Psykopatiske erhvervsledere og revisors erfaringer forbundet hermed

Christina Leder

Student thesis: Master thesis

Abstract

The purpose of this thesis is to study and examine the range of in which auditors experience corporate psychopaths among clients, and if this, given the potential risk related to fraud, is taken into account when the audit is planned and performed. In order to study and examine the above, the thesis initially seeks to incorporate the behavioral characteristics of a psychopath, as well as a description of the most common types of corporate psychopaths. In that context, one of the most used methods on a global level to identify a psychopath (the PCL-R: Psychopathy Checklist-Revised), is accounted for. The recent number of corporate scandals has raised the question about the principal characters being psychopaths, as well as a possible connection between psychopathic leaders and fraud. Based on this, the thesis describes two distinguished Danish corporate scandals, and discusses whether the key figures in those scandals can be characterized as psychopaths. The thesis' empiricism has been achieved through a conducted survey among auditors. The surveys main focus is on auditors experiences with corporate psychopaths, and their influence on the audit - hereby the possible connection to fraudulent conduct and embezzlement. The conducted survey reveals that leaders with psychopathic behaviors are a common phenomenon, due to the fact that most of the auditors have experienced one or more of these deviant behaviors during their career. But in spite of this, as well as the numerous assumptions about a correlation between fraud and psychopathic behavior, the conducted survey shows no immediate connection. The conducted survey also indicates that a management assessment is an important and regular part of the audit. In general, the assessment includes an evaluation of the credibility and integrity of the management, but aspects as the willingness to take a risk as well as the overall behavior is also taken into consideration. However, these assessments are often carried out very cursorily, and with a general approach towards fraud risks and not directly towards deviant behavior among the management. As the auditors do not hold a degree within psychology, a thorough assessment of the management is considered an exceedingly difficult assignment. In addition to this, the use of detailed checklists regarding managerial behavior is relatively confined, given that the auditor's assessments mainly are based on common sense as well as a gut feeling. Based on the analysis and findings, the thesis' overall conclusion is that corporate psychopaths are a common phenomenon, but that the behavior not necessarily increases the risk of fraud. Furthermore it can be concluded, that the auditors to a certain extent, evaluates the management behavior as part of their risk assessment and the audit in general, however not by detailed audit procedures.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages113