Authors:
Ramadhan Diansyah Putra, Darwin Angjaya, Caroline Tiofanny, Riana Sari, Iskandar Muda, S. Benitta Sherine

Addresses:
Department of Accounting, University of North Sumatra, Medan, North Sumatra, Indonesia. Department of Science and Humanities, Dhaanish Ahmed College of Engineering, Chennai, Tamil Nadu, India. 

Abstract:

Corporate wrongdoing is a sophisticated and intricate issue, having cost billions of dollars and causing loss of public trust. Here, three traditional and modern examples of corporate failure are contrasted and compared: the risk misstatement and liquidity crisis at Northern Rock, the systemic account internal fraud at Wells Fargo, and the supply chain/operational fraud at Foxconn. The aim is to go beyond narrative contrast and establish a quantitative basis for identifying the drivers, processes, and impact patterns of these different fraud archetypes. The current research uses a mixed-methods approach with qualitative content analysis as a preliminary step to identify the top thematic drivers. These are then used to construct a quantitative examination of a well-screened set of 492 data observations, including internal documents, whistleblower-proof, anonymised, and regulatory filings from three companies. Python (Pandas and Scikit-learn libraries) was used for qualitative modelling (regression and cluster) and quantitative content analysis software, particularly for thematic extraction (QCA-Miner). The study uncovers three distinct fraud profiles: 1) Incentive-Driven (Wells Fargo), 2) Risk-Misrepresentation (Northern Rock), and 3) Operational-Leakage (Foxconn). The study finds an exponential, synergistic, and highly correlated relationship between oversight loopholes and incentive pressure. This study contributes a rigorous methodology for categorising and analysing company collapses and demonstrates that fraud's cause-and-effect signatures are heterogeneous.

Keywords: Corporate Fraud; Case Study; Risk Management; Wells Fargo; Northern Rock; Economic Events; Risk-Misrepresentation; Incentive Pressure; Correlated Relationship.

Received on: 05/11/2024, Revised on: 01/02/2025, Accepted on: 29/03/2025, Published on: 14/09/2025

DOI: 10.69888/FTSSSL.2025.000496

FMDB Transactions on Sustainable Social Sciences Letters , 2025 Vol. 3 No. 3, Pages: 120-129

• Views : 76
• Downloads : 7

Download PDF