Strain, Differential Association, and Coercion: Insights from the Criminology Literature on Causes of Accountant's Misconduct

This paper introduces to the accounting literature two prominent criminology theories, strain and differential association, as possible explanations for criminal behavior by accountants and applies a recent integration of the two, coercion theory, to three recent financial statement frauds. We argue that understanding and preventing fraudulent accounting can be furthered by placing the phenomenon within the context of criminology research, which supports both individual and group‐level explanations for white‐collar crime. We also suggest that the American Institute of Certified Public Accountants (AICPA) moved too quickly in adopting Cressey's fraud triangle as the explanatory model for financial fraud in Statement on Auditing Standards (SAS) No. 99. Our analysis, although exploratory in nature, suggests that examining financial statement fraud through the lens provided by criminology theory may provide new insights into its causes as well as tools for detection and prevention. We conclude with a discussion of policy implications.