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The primary research question of this study is to what extent auditors comply with auditing standards once they encounter fraud and whether compliance is associated with particular fraud characteristics (i.e. material versus immaterial fraud, management versus employee fraud, statutory versus voluntary audit and external versus internal fraud) as well as with auditor (experience) and audit firm characteristics (Big Four versus non‐Big Four). The study also aims to provide evidence on the role of auditors in redressing fraud. Redress refers to the auditee taking measures to nullify the consequences of the fraud, insofar as possible, and to prevent any recurrence of such fraud.

To gather data on the role of auditors in fraud cases, a survey was conducted among all audit partners of the top 30 Dutch audit firms. In total, 1,218 audit partners were selected and received a postal questionnaire. In total, 326 questionnaires were returned (27 per cent), of which 296 (24 per cent) were usable.

The results reveal that auditors fail to comply with some important elements of fraud standards. There are substantial differences among audit firms regarding compliance with the relevant auditing standards. Furthermore, auditors appear to encounter corporate fraud only incidentally. About half of the auditors believe they have a “significant” impact on redressing fraud.

One of the main research findings is that it is difficult for individual auditors to build up expertise in fraud detection. There appears to be a need for specific training programs for auditors to help them to detect fraud, emphasizing the need for mandatory consultation with the technical department of the audit firm once “red flags” indicating fraud are found. Indeed, this need for change has been addressed by the Dutch professional accountancy body NIVRA as a direct result of the findings of this study.

This study extends existing research by investigating the compliance of auditors with fraud standards and it sheds light on the actual redress experiences of auditors. It focuses on the actions taken by auditors – or the lack thereof – in situations where auditors encounter fraud signals. The study indicates that in the absence of good oversight, auditors have mixed incentives when they are confronted with signals for fraud, resulting in actions that are not always in line with existing regulatory requirements.

This paper examines the role of professional associations, governmental agencies, and international accounting and auditing bodies in promulgating standards to deter and detect fraud, domestically and abroad. Specifically, it focuses on the role played by the US Securities and Exchange Commission (SEC), the American Institute of Certified Public Accountants (AICPA), the Institute of Internal Auditors (IIA), the Institute of Management Accountants (IMA), the Association of Certified Fraud Examiners (ACFE), the US Government Accounting Office (GAO), and other national and foreign professional associations, in promulgating auditing standards and procedures to prevent fraud in financial statements and other white‐collar crimes. It also examines several fraud cases and the impact of management and employee fraud on the various business sectors such as insurance, banking, health care, and manufacturing, as well as the role of management, the boards of directors, the audit committees, auditors, and fraud examiners and their liability in the fraud prevention and investigation.

The purpose of this study is to examine whether policies and procedures, one of the fundamental elements in the internal control environment, are adequate and effective in preventing fraud and unethical practices committed by employees of a company. In addition, this study attempts to assess the awareness and understanding of employees on the existence of relevant company policies and standard operating procedures for internal fraud and misconduct deterrence.

Five cases from one Malaysian telecommunication company were randomly selected as a case study. Content analyses were conducted on actual cases of internal fraud and wrongdoings that were investigated and the enforcement that was discharged by the company.

This study found that the company has sufficient policies and standard operating procedures to curb internal fraud and wrongdoing. However, they are ineffective and malfunction when responsible personnel violate or override the policies and procedures, irrespective of whether this is caused by carelessness, poor knowledge or clear intention to act dishonestly.

This study was conducted on only one company with a limited number of investigated fraud cases. Access to higher number of fraud cases, particularly those that involved large amount of losses and considered as high-profile cases, were denied because of confidentiality.

The study found that weak compliance to internal controls provides opportunities for fraud to occur, consistent with the fraud triangle theory. Fraud, committed both outside and inside an organization, can be considered as a worrying problem in the organization because of its severe impact on the reputation and bottom line figures of the company. The study provides important information to management to strengthen their compliance with the internal control system generally and policies and procedures particularly.

