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The Impact Of Collusion On The Operation Of A Fraudulent Mortgage Origination Network, Cynthia Waddell

Presidential Alumni Research Dissemination Award

Statement on Auditing Standards (SAS) No. 99 illustrates the three fraud conditions (incentives/pressures, opportunities, and rationalizations/attitudes) in detail, but devotes less emphasis to collusion, another important element of fraud. The problem is that lack of research on the impact of collusion, especially at the transaction level, prevents auditors from focusing on this critical element during financial statement audits. Network theory was used to examine the impact of collusive relationships in a mortgage fraud network that operated in a midwestern city from 2003 to 2005. Data were collected from both private and public records. Research questions addressed the role of the …