Morality Versus Sociology Theories : Explanation of Financial Reporting Fraud

Previous studies had attributed the management fraud to different reasons. Williams (2012) suggested that the management fraud is motivated by proposed unrealistic goals supported by attractive compensations. Frankel (2012) attributed the management fraud to CEO's unethical financial decisions and the complexity of information technology. The manager fraud behavior is influenced by several factors such as an intrapersonal (attitude, values, belief, and personality traits), social (social norms and controls), institutional (policies, laws, rules and regulations), and ethical factors (personal moral value and organization value/culture). In other words, the management fraud is the outcome of the management decision-making, which is influenced by managers' personal values, personal beliefs, organizational factor, and social factors. To detect and prevent fraud, it is helpful to know its root causes, thereby manage the fraud risk exposure. Previous studies have linked the management fraud to various theoretical frameworks such as a differential association theory, a general stain theory, and business ethics theory