. Shields (1997) defines several different settings: single industry or activity; multiple industries or activities; government, not-for-profit, hospitals; generic (abstract/stylized/simplified);
international; inter-organizational and no setting. The setting ‘single industry or activity’ is split up in manufacturing; marketing and retailing; R&D; transportation and other.
According to van Helden (2005) countries can also be defined as settings and might be able to influence studies. For instance, studies can be influenced by the country in which research takes place because people display personality features that are greatly valued in a specific culture, or because of organizational laws that are implemented in a country. In addition, if results are always similar in some countries, but dissimilar in others, this might indicate an opportunity for future research by addressing these irregularities.
Topics
An important factor that can be used to select papers for a review is their relevance for
answering the research question. Therefore, in order to be included in this review, the main topic of a paper must contain some information about why executives engage in occupational fraud. In this literature review I will make a distinction between the incentives on personal level, company level and personal and company level. This will also be the three topics of classification.
Incentives on personal level are, for example, financial difficulties at home or increased salary because of occupational fraud. Incentives on company level are, for example, high pressure to get good financial results or a weak governance structure. Incentives on personal and company level is the topic when one paper addresses both topics. Using Shield’s classification framework, the topics can be linked to other classification criteria. These new ways in which available data can be connected enable the formation of new insights, which can consequently result in recommendations for future research.
Theories
8 operations management, and strategic management theories. If possible, I will use the same distinction as Shields (1997). When papers appear to not explicitly mention any theory then they will be defined as ‘no theory’.
Research methods
In order to classify papers by their research methods, Shields (1997) distinguished between analyses, survey, archival, laboratory experimentation, literature review, case/field study,
behavioral simulation and multiple research methods. Research methods represent an important classification criterion, because disproportionate use of certain methods and little use of others can point to the topics being studied in a narrow and incomplete manner. In turn, this information can lead to recommendations for future research, especially for studying subjects using specific research methods.
Results
Results are a very important part of the classification framework (Shields, 1997). They enable to make connections between different papers or constructs. When evaluating differences and similarities between the results of different papers, one can gain important new insights. These new insights may be used for recommendations to advance the field of study.
Data domain
In order to investigate why executives engage in occupational fraud two key sources were used: Business Source Premier and Web of Science. These sources are used because they contain a lot of peer reviewed journals and have unique characteristics which include citation counts, ‘view related records’ and a sophisticated search engine. In this review the following keywords will be used to search the databases: executive*, ceo*, fraud* occupation*, incenti*, why, enage* opportunit* and rationali*. A * means that the database will also search for all suffixes that could follow the stem of the word. These keywords represent the most important words in the research question and fraud triangle. They will be entered in all possible combinations to encertain finding enough and relevant data. When a relevant paper is found, I will use forward and backwards snowballing to find other relevant papers. Backwards snowballing refers to tracing the
9 because papers that are cited often represent important contributions to the literature (Saha et al., 2003). I will not use this criterion for papers that were published in 2013 or later, to account for the fact that recent papers have had less time to get cited than older papers. After conducting the search with these specific keywords there were 33 papers selected. The papers were
published between 1996 and 2015. Papers were included if they were able to answer the
research question. Appendix A shows an overview of the 33 selected papers. The papers in this overview are ordered sequentially by year of publication, starting with the oldest papers and moving to the most recent ones. This allows the reader to quickly see how thinking about the subject has evolved over time. Furthermore, differences between old and new papers can be examined in this way. Appendix B shows the reference list of the selected papers. This is not included in the normal reference list because now it allows the reader to quickly see which papers are discussed in the results section.
Results
All results were evaluated within the different classification criteria that were used in the
classification framework of Shields (1997). For each of these criteria, the frequency distribution of these topics will be discussed. In addition, it will be examined whether this knowledge can be used to answer the research question. Why do executives engage in occupational
fraud? Furthermore, it will be examined whether there are major similarities or differences within each criterion, allowing the formulation of integrated theories. In addition, it will be examined if there is a gap in the literature for each criterion.
Settings
The settings which will be discussed are countries and industries. Table 1 provides the
10 Table 2 shows the frequency distribution of the other setting used in the classification
framework: industries. This is the industry in which the research took place and where data was collected. It shows that 94% of the reviewed papers were investigating multiple industries or activities. This means that the research did not take place in one particular industry but included data of several different industries. The high percentage might have to do with the type of research method. Table 5 shows that 85% percentage of the papers were using archival data which included data about multiple companies in several industries. This might explain the high percentage of this type of industry. Only 1 paper investigated a specific type of industry and 1 paper didn’t mention any industry.
Table 1. Frequency Distribution of Countries
Country Frequency Percentage
USA 27 81 Korea 1 3 Netherlands 1 3 China 2 7 Nigeria 1 3 Canada 1 3 Total 33 100
Table 2. Frequency Distribution of Industries
Industry type Frequency Percentage
Multiple industries or activities 31 94
Single industry – Marketing and retailing 1 3
No setting 1 3
Total 33 100
I will now examine the related results of papers about why executives engage in occupational fraud with regard to settings.
11 larger compensation package they may also be more incentivized to engage in occupational fraud.
The classification of the papers using countries pointed out a gap in the literature. It was found that of all 33 papers, 29 papers (88%) focused on Western countries only. This suggest that there may be a lack of knowledge and literature about non-Western countries. This may have to do something with the fact that Western countries often provide the resources that are needed to carry out research. Importantly, the lack of papers focusing on non-Western countries can seriously bias the results of any literature review. As was mentioned earlier, countries can differ with regard to several characteristics, such as culture, norms, laws and wealth. Differences with regard to these characteristics may be especially pronounced between Western countries and non-Western countries. This means that the findings that were present in this literature review cannot be used to reach conclusions about why executives engage in occupational fraud in non-Western countries. In addition, because there are very few papers about non-Western countries, it is impossible to compare findings between these countries and Western countries.
At the start of the method section, I mentioned that I also wanted to further explore the topics within different types of industries (the second type of setting). However, only 2 papers were in another setting then ‘multiple industries or activities’. Therefore, very little can be said about the other types of industries. Most papers were in multiple industries which might have to do
something with the kind of research method. Archival data was used in 85% of the papers which explore why executives engage in occupational fraud. By using archival data authors included companies from several different industries. Therefore, it seems logical that ‘multiple industries or activities’ is by far the most used industry. The high percentage of this type of industry might indicate a gap in the literature. Because industries have different characteristics it might be possible that incentives for executives to engage in occupational fraud might be different in these industries. This topic warrants further research.
Topics
12 Table 3. Frequency Distribution of Topics
Topics Frequency Percentage
Incentives on company level 3 9
Incentives on personal level 24 73
Incentives on company and personal level 6 18
Total 33 100
I will now examine the related results of papers about why executives engage in occupational fraud with regard to topics.
Several papers yielded information on results with regard to the topic ‘incentives on company level’. A selected paper written by Choo & Tan, (2006) mentioned that the enormous importance of monetary success incorporated in the American dream is an important incentive to commit fraud for executives. In line with this, Otusanya, Lauwo & Ajubolade, (2013) finds that the emphasis on financial success for organizations leads to systematic pressure for executives. When executives need to accumulate capital and wealth this systematic pressure is a catalyst to engage in fraudulent practices. Choi, Kwak & Choe, (2014) examined CEO turnover and
earnings manipulation in Korea. Their findings indicate that leaving CEOs manipulate the earnings upward when they are forced to leave the company. Such manipulation is only
substantial when the leaving CEO is replaced by an internal candidate. When the replacing CEO is an external candidate and the shift is without problems then the new CEO also manipulates earnings upward. Therefore, the internal turnover system of the company might be an incentive for CEOs to engage in occupational fraud.
The next topic is ‘incentives on personal level’. This is by far the mostly discussed topic in the literature. Dechow, Sloan & Sweeney (1996) do not find systematic proof that executives engage in occupational fraud in order to sell their stock at exaggerated prices. Furthermore, Armstrong, Jagolinzer & Larcker (2009) investigate the positive association between equity incentives and accounting fraud. They do not find evidence for the positive association between equity incentives and accounting fraud. These findings indicate that there is no positive
13 compensation that is stock-based increases the probability of accounting fraud by almost 68%. Furthermore, Johnson, Ryan & Tian, (2005) stress that the possibility of fraud is positively linked to incentives from unrestricted stock holdings and is not linked to incentives from restricted stock and unvested and vested options. Executives at fraud firms sell more stock, obtain bigger total compensation and exercise larger portions of their vested options during the fraud years in comparison with control executives. Moreover, Burns & Kedia, (2005) investigate the sensitivity of CEOs option portfolio to stock prices with the probability of engaging in occupational fraud. They find that this sensitivity is positively associated to the probability to engage in occupational fraud. In comparison with other components of compensation, stock options are linked with stronger incentives to engage in occupational fraud because convexity in CEO compensation led by stock options limits the downside risk on detection. O’Connor et al. (2006) described that fraud was more frequent when the CEO was able to increase his amount of stock options but only when he was a board member and the other members were without stock options. In addition, they find that fraud was more frequent when the CEO was no board member and the other board members had stock options. In line with this, Burns & Kedia (2006) investigated if the possibility to exercise more options was an incentive for executives to engage in
occupational fraud. They also found that executives significantly exercise more options in fraudulent years in comparison with control firms. Likewise, Efendi, Srivastava & Swanson (2007) find that the companies of CEOs who have large amount of stock options ‘in the money’, are likely to have misstated financial statements. These financial misstatements also happen more frequently when the CEO also serves as a board member. In addition, Zhang et al. (2008) find that ‘out the money’ stock options from CEOs are also an incentive for CEOs to engage in occupational fraud. According to prospect theory, this incentive arises from minimizing losses by taking fraudulent action. The perpetrator rather engages in occupational fraud then take a loss. Moreover, Laux & Laux (2009) show that an increase in pay-performance sensitivity gives a direct incentive for executives to engage in occupational fraud. They also show that by an increased pay-performance sensitivity the audit committee assiduously oversee the accounting process. This reduces the opportunity for CEOs to commit fraud. Warren et al. (2010) show a positive relation between corporate earnings fraud and stock option compensation for CEOs. They also investigate the connectedness between cash salaries and bonuses and corporate earnings fraud. Their findings indicate that cash salaries and bonuses are only indirectly
14 Milbourn (2014) discover that fraud is more likely in companies where auditor expertise is low when CEO have equity based incentives. When auditor expertise is high, companies grant bigger equity based incentives to their CEOs because auditor expertise lowers these costs. Lastly, Biggerstaff, Cicero & Puckett (2015) illustrate that CEOs who are able to benefit from backdating stock options are more likely to engage in occupational fraud. Even though two papers do not find evidence of increasing compensation through act fraudulent with stock
options there are 12 papers who do find evidence for this relationship. Therefore, one conclusion of this analyses is that increasing compensation by committing fraud is an important incentive for executives to engage in occupational fraud.
