Staff bonding and accounting fraud tendency : does cost of living matter?

Abstract

PURPOSE : The paper explores the ramifications of rising costs of living on accounting fraud (ACF) as well as how it disrupts the effect of staff bonding (SB) on ACF tendencies. DESIGN/METHODOLOGY/APPROACH : Data were collected from 310 respondents using a structured questionnaire and analysed using the partial least squares structural equation model. FINDINGS : The study reveals that rising costs of living increase ACF tendencies, while SB reduces it. However, the study also shows that costs of living decrease the effectiveness of SB as a corporate governance measure, aligning with the Stimulus, Capability, Opportunity, Rationalisation, and Ego (S.C.O.R.E.) theory. ORIGINALITY/VALUE : The paper’s theoretical contribution is consistent with the S.C.O.R.E. theory. The study concluded that working with hungry employees, whose disposable incomes are further worsened by rising costs of living, is not only an anticipatory accident but also a timed bomb waiting to explode. Hence, as the leading study on the intricate relationships, one takeaway from the study is that strengthening SB conditions and maintaining salary parity with rising costs of living are two excellent strategies for mitigating ACF.