This study aims to trace the impact of corporate social responsibility (CSR), and its social, environmental and governance dimensions, on accounting fraud.
ASSET4 data from 793 French, Canadian, British and German companies were collected over a 12-year period, from 2010–2021, and assumptions were examined using a logistic regression model. The adjusted model of Beneish (1999) was used to measure accounting fraud.
The results reveal that strong CSR significantly lowers the likelihood of corporate fraud, with each CSR dimension showing a negative and significant relationship with fraudulent behavior. The governance dimension consistently shows the strongest impact in reducing fraud. In addition, the COVID-19 pandemic notably decreased fraud in some countries, such as the UK, highlighting CSR’s enhanced preventive role during crises. However, this moderating effect varied across countries. Further robustness analyses affirmed the stability and applicability of these results across various model specifications.
This study highlights the vital role of CSR, especially its governance dimension, in reducing accounting fraud, offering key insights for investors, auditors and regulators. It underscores the need to integrate ethical principles into governance, particularly in times of crisis like the COVID-19 pandemic. Future research could examine how national institutional contexts influence CSR’s effectiveness in preventing fraud.
The results of this study provide valuable information on the importance of strengthening engagement in CSR activities to prevent companies from engaging in fraudulent activities.