When investigating the rest of the papers with the topic ‘incentives on personal level’ there is an indication that CEO connectedness might also be an important incentive for
executives to engage in occupational fraud. For instance, Chidambara, Kedia & Prabhala (2010) find that CEO-board connectedness is significant related to the probability of committing fraud by CEOs. Specifically, nonprofessional connectedness, like shared education, increases the
probability of committing fraud. In addition, Khanna, Kim & Lu (2013) demonstrate that appointment-based CEO connectedness is positively linked to the probability of fraud and negatively linked to the probability of detection. Appointment-based CEOs are able to postpone detection, lower the probability of CEO dismissal after fraud detection and reducing coordination costs of committing fraud.
CEO characteristics, like narcissism, might also be an important incentive to engage in occupational fraud. Schrand, & Zechman (2011) show that fraud firms are led by executives exhibiting narcissism whereas non fraud firms have executives who do not have this behavioral trait. In addition, Rijsenbilt & Commandeu (2012) confirm the likely effect of credible proxies for CEO narcissism on fraud by showing a positive relationship. This indicates that CEO narcissism is a potential cause of fraud. Moreover, Cormier, Lapointe-Antunes & Magnan (2015) find that features of strong CEO authority and hubris as reflected in their dealings with others, the self and the world are more likely to engage in occupational fraud. Likewise, Chen et al. (2013) show that executives with a low level of managerial integrity are more likely to engage in occupational fraud then executives with high level of integrity.
Other papers indicate an incentive to engage in occupational fraud by the range of opportunities executives get without being caught (Albrecht, Albrecht & Albrecht, 2004), their conception of God (Graafland et al., 2007) and the amount of ownership of the company (Sen, 2007).
15 of the two previous topics. Therefore, this topic might have some similar results. For instance, Anderson & Tirrel (2004) have done several case studies to investigate the incentives of CEOs to engage in occupational fraud. They found that ‘over identification with the business, ego,
family pressure, growth strategies and survival concerns’ are an important incentive for CEOs to
engage in occupational fraud (Anderson & Tirrel 2004 p.35). Moreover, Zahra, Priem & Rasheed (2005) used archival data to examine fraud by senior executives by using the fields of
psychology, sociology, economics and criminology. They found antecedents on different levels which are: societal-level, industry-level and firm-level. The antecedents found on societal-level are differential association and aspirations. The antecedents found on industry-level are culture, norms, histories, investment horizons, concentration, hostility, dynamism and heterogeneity. The antecedents on firm-level are board composition, leadership and organizational culture.
Furthermore, Harris & Bromiley (2007) find evidence that executive incentive compensation and poor firm performance is an important incentive for executives to engage in occupational fraud. Chen (2010) shows that a combination of increased shareholder expectations and a narcissistic CEO increases cycles of earnings fraud. At last, Ndofor, Wesley & Priem (2013) contribute by examining that information asymmetries between industry and firm level complexities increases the probability of financial fraud. In addition, more CEO stock options increase the probability of fraud when industry complexity is high. Table 4 provides a categorization of the results per topic.
The majority of the papers (75%) focused on incentives on personal level. This might indicate a gap in the literature because, as mentioned before, incentives on personal level might need another managerial approach to prevent fraud then incentives on company level. When incentives on company level are less well understood than incentives on personal level then the prevention mechanisms might be underdeveloped. Future research should focus on giving a comprehensive picture of the incentives on company level.
Table 4. Categorization of the results per topic
Topic Incentive
Incentives on company level
Enormous importance of monetary success Accumulate new capital and wealth
16
Incentives on personal level
Equity incentives like stock options
Board connectedness and nonprofessional connections
Personality traits like narcissism, hubris and managerial integrity
High range of opportunities without being caught
The conception of God
The amount of ownership of the company
Incentives on company and personal level
Over identification with the business, ego, family pressure, growth strategies and survival concerns
Increased shareholder expectation and narcissistic executive
Differential association, aspirations, culture, norms, histories, investment horizons, concentration, hostility, dynamism, heterogeneity, board composition, leadership and organizational culture.
Theories
Table 5 provides the frequency distribution of the theories. 57% of the selected papers did not explicitly refer to a theory. Organizational and economic theories were both mentioned 1 time (so in 3% of the papers) whereas sociological theories were used in 7% of the selected papers. Psychological theories were used in 30% of the papers. This may have to do something with the fact that most papers addressing the complexity of human behavior. Therefore, psychological theories might be the most suitable to address why executives engage in occupational fraud.
