Title: Transcending borders: unveiling financial statement fraud's public interest impact

Authors: Jennifer Hamrick; Arline Savage; Mark Edmonds; Tad Miller

Addresses: Department of Accounting and Finance, Collat School of Business, University of Alabama at Birmingham, 710 13th St. S. Birmingham, AL 35233, USA ' Department of Accounting and Finance, Collat School of Business, University of Alabama at Birmingham, 710 13th St. S. Birmingham, AL 35233, USA ' Department of Accounting and Finance, Collat School of Business, University of Alabama at Birmingham, 710 13th St. S. Birmingham, AL 35233, USA ' Department of Accounting and Law, Orfalea College of Business, 1 Grand Ave., San Luis Obispo, CA 93407, USA

Abstract: Fraudulent financial statements, prepared with the intention to deceive, are a costly social and global problem. In this study, we discuss the role of financial reporting in the public interest within the context of the International Federation of Accountants (IFAC) Policy Position 5, A Definition of the Public Interest, and the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct definition of the public interest principle. We follow this by evaluating how financial statement fraud impacts the public interest. Finally, using the Lehman Brothers case, which illustrates whistleblower retaliation, earnings management, and corporate governance failure, we examine accounting malfeasance that transcends local and national jurisdictions and violates public trust.

Keywords: financial statement fraud; Lehman; International Federation of Accountants; IFAC; public interest; whistleblowers.

DOI: 10.1504/IJMCP.2025.147338

International Journal of Management Concepts and Philosophy, 2025 Vol.18 No.3, pp.318 - 333

Received: 25 Sep 2023
Accepted: 28 Sep 2023
Published online: 14 Jul 2025 *

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