Internal controls, routine activity theory (RAT), and sustained online auction deception: A longitudinal analysis

This paper adapts and extends routine activity theory (RAT) to investigate the co-evolution of eBay's controls with mundane crime in the rapidly growing auction market of 1997-2005. A suspected deceptive seller's eight-year account history indicates the presence of the three market characteristics that RAT identifies as essential for deception: (1) a motivated offender, (2) suitable targets, and (3) an absence of capable guardians (i.e., regulation and eBay controls). The results document the co-evolution of a deceptive seller's tactics with eBay's controls. The investigation introduces (1) a new market, i.e., the early online auctions, (2) a new theory, i.e., RAT, and (3) new data, i.e., of a long-term deceptive seller, to the accounting controls literature. Contributions include tracing the evolving eBay control system, considering eBay's feedback system as an emergent form of continuous monitoring, and investigating the potential of RAT as an alternative theory for understanding control violations and informing accounting control analysis and design.