Subject. We typified persons charged with financial reporting, who are more than inclined to misstatement risk due to fraud. Objectives. We herein develop a methodological framework for determining types of people charged with financial reporting. The typification is based on behavioral traits of the inclination to material misstatement risk. Methods. We applied multivariate statistical methods of factor and cluster analyses on the basis of empirical data we gathered in the survey of 515 employees charged with financial reporting. Results. As we found, if a person charged with financial reporting has some behavioral traits admitting the possibility of taking risk and an expectation of remaining unpunished and a pathological monetary type in case of legislative illiteracy, these signs mean the inclination to material misstatement risk due to fraud. Such people account for nine percent of the sample. One third of the sample is made up of people who are not inclined to risk at all. The neutral group in terms of the above risk comprises slightly more than one third. The remaining people (about 23 percent) can be qualified as suspicious in terms of their inclination to the above risk, which should be a reason for additional auditing procedures. Conclusions. Being not very difficult, the proposed methodological framework helps improve the efficacy of risk assessment procedures during audits. From perspectives of the inclination to business risk, determining types of employees charged with financial reports allows to decide on the necessity of additional auditing procedures when setting up the audit strategy and planning to cushion the material misstatement risks due to fraud.
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