Table 5. Frequency Distribution of Theories
Theory Frequency Percentage
17 I will now examine the related results of papers about why executives engage in occupational fraud with regard to theories.
To begin with, more than half of the reviewed papers (56%) did not explicitly refer to a theory. This high percentage can identify a gap in the literature. It is important to use theory because it can be problem solving and might make it easier for the reader to make a connection with other papers and the real world. It can also help to make a good framework for a study, thus
prohibiting authors from endlessly expanding their literature reviews without choosing a focus, and it can help define recommendations for future research. In contrast, authors who are not explicitly mention a theory are more fruitful for the development of the field. They derive their own idea or hypotheses from previous research and may be able to understand phenomena better because they do not use a theory which is already present. Therefore, not explicitly mentioning any theory can have his flaws but also his benefits.
The papers which do refer to a theory will be discussed now. First, the theory which is classified as ‘organizational’ is used by Chen (2010). He uses institutional theory to investigate the role of ethical leadership in major financial accounting scandals. He included various explicit and implicit institutional constraints on the behavior of the CEO: ‘formal legalistic controls,
whistleblowing by subordinates, social constraints on the CEOs behavior and social norms for shareholders’ behavior’ (Chen, 2010 p. 44). By using this theory, he contributes to the
understanding of incentives to engage in occupational fraud by executives. The results indicate that a combination of increased shareholder expectations and a narcissistic CEO increases cycles of earnings fraud.
Second, the theory which is classified as ‘economic is used by Johnson et al. (2005). They use economic theory of crime framework introduced by Becker (1968). They use the theory to contribute to understanding the incentives for executives to engage in occupational fraud. The authors find that executives with greater financial incentives are also more likely to engage in occupational fraud.
18 between him and the principal. Therefore, the behavior of the agent is central and the theory is called ‘broken trust’ theory. The behavior of the agent is also central in papers which use agency theory as their main theory to describe why executives engage in occupational fraud. There are six papers which use agency theory. All these papers find in some degree that increased stock ownership by CEOs are an incentive to engage in occupational fraud. In addition, upper
echelons theory is used by Troy et al. (2011) and Biggerstaf et al. (2015). This theoryargues
‘that an individual’s values, preferences, interpretation and action will be affected by his or her demographic characteristics’ (Troy et al., 2011 p.3). In these papers the theory is developed
from cognitive psychology and looks at rationalization of fraud (one of the sides of the fraud triangle). Both their results also indicate that CEO stock options are an important promoter for fraud. Furthermore, behavioral theory of the firm is used by Harris & Bromiley (2007) to
investigate if incentive compensation and poor firm performance are an inspiration of conducting fraud by executives. Their results show empirically that this argument holds.
At last, the papers which use ‘sociological’ theories will be discussed. Theories are ‘sociological’ when they are derived from sociology literature and investigate how societies ‘see’ the world. The “American Dream” theory is used by Choo & Tan (2006) and Otusanya et al. (2013). Their related results indicate that the great emphasis on monetary success are an important factor which stimulates fraud. Less important is using socially acceptable means to achieving such success.
Research methods
Table 6 provides the frequency distribution of research methods. Archival research is by far the most used research method (85%). This might have something to do with the fact that it is hard to study fraud ex ante. Chen (2010 p.38) describes in his methodology section that: ‘a key
methodological problem in investigating financial misreporting and many other forms of socially undesirable behavior is the difficulty of obtaining reliable data’. Therefore, it seems logical that
19 Table 6. Frequency Distribution of Research methods
Research methods Frequency Percentage
Case study 2 6
Archival research 28 85
Analyses 3 9
Total 33 100
I will now examine the related results of papers about why executives engage in occupational fraud with regard to research methods.
Table 7 provides the frequency distribution of topics linked with research methods. This helps to identify which topic made frequently use of what specific research method. It might also help to indicate gaps in the literature and find a structure.
When comparing the different topics and research methods with each other some differences can be seen. Archival research is the only used research method with regard to the topic ‘incentives on company level’. This might indicate that it is hard to study the effects of company characteristics on the incentives of executives to engage in occupational fraud with another research method. It can be fruitful to investigate this topic with other research methods then previous research has done. For instance, by conducting research in a company without them knowing fraud is the topic of research. When conducting research in this way, the researchers should be aware of the ethical consequences. With regard to the topic ‘incentives on personal level’ most of the studies used archival research. Only Graafland et al. (2007) managed to do a case study. They investigated how the conception of God was linked with the ability to rationalize occupational fraud and therefore might be an incentive for executives to engage in occupational fraud. Their findings indicate that executives with a monotheistic
20 case study, 1 analyses and 4 studies which use archival research. As mentioned before, the case study by Anderson & Tirrel (2004) indicate multiple incentives to engage in occupational fraud such as, over identification with the business, ego, family pressure, growth strategies and survival concerns. The analyses by Chen (2010) showed that a combination of increased shareholder expectations and a narcissistic CEO increases cycles of earnings fraud. These results are all slightly different which might indicate that using different research methods is fruitful in order to understand why executives engage in occupational fraud. To get a more comprehensive picture future research should focus on using more types of research methods then only archival. As mentioned before, a case study where the people in the company do not know that fraud is the topic of research might be fruitful. In addition, there might be some research topics with regard to fraud possible by using some survey data to make generalization easier.
