Accounting Forum

Guardians of accountability: Accounting professionals’ roles in fraud prevention and early internal detection

Scandals involving accounting and financial reporting have continued to disrupt markets, organisations, and professional reputations despite decades of regulatory reform and intensified audit scrutiny. High-profile cases such as Enron, Parmalat, Wirecard, Carillion, and various audit failures involving major firms such as KPMG, EY, and PwC, have led to renewed public scrutiny of the accounting profession’s role in safeguarding financial integrity. These scandals are not only accounting failures; they are deeply social, institutional, and moral events. While scholarship has advanced significantly in examining fraud and scandals from multiple perspectives, e.g. individual, organisational, institutional, and discursive, less emphasis has been placed on the preventive dimensions of accounting scandals: how they might be avoided altogether, what conditions foster a climate of integrity, and how internal and external actors navigate the terrain of ethics, accountability, and silence (Anessi-Pessina et al. 2024; Grossi & Pianezzi, 2018; Hoskin, 2015; Lassaou et al., 2021; Neu et al., 2013; Nieto-Morales & Rios, 2022). This special issue of Accounting Forum seeks to address this gap by exploring the professional, organisational, and institutional conditions that enable or impede the prevention of fraud and accounting scandals.

Although the accounting literature has been prolific in analysing fraud (Campa & Laguecir, 2025; Campa et al., 2025; Free & Murphy, 2015; Morales et al., 2014), most of this work has focused on the aftermath, i.e., on public disclosure, blame allocation, media framing, and regulatory responses. Prevention and early internal detection, by contrast, has often been confined to prescriptive or compliance-oriented discussions, such as strengthening internal controls, enhancing audit committee independence, or imposing more stringent legal sanctions. However, growing critical scholarship has highlighted the limits of these approaches, particularly in light of phenomena such as symbolic compliance, the normalisation of deviance, and organisational silence (Courtois & Gendron, 2017; Gabbioneta et al., 2013; Laguecir & Leca, 2021). The persistence of scandals in spite of reforms points to a deeper problem: a failure to engage holistically with the social and institutional processes through which fraud is produced, ignored, enabled, or resisted within organisations. Similarly, organizational structures matter. For instance, matrix organizations, characterized by dual lines of reporting and shared authority, may operate as preventative architectures against fraud. By dispersing power and decoupling supervisory authority from career advancement decisions, such structures can reduce the personal and professional costs associated with maintaining integrity. Employees embedded in matrix arrangements are often less vulnerable to pressure from a single authority figure, potentially lowering the incentives to comply with unethical directives. In contrast, more hierarchical structures, where accountability is tightly linked to singular lines of command, may heighten the stakes of ethical dissent, thereby increasing the cost of acting with integrity.

Research on organizational deviance and corruption contagion suggests that flatter, more distributed configurations can mitigate the rapid diffusion of unethical behaviour (Ashforth & Anand, 2003; Palmer, 2012), while centralized hierarchies may exacerbate risk by consolidating power and limiting internal challenge (Rosenblatt, 2012). These dynamics point to the need for a more nuanced understanding of how organizational design interacts with individual agency and institutional norms in either constraining or facilitating fraudulent conduct. This special issue aims to open new avenues of inquiry that foreground prevention as a rich and multidimensional object of study and to explore the role that several actors play in this field. For example, the role of auditors and certified fraud examiners (CFEs) has also become a key area of concern. While auditors are mandated to act as independent monitors, their effectiveness in detecting or deterring fraud is often limited by client pressures, conflicts of interest, and narrow interpretations of audit scope (Courtois & Gendron, 2020; Hassink et al., 2010). CFEs, who are trained to prevent and investigate fraud, often work in ambiguous roles that straddle compliance, risk management, and internal oversight. Their position is often undermined by power asymmetries, limited authority, or organisational inertia.

