Management role in the commission of fraud: a comparative analysis of U.S. corporate cases

One of the most significant challenges for organizations, regulators and society is corporate fraud. Most current literature focus on theoretical models of fraud or emphasize external regulatory perspectives, providing limited understanding of the actual managerial behaviours and circumstances involved in fraud cases. This thesis investigates how managerial roles contribute to fraud through the comparative analysis of real cases, with the objective of identifying patterns and clusters of managerial conduct. In particular, the study examines 25 large U.S. public companies that filed for bankruptcy between 1990 and 2006 and committed fraud between 1986 and 2003. Data were collected from SEC filings, press releases and academic publications and analysed to identify managerial profiles, objectives, fraud techniques and enabling governance mechanisms. The findings revealed distinct clusters of fraud practices across industries and regions, with high-complexity schemes concentrated in Manufacturing, Information and Wholesale sectors and simpler frauds in Health Care and other sectors. Managerial profiles are divided into three types: autocratic short-tenure CEOs, visionary charismatic CEOs and family or founder leaders, each having their own set of fraud techniques and objectives. The analysis also highlights how weak governance, ineffective oversight and auditor failures facilitated misconduct. By providing models of managerial fraud based on real-world examples, this research contributes to the literature and emphasizes the need for prevention strategies that go beyond internal control, emphasizing managerial behaviour, governance quality and external accountability.