Conclusion
In this literature review I wanted to make clear why executives engage in occupational fraud. Therefore, I analyzed 33 papers with potential incentives for executives to engage in
occupational fraud and classified them according to the classification framework of Shields (1997). Overall, the findings of the literature showed that executives’ main incentive to engage in occupational fraud was them receiving more compensation, although some papers did not find an association between occupational fraud and the compensation package of the executive. This inconsistency might be an effect of the assumptions made in research design choices. However, there were additional reasons for executives to engage in occupational fraud. Analyzing the papers using Shield’s framework revealed three main types of incentives for executives to engage in occupational fraud: 1) incentives on company level, 2) incentives on personal level, and 3) incentives on company and personal level. The three types of incentives are discussed in more detail below.
With regard to the topic ‘incentives on company level’ the findings indicate several incentives. First, the enormous importance of monetary success is an important incentive for executives to engage in occupational fraud. When executives are under high pressure to get
Table 7. Frequency Distribution of Topics linked with Research Methods
Case study Archival research Analyses
Incentives on company level 3
Incentives on personal level 1 21 2
Incentives on company and personal level 1 4 1
21 good financial results, they find it easier to rationalize occupational fraud. Second, when
executives need to accumulate new capital they are more likely to engage in occupational fraud. By acting fraudulent, executives are able to show more positive financial reports (in the short-term) which makes it easier for them to accumulate new capital. Third, the internal turnover system of the company is an incentive for executives to engage in occupational fraud. When CEOs are forced to leave the company and are replaced by an internal candidate they substantially manipulate earnings upward.
Furthermore, with regard to the topic ‘incentives on personal level’ there are several conclusions which can be made. First, executives who engage in occupational fraud are likely to do this because they want to increase their compensation package. With 12 papers that
describe ‘increasing their compensation package’ as the main reason why executive engage in occupational fraud, this incentive is clearly the one that is most often studied. By being the main reason of so many papers, this probably is the primary reason for executives to engage in occupational fraud. Second, the connections the executive has with other board members as well as nonprofessional connections are an important catalyst for occupational fraud. By being better connected, the fraudulent executives are better able to decrease the probability of detection. Third, executives which show narcissistic personality traits are more likely to engage in occupational fraud. A narcissistic executive has a very strong sense of the self and exudes self-confidence. To protect themselves against criticism, a narcissist does not pay much attention to the opinions or feelings of others and has often an underdeveloped empathy. Therefore, it is easier for narcissistic executives to rationalize occupational fraud and this increases the probability of fraud. Furthermore, several papers mentioned other incentives like: the conception of God, the amount of ownership of the company and the range of opportunities executives have to engage in occupational fraud.
The third and final topic is ‘incentives on company and personal level’. Because this is a combination of the two previous topics the main conclusions are the somewhat the same. The findings of these papers indicate that executives have incentives to engage in occupational fraud because of their incentive compensation, poor firm performance, narcissism and increased shareholder expectations. In addition, the findings indicate when industry complexity is high and the executive has more stock options, then the probability of fraud is higher.
22 other detection or prevention mechanisms. For instance, incentives on company level can be detected or prevented by a better governance structure in the company. Incentives on personal level can be detected or prevented by learning the personality traits of the executive or by using a pay-performance measure with low distortion. This review provides a better understanding of the incentives for executives to engage in occupational fraud which is an important implication that can help advance detection or prevention mechanisms.
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26 Appendix A*
Overview relevant papers
Authors Publi-cation Date
Setting Country Topic(s) Theory Research Method(s) Results Dechow, P.M.; Sloan, R.G. & Sweeney, A.P. 1996 Multiple industries or activities USA Incentives on personal level
No theory Archival They do not find systematic evidence that executives are committing fraud in order to sell their stockholdings at inflated prices. In addition, they find that poor oversight of
management through weak governance structures is an important catalyst for fraud.
Bergstresser, D. & Philippon, T. 2004 Multiple industries or activities USA Incentives on personal level
No theory Archival This paper finds evidence that more ‘incentivized’ CEOs – those whose overall compensation is more sensitive to company share prices—lead companies with higher levels of occupational fraud. Thus executives get incentives to engage in occupational fraud because of their compensation
package. Albrecht, W.S.; Albrecht, C.C. & Albrecht, C.O. 2004 Multiple industries or activities USA Incentives on personal level
Psychological Archival According to the stewardship theory, the pressure to commit fraud is high because of the range of opportunities executives get to commit fraud without being caught. The agency theory assumes that the pressure to commit fraud is high because the executives have high ability to rationalize deceitful acts. Erickson, M.; Hanlon, M. & Maydew, E. 2004 Multiple industries or activities USA Incentives on personal level
No theory Archival The probability of accounting fraud is increasing in the percent of total executive compensation that is stock-based. A one standard deviation increase in the proportion of
compensation that is stock-based increases the probability of an accounting fraud by approximately 68%.
Anderson, J.R. & Tirrel, M.E.
