Financial statement fraud, recidivism and punishment

Yang Wang*, John Ashton, Abdul Aziz Jaafar

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This study examines the relationship between the high reported levels of recidivism committed by Chinese firms and different punishments between 2007 and 2019. We find that there are six major types of financial statement fraud with many firms employing multiple fraud techniques simultaneousljavascript:void(0);y. When administrative and supervisory measures are used to punish fraudulent firms, recidivism is significantly reduced. In contrast, when self-regulatory measures are used to punish fraudulent firms, we report recidivism is not reduced yet increases. The results imply administrative measures are the most effective measures to tackle reoffending and self-regulatory measures are the least effective punishment.
Original languageEnglish
Article number101033
JournalEmerging Markets Review
Publication statusAccepted/In press - 15 May 2023


  • Financial statement fraud, Corporate governance, Punishment, Recidivism

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