This study is original, as it focuses on the actual fraud cases that occur in the telecommunication industry, which is under-researched in fraud literature, particularly in developing markets such as Malaysia. Prior empirical research on fraud and unethical practices has concentrated on factors that contribute to fraud and the financial and non-financial impacts of fraud in an organization.

This guide is compiled in order that banks may see the extent of the overall problem of fraud and money laundering in documentary credit transactions. It also contains advice on how banks and bankers may protect themselves and their staff from the consequences of fraudulent attacks against the system.

The purpose of this paper is to provide evidence on the additional costs of dealing with staff fraud, beyond the initial fraud loss, based on 45 cases of staff fraud.

The research began with a “brainstorming” session with counter fraud professionals to map all potential costs in a staff fraud. It then utilised a twin-track approach of a survey and interviews. A survey was distributed using a number of methods yielding 28 usable cases. Interviews were also sought with organisations willing to discuss staff fraud, which secured a further 17 cases. Both the survey and interview used the same questionnaire, although the latter enabled a deeper questioning of participants.

This study examined 45 cases of staff fraud from a wide range of sectors drawn predominantly from larger organisations. From each of these cases detailed, estimates of the costs of dealing with the fraud were identified. Major additional costs included the costs of investigation, staff suspensions, internal disciplinary costs, external sanctions, permanent staff replacement, miscellaneous costs as well as intangible costs. The findings identified significant costs which are significantly above the initial value of the fraud, particularly on initial frauds under £25,000.

Staff fraud is a very sensitive subject with many organisations unwilling to reveal what happens when it occurs. The approach was therefore to secure as much data as possible and as such this might not be representative of the broader economy.

The paper highlights the need for greater investment in prevention given the substantial costs of staff fraud to deal with.

This is the first attempt to gauge the full costs of staff fraud to an organisation.

Supply chain fraud is a significant global concern for firms, consumers and governments. Evidence of major fraud events suggests the role of supply chain structures in enabling and facilitating fraud, as they often involve several parties in complicated networks designed to obfuscate the fraud. This paper identifies how the structural characteristics of supply chains can play an important role in enabling, facilitating and preventing fraud.

The research follows a theory elaboration approach. The authors build on structural holes theory in conjunction with a multiple case study research design to identify new concepts and develop propositions regarding the role of network structure on supply chain fraud.

This research shows how structural holes in a supply chain can create advantages for unscrupulous firms, a role we call tertius fraudans, or the cheating third. This situation is exacerbated by structural ignorance, which refers to the lack of knowledge about structural connections in the network. Both structural holes and structural ignorance can create information gaps that facilitate fraud, and the authors propose solutions to detect and prevent this kind of fraud.

This paper extends structural holes theory into the domain of fraud. Novel concepts including tertius fraudans, structural ignorance and bridge collapse are offered, alongside a series of propositions that can help understand and manage structural supply chain fraud.

This study aims to propose a law enforcement strategy for investment fraud through comparative studies in the United States of America (USA), Canada and Indonesia, and to identify the factors that cause weak law enforcement on investment fraud with the object of a binary options case study in Indonesia.

This research is a type of legal research, namely, research based on legal materials (library-based). The legal materials used include primary legal materials and secondary legal materials. The approaches used are the statute approach, the case approach and the comparative approach. The data collection technique used in this research is a literature study. The analysis was carried out qualitatively by using an interactive model.

In 2022, the Indonesian Financial Services Authority (OJK) recorded that the total value of public losses because of investment fraud in Indonesia reached 117.4tn IDR. Weak law enforcement is the reason investment fraud thrives in society. Strategies that can be implemented to prevent investment fraud include early detection of new investment fraud modes through the whistleblower program, mutual legal assistance in criminal matters, criminal restitution and improvement of public financial literacy.

This study examines the problems of law enforcement against investment fraud with a case study of binary options in Indonesia. A law enforcement strategy is built on identifying issues and adopting law enforcement policies against investment fraud in Canada and the USA.

For individuals, the results of this research can be used as reading material to increase their understanding of investment fraud. For the government, the results of this study can be a reference in an effort to eradicate the rise of investment fraud cases more effectively and create a safe digital economic space for investors.