2004 Multiple industries or activities USA Incentives on company and personal level No theory Case studies
Corporate chief executive officers (CEOs) have a number of personal and professional motivations to influence the financial results reported by their organizations. Through a series of short case studies, this article explores a sampling of these motivations, including overidentification with the business, ego, family pressures, growth strategies, and survival concerns. Zahra, S.; Priem, R & Rasheed, A 2005 Multiple industries or activities USA Incentives on company and personal level
27 Industry-level antecedents are culture, norms, histories, investment horizons, concentration, hostility, dynamism and heterogeneity. Firm-level antecedents are board composition, leadership and organizational culture.
Johnson, S.A.; Ryan, H.E. & Tian, Y.S. 2005 Multiple industries or activities USA Incentives on personal level
Economic Archival Executives at fraud firms face greater financial incentives to commit fraud than do executives at industry- and size-matched control firms. After controlling for various firm, governance, and CEO characteristics, the likelihood of fraud is positively related to incentives from unrestricted stock holdings and is unrelated to incentives from restricted stock and unvested and vested options. Executives at fraud firms exercise larger fractions of their vested options, sell more stock, and receive greater total compensation during the fraud years than the control executives.
Burns, N. & Kedia, S. 2005 Multiple industries or activities USA Incentives on personal level
No theory Archival We find that the sensitivity of the CEO’s option portfolio to stock price is significantly positively related to the propensity to misreport. We do not find that the sensitivity of other components of CEO compensation, i.e., equity, restricted stock, long-term incentive payouts, and salary plus bonus have any significant impact on the propensity to misreport. Relative to other components of compensation, stock options are associated with stronger incentives to misreport because convexity in CEO wealth introduced by stock options limits the downside risk on detection of the misreporting.
Choo, F. & Tan, K. 2006 Multiple industries or activities USA Incentives on company level
Sociological Archival The exaggerated emphasis on monetary success
incorporated in American Dream will continue to be a catalyst for Fraud by corporate executives in the United States. O’Connor, J.P.;
Priem, R.L.; Coombs, J.E. & Gilley, K.M. 2006 Multiple industries or activities USA Incentives on personal level
Psychological Archival We found that increasing CEO-stock options were associated with a greater incidence of fraudulent financial reporting when a CEO was also board chair and the board was without stock options, and much more fraudulent financial reporting
occurred when the CEO was not board chair and the board had stock options.
Burns, N. & Kedia, S. 2006 Multiple industries or activities USA Incentives on personal level
28 Graafland, J.;
Kaptein, M. & Mazereeuw – van der Duijn Schouten, C. 2007 Multiple industries of activities Nether-lands Incentives on personal level No theory Case study
The authors find much inductive evidence of a relationship among their conception of God, norms and values, and business conduct. The authors also find that executives with a monotheistic conception of God display a stronger
orientation toward socially responsible business conduct than do executives with a pantheistic conception of God.
Therefore, it is less likely that executives who belief in a monotheistic conception of God will engage in occupational fraud then executives that belief in a pantheistic conception of God. Harris, J. & Bromiley, P. 2007 Multiple industries or activities USA Incentives on company and personal level
Psychological Archival We have supported empirically the argument that executive incentive compensation and poor relative firm performance provide pressures that can lead firms to act unethically. Sen, P.K. 2007 Multiple industries or activities USA Incentives on personal level
No theory Archival As the analysis of this paper shows, the question of
occupational fraud can only be answered in conjunction with the question of the extent of ownership of the firm by the manager. The results show that increased ownership may not necessarily reduce the propensity to commit fraud. As the gain from fraud and the corresponding penalty increases, unless the gain from fraud is completely offset through the penalty, the results suggest that more and more managers may find it optimal to engage in a mixed strategy and behave fraudulently some of the time. What is more likely to be successful is the certainty of determination and application of the penalty rather than its size.
Efendi, J.; Srivastava, A. & Swanson, E.P. 2007 Multiple industries or activities USA Incentives on company and personal level
Psychological Archival We find that the likelihood of a misstated financial statement increases greatly when the CEO has very sizable holdings of in-the-money stock options. Misstatements are also more likely for firms that are constrained by an interest-coverage debt covenant, that raise new debt or equity capital, or that have a CEO who serves as board chair.
Zhang, X.; Bartol, K.M.; Smith, K.G.; Pfarrer, M.D. & Khanin, D.M. 2008 Multiple industries or activities USA Incentives on personal level
29 Laux, C. &
Laux, V.
2009 No setting USA Incentives on personal level
No theory Analyses An increase in the pay-performance sensitivity not only has a positive effect on the CEO’s direct incentive to engage in fraud, but also on the audit committee’s incentive to diligently oversee the accounting process. Due to these two
countervailing forces, the amount of fraud can increase or decrease with the level of CEO incentive pay. However, we do not want to overstress this point, since there are
alternative explanations for the lack of correlation between CEO incentives and accounting fraud.
