Aristotle and Accounting: Building Virtue to Fight Fraud
OUTSTANDING PRACTITIONER PAPER AWARD
Strategic Finance, March 2025 Related: Institute of Management Accounts “Count Me In” podcast
Douglas Boyle Dennis Haggerty Dana R. Hermanson
Fraud continues to be a major societal issue. Too often, we attack the fraud problem only using tough internal controls and severe penalties for those who commit fraud. While well-intended, such efforts to combat fraud often fail. We draw from the work of Aristotle and Plato, as well as research in psychology, to offer a complementary approach to fighting fraud by developing employees and leaders with virtue. We discuss key virtues, such as honesty, courage, justice, and judgment, and we provide practical guidance on how to build virtue in organizations.
Under a virtue framework, the answer to, “Why not commit fraud if I think I can get away with it?” can move beyond avoiding punishment or citing certain values to become: “Because doing so would be dishonorable, would not foster self-respect, and is not conducive to an excellent life well-lived.” Armed with virtue, we believe that accountants and financial professionals will be better prepared to deal with the temptations and pressures that lie ahead. We hope that our message about virtue will contribute to the global fight against fraud.
While the audience for scholarly journals is typically other academics, practitioner journals, on the other hand, are written specifically for people working in that field. Papers in practitioner journals often have actionable best practices that can support professionals immediately. This section features the award given by the Coles College to faculty who publish high-quality work in practitioner journals.
Internal controls and penalties are not sufficient to mitigate fraud risk. Developing virtue is a complementary way to attack fraud. Honesty, courage, justice, and judgment can help protect from temptation and pressure. We provide practical guidance on how to build virtue in organizations.
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