ABSTRACT
This chapter begins to shed light upon the dynamics of over-compliance and the trap that is conformity. It presents preliminary research and outlines how the cognitive patterns and ideological pressures of a profession wove together within financial analyses to short-circuit economic rationality within these organizations. This social rationalizing behaviour masquerading as rational analysis and accounting compliance is explored by using descriptive organizational models. The chapter seeks to understand how this might happen by proposing several cases and a conceptual over-compliance framework that presents some compliance models. It is exploratory in nature and will require further research of its very preliminary conclusions. The chapter focuses upon processes within three cases of non-analysis and so-called fact-checking that resulted in the meteoric success, stock crash, delisting and bankruptcy, and fraud prosecution of Canada's largest listed forest products company, Sino-Forest Products, and the bankruptcy of two US investment firms, Madoff Investments and Lehman Brothers.