Armstrong, C.S.; Jagolinzer, A.D. & Larcker, D.F. 2009 Multiple industries or activities USA Incentives on personal level
No theory Archival We do not find evidence of a positive association between CEO equity incentives and accounting irregularities after matching CEOs on the observable characteristics of their contracting environments. Instead, we find some evidence that accounting irregularities occur less frequently at firms where CEOs have relatively higher levels of equity incentives. Chidambaran, N.K.; Kedia, S. & Prabhala, N.R. 2010 Multiple industries or activities USA Incentives on personal level
No theory Archival This paper finds a significant relation between fraud
probability and CEO-board connectedness. The nature of this relation depends on the institutional origin of the connection. While nonprofessional connectedness due to shared
educational and non-business antecedents increase fraud probability, professional connections formed due to common prior employment decrease fraud. Being nonprofessional connected with others gave CEOs incentives to engage in occupational fraud. Warren, D.; Zey, M.; Granston, T. & Roy, J. 2010 Multiple industries or activities USA Incentives on personal level
Psychological Archival A major finding is that the CEO’s stock-option compensation motivates the CEO to commit corporate earnings fraud, while cash salaries and bonuses are only indirectly related to earnings fraud through those stock options.
Chen, S. 2010 Multiple industries or activities USA Incentives on company and personal level
Organizational Analyses A combination of a narcissistic and dishonest CEO in conjunction with increasing shareholders' expectations and acquiescent subordinates can easily lead to self-propelling increasing cycles of financial misreporting.
Troy, C.; Smith, K.G. & Domino, M.A. 2011 Multiple industries or activities USA Incentives on personal level
30 Schrand, C.M. & Zechman, S.L.C. 2011 Multiple industries or activities USA Incentives on personal level
No theory Archival The fraud firm executives have significantly more fixed and variable compensation than the misreporting executives, consistent with the fraud firm executives exhibiting narcissism, which is a behavioral trait related to overconfidence. Rijsenbilt, A. & Commandeur, H. 2012 Multiple industries or activities USA Incentives on personal level
No theory Archival The findings confirm the expected influence of plausible proxies for CEO narcissism on fraud by showing a positive relationship. This confirms the psychologic perspective of CEO narcissism as a potential cause of fraud.
Otusanya, O.J.; Lauwo, S. & Ajibolade, S.O. 2013 Single industry or activity – Marketing and retailing Nigeria Incentives on company level
Sociological Archival Considerable emphasis is placed on the importance of financial success often with less regard being paid to the importance of using socially acceptable means for achieving such success. Executives are under systemic pressure to accumulate wealth while in office and may choose to accumulate capital by engaging in fraudulent practices. Khanna, V.S.;
Kim, E.H. & Lu, Y 2013 Multiple industries or activities USA Incentives on personal level
No theory Archival We find appointment-based CEO connectedness is positively related to the likelihood of corporate fraud and negatively related to the likelihood of detection, given fraud. Thus CEOs get incentives to commit fraud because they are able to delay detection, lower the likelihood of CEO dismissal after fraud discovery and reducing coordination costs of conducting frauds.
Chen, J.; Cumming, D.; Hou, W. & Lee, E. 2013 Multiple industries or activities China Incentives on personal level
No theory Archival Executives which have a low level of managerial integrity are more likely to engage in occupational fraud then executives with a high level of managerial integrity. Managerial integrity is measured by the amount of earnings manipulation. Ndofor, H.A.; Wesley, C. & Priem, R.L. 2013 Multiple industries or activities USA Incentives on company and on personal level
Psychological Archival We found that information asymmetries arising from industry and firm-level complexities increase the likelihood of financial fraud. Moreover, more CEO stock options increase the likelihood of fraud when industry complexity is high, while aggressive monitoring by the audit committee reduces the likelihood of reporting fraud when firm-level complexity is high. Jayaraman, S. & Milbourn, J. 2014 Multiple industries or activities USA Incentives on personal level
31 incentives, and that firms audited by an industry expert grant their CEOs greater equity incentives.
Choi, J.; Kwak, Y. & Choe, C. 2014 Multiple industries or activities Korea Incentives on company level
No theory Archival The departing CEO manipulates earnings upward when the departure is forced. However, such upward manipulation is significant only when the departing CEO is replaced by an internal candidate. The externally recruited CEO, in the case of peaceful turnover, also manipulates earnings upward. Conyon, M.J. & He, L. 2014 Multiple industries or activities China Incentives on personal level
Psychological Archival We document a significantly negative correlation between Chinese executive compensation and corporate fraud. Our findings are consistent with the hypothesis that firms penalize CEOs for fraud by lowering their pay.
Cormier, D.; Lapointe-Antunes, P. & Magnan, M. 2015 Multiple industries or activities Canada Incentives on personal level
No theory Analyses The findings suggest that firms accused of financial
misreporting exhibit features of strong CEO power and hubris as reflected in their relations with the self, others and the world. Biggerstaff, L.; Cicero, D.C. & Puckett, A. 2015 Multiple industries or activities USA Incentives on personal level
Psychological Archival We show that firms with Chief Executive Officers (CEOs) who personally benefit from options backdating are more likely to engage in other corporate misbehaviors, suggestive of an unethical corporate culture. These firms are more likely to commit financial fraud to overstate earnings.
32 Appendix B
References of papers reviewed in this paper
Albrecht, W. S., Albrecht, C. C., & Albrecht, C. O. (2004). Fraud and corporate executives: Agency, stewardship and broken trust. Journal of Forensic Accounting, 5(1), 109-130. Anderson, J. R., & Tirrell, M. E. (2004). Too Good to Be True CEOs and Financial Reporting
Fraud. Consulting Psychology Journal: Practice and Research, 56(1), 35.
