【正文】 it management fraud include factors such as a weak board of directors or inadequate internal controls. Finally, fraud perpetrators must have some way to rationalize their actions as acceptable. For corporate executives, rationalizations to mit fraud might include thoughts such as “we need to keep the stock price high,” “all panies use aggressive accounting 3 practices,” or “it is for the good of the pany.” These three elements of the fraud triangle are interactive. With fraud, the greater the perceived opportunity or the more intense the pressure, the less rationalization it takes for someone to mit fraud. Likewise, the more dishonest a perpetrator is and the easier it is for him or her to rationalize deviant behavior, the less opportunity and/or pressure it takes to motivate fraud. REASON RECENT LARGESCALE FRAUDS OCCURRED The fraud triangle provides insight into why recent financial statement frauds occurred. In addition to the factors that motivate a person to mit fraud, there were several specific elements that led to the largescale frauds of the past decade (Albrecht et al., 2021). These elements contributed to a perfect storm that led to the massive frauds of the last few years. The first element of this perfect storm was the masking of many existing problems and uhical actions by the expanding economies of the 1990s and early 2021s. During this time, most businesses appeared to be highly profitable, including many new “dot” panies that were testing new and unproven (and many times unprofitable) business models. The economy was booming, and investment was high. In this period of perceived success, people made nonsensical investment and other advent of investing over the Inter for a few dollars per trade brought many new, inexperienced people to the stock market. It is now clear that many of the frauds revealed since 2021 were actually being mitted during the boom years, but that the apparent booming economy hid the fraudulent booming economy also caused executives, board members, and stockholders to believe that their panies were more successful than they actually were and that their panies’ success was primarily a result of good management. In addition, research has shown that extended periods of prosperity can reduce a firm’s motivation to prehend the causes of success, raising the likelihood of faulty attributions (Sundaramurthy and Lewis, 2021). The second element of the perfect storm was the moral decay that had been occurring in the United States and around the world. Political correctness did many 4 good things for society, but it also veiled dishonesty in new language that allowed some to rationalize fraudulent behavior. Many role models in sports, politics, and movies were no longer examples of honesty and integrity. While some may argue that role models have been dishonest or immoral throughout history, the significantly increased access in recent decades to their behavior through widespread media coverage, Inter sites, blogs, and general transparency affected the existing workforce and the young alike. Whatever measure of integrity one uses, dishonesty appears to be increasing. The third element of the perfect storm was misplaced executive incentives. For example, agency theory’s solution of aligning executive pay with pany performance was practiced to the extreme in many cases ( Jensen and Meckling, 1976). Executives of many fraudulent panies were endowed with hundreds of millions of dollars in stock options and/or restricted stock that placed more pressure on keeping the stock price rising than on reporting financial results accurately. In many cases, this stockbased pensation far exceeded executives’ salarybased pensation. The attention of many CEOs shifted from managing the firm to managing the stock price. At the cost of countless billions of dollars, managing the stock price all too often turned into fraudulently managing the financials. The fourth element of the perfect storm—and one closely related to the last—was the often unachievable expectations of Wall Street analysts that primarily targeted shortterm behavior. Company boards and management, generally lacking alternative performance metrics, used parisons with the stock price of “si