How the brain's sensitivity for emotions causes accounting fraud
Monday, 2 May 2016
World-shaking accounting scandals often originate in financial reporting from internal accountants. By studying internal accountants’ brain activity, Professor Frank Hartmann of Rotterdam School of Management, Erasmus University (RSM) discovered that some misreporting comes from a neurological make-up that makes them more vulnerable to social pressure from managers promoting their own personal interests. Hartmann says the results shed a different light on who should – and who shouldn’t ‒ be hired for internal accountants’ positions.