Despite growing attention, we still lack in-depth studies that explore how these professionals operate in practice, how they navigate ethical dilemmas, how their interventions are received within organisational settings, and how their work is influenced by jurisdictional and regulatory conditions (Courtois, 2023; Dellaportas, 2013). For instance, in 2021, Norway updated its Audit Act to harmonize the national and international audit legislation, which notably expanded the responsibilities of auditors in the detection and prevention of fraud. Under the updated legal framework, auditors are now expected to play a more proactive role in identifying signs of corruption, financial misconduct, and irregularities during their audits. This includes conducting enhanced due diligence, especially in high-risk industries, and integrating anti-corruption compliance into their audit procedures. The law also imposes a mandatory duty to report suspicious activities to the relevant authorities, and auditors may face increased liability if they fail to detect or disclose fraudulent behavior due to negligence. These changes reflect the evolving expectations placed on these professionals.

Furthermore, a crucial yet under-researched avenue for prevention lies in the role of internal accountants, both financial and managerial, as potential whistle-blowers. Particular attention may be given to management accountants, who, due to their access to internal financial data, are uniquely positioned to detect and report fraudulent activities. Existing research has highlighted the psychological and professional risks they face when reporting wrongdoing, including retaliation, isolation, and damage to career prospects (Alleyne et al., 2013; Cordis & Lambert, 2017; Gao & Brink, 2017; Quayle, 2021). These individuals are often caught between legal obligations, organisational loyalty, and ethical imperatives. Their decisions to disclose or remain silent are shaped not only by personal values, but also by institutional cultures, support mechanisms, and the anticipated responses of professional bodies.

Whistle-blowing in such contexts is not a singular act but a complex, often protracted, process of negotiation, strategy, and resistance (Maroun & Solomon, 2014; Stolowy et al., 2019; Vandekerckhove & Phillips, 2019). Viewed through a broader socio-political lens, such acts can be seen as modern instances of parrhesia, the ancient Greek notion of speaking truth to power for the sake of the common good, despite personal risk. As a foundational principle of democratic life, parrhesia invites us to consider not only the individual courage of whistle-blowers, but also the organizational conditions that either suppress or enable such truth-telling. In this light, the question becomes: how do we design institutions that can accommodate and even protect parrhesia as an ethical and democratic practice? The answer has potential consequences not just for fraud prevention, but for the resilience of the democratic project itself.

Technological developments have further transformed the landscape of fraud and its prevention and early internal detection. The rise of digital finance, algorithmic decision-making, blockchain technologies, and platform economies has created new opportunities for fraudulent practices, while simultaneously offering tools for real-time detection, anomaly analysis, and automated monitoring (Laguecir & Leca, 2023; Oelrich, 2023). Yet these technologies also raise new ethical, organisational, and epistemic questions (Berlinski & Morales, 2024; Knudsen et al., 2025). Who controls the data? What biases are embedded in detection algorithms? How do these tools reshape professional responsibilities and institutional oversight? Critical accounting research has only begun to explore the implications of these shifts for fraud prevention, and this special issue seeks to advance this important line of inquiry.

This special issue welcomes a broad range of theoretical and empirical contributions that deepen our understanding of fraud prevention and early internal detection in accounting, with particular attention to under-explored institutional dynamics, emerging technologies, and the ethical complexities faced by professionals. Submissions may draw on a variety of theoretical lenses and methodologies and may be situated in diverse national, regional, or sectoral contexts. Relevant research questions include, but are not limited to:

• What is the role of auditors, fraud examiners, and other professionals in detecting or preventing fraud, and how do they navigate their responsibilities in practice?
• How does digitalisation, e.g. through blockchain, AI, and fintech infrastructures, redefine the risks, opportunities, and challenges for fraud detection and early internal detection?
• What organisational conditions and cultural norms enable or suppress ethical decision-making in the accounting function?
• What ethical and psychological consequences do internal whistle-blowers face, and how do these shape their decisions to speak up or remain silent?
• What legal, organisational, and professional safeguards exist, or should exist, to protect those who (would like to) disclose financial wrongdoing?
• What lessons can be drawn from failures to prevent scandals, particularly where early warnings were available but ignored?
• How do institutional settings and regulatory environments facilitate or constrain meaningful fraud prevention and early internal detection?
• What is the role of the communities and NGOs in disclosing information to prevent fraud and accounting scandals?