AC202: Corporate Fraud and Accountability: Principles and Practices

Corporate misconduct and fraud can threaten organisational reputation and long-term value. Companies must navigate complex ethical landscapes while ensuring leadership integrity and robust accountability mechanisms.

This course introduces you to the challenge of managing misconduct risk at the executive level. You will explore the underlying drivers of corporate fraud, examining classical frameworks such as the fraud triangle and agency theory to understand what motivates unethical behaviour and fuels regulatory demand.

Through this course, you will:

• Gain insight into why misconduct occurs and how organisations can respond strategically
• Evaluate internal control mechanisms including board structures, accountability systems, and compensation arrangements that align leader’s incentives with shareholder interests
• Explore how gatekeepers - auditors, financial analysts, and regulators - provide external oversight in capital markets to detect and address misconduct
• Analyse real-world examples of corporate failures to understand why these safeguards sometimes break down
• Examine efforts to measure and manage risk culture in organisations

This course is practical and case-driven. You will engage with high-profile examples of corporate misconduct and learn to evaluate compliance and the effectiveness of both internal controls and external monitoring mechanisms.

By the end, you’ll be prepared to identify the forces behind corporate misconduct, apply tools to strengthen governance and accountability structures, and recognise the limitations of current approaches to managing executive oversight.

Prerequisites: A university-level course that includes content in accounting, finance, economics, management, law or other business-related subjects.

Level: 200 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two written examinations (Midterm exam 40% and final exam 60%)

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is for students seeking a practical understanding of corporate governance, fraud prevention, and executive oversight. If you are pursuing a career in accounting, finance, law, consulting, or public policy, you should consider this course. It will also be useful if you are planning to pursue graduate studies (e.g., MBA, MSc., MPP) or internships in these areas and wish to build foundational knowledge.

• Examine drivers of corporate misconduct and the resulting demand for regulation 
• Analyse how internal governance structures - including boards of directors, compensation schemes, and internal controls - shape responsible leadership 
• Evaluate the effectiveness of capital market gatekeepers such as auditors and analysts in detecting and preventing fraud 
• Apply insights from real-world cases to assess organisational culture, compliance and risk management

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.