Armstrong, C. S., Jagolinzer, A. D., & Larcker, D. F. (2010). Chief executive officer equity incentives and accounting irregularities. Journal of Accounting Research, 48(2), 225-271.
Bergstresser, D., & Philippon, T. (2004). CEO incentives and earnings management. Journal
of financial economics, 80(3), 511-529.
Biggerstaff, L., Cicero, D. C., & Puckett, A. (2015). Suspect CEOs, unethical culture, and corporate misbehavior. Journal of Financial Economics, 117(1), 98-121.
Burns, N., & Kedia, S. (2005). The impact of performance-based compensation on misreporting. Journal of financial economics, 79(1), 35-67.
Burns, N., & Kedia, S. (2006). Executive option exercises and financial misreporting. Journal
of Banking & Finance, 32(5), 845-857.
Chen, J., Cumming, D., Hou, W., & Lee, E. (2013). Executive integrity, audit opinion, and fraud in Chinese listed firms. Emerging Markets Review, 15, 72-91.
Chen, S. (2010). The role of ethical leadership versus institutional constraints: A simulation study of financial misreporting by CEOs. Journal of Business Ethics, 93(1), 33-52. Chidambaran, N. K., Kedia, S., & Prabhala, N. (2011). CEO director connections and
corporate fraud. Fordham University Schools of Business Research Paper. Choi, J. S., Kwak, Y. M., & Choe, C. (2014). Earnings management surrounding CEO
turnover: evidence from Korea. Abacus, 50(1), 25-55.
Choo, F., & Tan, K. (2006). An “American Dream” theory of corporate executive Fraud.
Accounting forum (Vol. 31, No. 2, pp. 203-215). Elsevier.
Conyon, M. J., & He, L. (2011). Executive compensation and corporate governance in China. Journal of Corporate Finance, 17(4), 1158-1175.
Cormier, D., Lapointe-Antunes, P., & Magnan, M. (2016). CEO power and CEO hubris: a prelude to financial misreporting? Management Decision, 54(2), 522-554.
33 Efendi, J., Srivastava, A., & Swanson, E. P. (2007). Why do corporate managers misstate
financial statements? The role of option compensation and other factors. Journal of
Financial Economics, 85(3), 667-708.
Erickson, M., Hanlon, M., & Maydew, E. L. (2004). Is there a link between executive equity incentives and accounting fraud? Journal of Accounting Research, 44(1), 113-143. Graafland, J., Kaptein, M., & Mazereeuw-van der Duijn Schouten, C. (2007). Conceptions of
God, Normative Convictions, and Socially Responsible Business Conduct An Explorative Study Among Executives. Business & Society, 46(3), 331-368. Harris, J., & Bromiley, P. (2007). Incentives to cheat: The influence of executive
compensation and firm performance on financial misrepresentation. Organization
Science, 18(3), 350-367.
Jayaraman, S., & Milbourn, T. (2014). CEO equity incentives and financial misreporting: The role of auditor expertise. The Accounting Review, 90(1), 321-350.
Johnson, S. A., Ryan, H. E., & Tian, Y. S. (2003). Executive compensation and corporate fraud. Journal of Accounting Research 46(3), 121-145
Khanna, V., Kim, E., & Lu, Y. (2015). CEO connectedness and corporate fraud. The Journal
of Finance, 70(3), 1203-1252.
Laux, C., & Laux, V. (2009). Board committees, CEO compensation, and earnings management. The accounting review, 84(3), 869-891.
Ndofor, H. A., Wesley, C., & Priem, R. L. (2015). Providing CEOs with opportunities to cheat the effects of complexity-based information asymmetries on financial reporting fraud. Journal of Management, 41(6), 1774-1797.
O'Connor, J. P., Priem, R. L., Coombs, J. E., & Gilley, K. M. (2006). Do CEO stock options prevent or promote fraudulent financial reporting? Academy of Management
Journal, 49(3), 483-500.
Otusanya, O. J., Lauwo, S., & Ajibolade, S. O. (2013). An investigation of corporate executive fraud by CEOs in the Nigerian banking sector. African Journal of
Accounting, Auditing and Finance, 2(1), 65-89.
Rijsenbilt, A., & Commandeur, H. (2013). Narcissus enters the courtroom: CEO narcissism and fraud. Journal of business ethics, 117(2), 413-429.
Schrand, C. M., & Zechman, S. L. (2012). Executive overconfidence and the slippery slope to financial misreporting. Journal of Accounting and Economics,53(1), 311-329.
Sen, P. K. (2007). Ownership incentives and management fraud. Journal of Business
Finance & Accounting, 34(7‐8), 1123-1140.
34 Warren, D., Zey, M., Granston, T., & Roy, J. (2011). Earnings fraud: board control vs CEO
control and corporate performance–1992–2004. Managerial and Decision
Economics, 32(1), 17-34.
Zahra, S. A., Priem, R. L., & Rasheed, A. A. (2005). The antecedents and consequences of top management fraud. Journal of Management, 31(6), 803-828.
Zhang, X., Bartol, K. M., Smith, K. G., Pfarrer, M. D., & Khanin, D. M. (2008). CEOs on the edge: Earnings manipulation and stock-based incentive misalignment. Academy of
