Revisiting the Accounting Fraud Components: A Bottom-Up Approach Using the Twitter Platform

Abstract

Despite the relevant economic and reputational impact of fraud, research in this field remains fragmented. This study aims to create a new framework for accounting fraud, defining its main components from the social media user’s perspective. In terms of research technique, an online data collection using social media platform was used retrieving, through the phyton web crawler procedure, 43,655 tweets containing the phrase “accounting fraud” from July 2006 to December 2019. Individual words were identified and treated within the selected tweets, excluding stop words and, finally, using a sparsity index. The proposed methodology, which overcomes traditional survey inherent bias efficiently, contributes to bridging the divide between academia and society. We find that Twitter users shape the Accounting Fraud Hexagon, composed by (i) The Object and the Tool (of misrepresentation), being the Financials, (ii) The (Guilty) Fraudster, (iii) The Defrauded, (iv) Materiality, (v) The Consequences, and (vi) the Watchdog. Our research has several implications. Our research identifies additional “angles” of vision to the traditional fraud triangle-diamond-pentagon theories compared with the existing top-down conceptual frameworks. Also, since it uses a bottom-up instead of a top-down approach, the study allows a more comprehensive definition of accounting fraud, thus contributing to the debate for a common language in this field. We expect to encourage more research using social media as a tool to test the literature built on in vitro theories empirically.