Researchers investigate the role of accounting in Ponzi schemes, specifically focusing on how the provision of accounting reports, such as falsified financial statements and fictional audit opinions, affects investors' trust and the magnitude and lifespan of Ponzi schemes. Unlike most fraud investigations that compare fraud firms with non-fraud firms, this research specifically targets Ponzi schemes where the use of accounting reports is discretionary and examines how these reports influence the success of the fraud, measured in terms of its duration and the total investment attracted.
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