The results of this study are expected to be useful in providing recommendations for strategies to strengthen law enforcement against the problems of investment fraud cases so as to form a conducive investment climate in the sense of being safe, comfortable and profitable.

Legal frameworks to prevent investment fraud are rarely discussed. The rise in binary options cases that occur is an indication of weak law enforcement in the investment sector. Therefore, an in-depth study of law enforcement strategies to prevent investment fraud is needed, with comparative studies in the USA, Canada and Indonesia.

The purpose of this paper is to investigate the insurance market in which moral hazard and insurance fraud coexist. In this situation, this research examines the relationship between moral hazard and insurance fraud. Also, this research shows how the amount of policyholder's effort to lower accident probability changes when insurance firm increases their investment in preventing insurance fraud.

Using a theoretical model containing five‐stages, the author sheds light on how the possibility of insurance fraud affects the amount of policyholder's effort.

The main results of this research are as follows. First, the amount of policyholder's effort is a weakly monotone decreasing function of the insurance firm's investment in preventing insurance fraud. Second, unlike in previous moral hazard models, the policyholder chooses a strictly positive amount of effort even in the full insurance case because the possibility of insurance fraud gives an incentive to realize policyholder's effort. Third, the amount of insurance firm's investment in preventing insurance fraud depends on whether it wants to give an additional incentive to policyholder's effort in exchange for realizing the possibility of insurance fraud.

This is the first paper to investigate the relationship between moral hazard and insurance fraud by using the microeconomic theory.

The purpose of this paper is to explore pathways to fraud perpetrated in accounting-related roles, focusing both on situationally driven attitudes and contextual elements.

Drawing on an anomie-based criminological taxonomy developed by Waring et al. (1995) and Weisburd and Waring (2001), which highlights individual attitudes and situational elements and their connection to illegitimate behaviour, the authors perform a qualitative content analysis of available media and court-reported information on a hand-collected database of 192 accountant frauds in Australia during the period 2001-2011.

The analysis highlights four distinct pathways to accountant fraud – crisis responders, opportunity takers, opportunity seekers and deviance seekers – and the relative distribution of identified cases among these pathways. It also identifies the prevalence of gambling, female offenders, small and medium enterprises as victims, as factors in fraud, as well as the relatively unsophisticated methods in much accountant fraud. In addition, it establishes the importance of situational attitude in moderating inherent character as it relates to fraudulent behaviour and the variable importance of the fraud triangle elements across the pathways to accountant fraud.

This paper provides direct evidence on the nature and pathways to accountant fraud, thus improving understanding of a significant category of occupational fraud. The evidence challenges conventional characterisations of accountant fraud offenders in prior research.

This paper aims to explore the feature and mechanism of a new type of documentary credit fraud that victimizes banks’ issuing letters of credit (L/C), harming neither the importer nor the exporter and seeks to suggest possible measures to tackle it.

This study analyzed 30 cases of documentary credit fraud against banks that were detected by the Korea Customs Service (KCS) and interviewed three key customs investigators to interpret the case reports more accurately and gain a deeper understanding into the mechanisms governing the fraud. This study draws on routine activity theory and crime pattern theory to analyze the opportunity structures of this fraud.

This study found that the importer that engaged in the fraud cases had established a solid business relationship with the exporter and had established trust with the victimized banks; the banks, despite the fact that they had their own risk management systems to screen out unqualified L/C applicants, were defrauded by the offending importers and exporters. Unlike ordinary documentary credit fraud, fraud against banks can be tackled by customs because the offender and the victim typically operate in the same jurisdiction, and this type of fraud often results in trade-based capital flight and money laundering, which is the target of customs enforcement.

As this paper is based on case reports of the KCS, it is inappropriate to generalize the findings or to apply the findings to other contexts. Nevertheless, the opportunity structure elaborated upon in the course of this paper may prove useful in devising measures to tackle this type of fraud elsewhere.

Documentary credit fraud against banks is relatively unexplored, in particular from criminological perspective. This study can contribute to a refinement of the application of opportunity perspective to white-collar crime.