Search results

This paper aims to evaluate the effects of fraud risk elements and integrity on asset misappropriation in the Royal Malaysian Police (RMP). In addition, this research also examines whether integrity moderates the relationship between fraud risk elements and asset misappropriation.

Data are gathered from the responses of the questionnaires distributed to the RMP. A total of 200 questionnaires were distributed based on simple random selection from five RMP centres in the capital city. Out of 200 questionnaires distributed, only 189 were returned.

The findings indicate that the existence of fraud risk elements significantly affects the incident of asset misappropriation. An interesting finding was made that integrity is negatively related to asset misappropriation. This implies that integrity is an important value in minimising the occurrence of asset misappropriation. The results also indicate that minimising fraud risk elements is crucial in reducing the incident of asset misappropriation.

This present paper contributes to the literature by investigating a commonly proposed but underexplored elements of integrity in mitigating fraud. Incorporating integrity and fraud risk elements simultaneously in a single framework in context of RMP would enhance the understanding and will be able to provide a framework for practitioners on how to mitigate the incident of fraud.

The paper aims at examining the influences of the elements of fraud diamond on the asset misappropriation within the banking industry of Iran. Primary data were collected through 191 survey questionnaires administered among employees of the top three banks in Iran, which own above 60 per cent of market shares in the banking industry of the country.

Primary data were collected through 191 survey questionnaires administered among employees of the top three banks in Iran, which own above 60 per cent of market shares in the banking industry of the country.

Results strongly supported that all four elements of fraud risk significantly influence bank employee asset misappropriation in Iran. To minimize employee fraud, the banking industry should reduce opportunities and employee negative rationalization through strong internal control.

The findings of this study are useful for policymakers, bank managers, industry practitioners and academics to understand and subsequently implement strategies to mitigate asset misappropriation.

Managerial implications, limitations of the study and suggestions for future research are also included in this paper.

The main value of this paper is the determination of the key variables that constitute the fraud diamond theory and its dimensions on the asset misappropriation within the banking industry in Iran.

In recent years, Public Accountability and Integrity have been matters of growing attention, both in the public and private sector, as citizens demand value for money entrusted to the governments through their taxes. In addition, in many countries, after the recent recession, government budgets and corporate returns have been reduced. Many corporate scandals have occasionally become known and have had a great impact on confidence in the market. Even worse, after the pandemic of COVID-19, «bare and exacerbated massive preexisting problems in the world’s economic, social and security order, threatens to push up to 100 million people into extreme poverty in 2020, struck at a time of dwindling trust in representative governance» (UNDP, 2020). The funds of organizations in the private and public sector have been shrinking, whereas the situational pressures of fraud are increased. In this context, Dorris, President and CEO of the ACFE warns for explosion of fraud in the coming years and reminds that during the 2008 economic, companies cut-off, non-revenue generating activities, such as the internal audit and the compliance departments leaving them exposed to fraud. Therefore, organizations have to do more with less. The purpose of this paper is to present the development of the fraud theory on the management’s perspective aiming to contribute to the efficient development of anti-fraud mechanisms

Having identified the fraud theory developed so far, we provide a framework for the fraud risk management.

This paper incorporates cost/benefits considerations, practical considerations and empirical evidence on fraud.

This paper provides valuable information to enable the management, who has the primary responsibility to prevent and detect fraud, to disclaim responsibility by broadening their understanding of fraud theory.

The purpose of this paper is to argue for an integrated explanation of financial fraud. Greater emphasis must be placed on the structural and situational factors that are the elements of fraud risks and fraud.

The paper is based on a review of the literature on the explanation of financial fraud. Both micro- and macro-theoretical explanations of fraud were analysed to allow for a broader picture of the types of individuals that were involved in fraud, the rules governing their conduct and the types of law they broke.

The main reason why people commit fraud is that their crime propensity interacts with the elements present in criminogenic environments. Indeed, because most of the research on structural theories of fraud focuses on general criminality, not much has been done in the area of financial fraud. More research needs to be carried out to excavate the subterranean cluster of narrative on fraud risks and fraud.

To address the future contingency of fraud risks, the paper adopted a similar position of prior accounting research on financial crimes. The structural explanation of fraudulent behaviour considers individuals’ actions to be less the result of individual deviance and more the cause of societal forces. Structural theories take into consideration the individual psychology of the offenders and position it to reflect the various realities – institutional, structural and cultural life – they are caught up in. Future research must endeavour to address these concerns.

The manuscript is among a new stream of literature that addresses the structural elements of financial fraud.

Although corporations exert considerable efforts to uphold ethical standards in their business operations, fraud instances persist as an enduring and formidable challenge within organisations, defying their utmost efforts. The presence of fraud poses a substantial and recurring threat to corporations, leading to significant financial losses on an annual basis. This emphasises the crucial need for a comprehensive understanding of the factors contributing to fraudulent activities and the intricate nature of fraud risk factors inherent in business operations. Therefore, this paper aims to enhance the efficacy of fraud detection and prevention measures through critical analysis and refinement of established fraud theories, drawing upon the existing literature on this subject matter.

This paper offers a comprehensive qualitative analysis of the existing literature, thoroughly reviewing prominent models that aim to elucidate the underlying motivations behind fraudulent behaviour. Moreover, drawing upon the existing theoretical foundation, this study conceptualises a model that enhances the understanding of the crucial factors contributing to fraudulent behaviour.

The study presents new theoretical insights concerning the role of personal integrity in fraudulent decision-making, presenting refined interventions that enhance comprehension of the underlying drivers of fraud occurrences and strategies for prevention. Furthermore, the study reveals a comprehensive three-part approach to improving organisational health through strengthening compliance mechanisms and cultivating an ethical-values-based culture.

The study introduces a novel conceptual framework, the personal ethic-based fraud motivation model, which offers a deeper understanding of the factors and conditions influencing individuals’ propensity to engage in fraudulent activities. Furthermore, this study presents a three Cs strategy that effectively delineates the influential forces that drive individuals to surmount fraud risks.

This paper aims to investigate the disclosure of fraud-related activities in public sector organisations in Australia. Specifically, the study reviews and evaluates the level and nature of fraud control information in annual reports of Commonwealth agencies and bodies.

The study uses a qualitative approach with the aim of expanding the body of empirical literature on disclosure of fraud control information in annual reports. The study further uses the theory of accountability – an essential concept for organisations that exist for public interest.

The results show that there is some prima facie evidence of public accountability. However, these results suggest that current disclosures of fraud-related activities in annual reports are failing to ensure the public is aware of activities used to combat fraud and its implications for the public interest.

The results have important implications for developing a framework for good reporting of fraud control activities.

This research study adds to the limited body of knowledge regarding how public entities discharge their accountability in relation to their fraud control activities.

The purpose of this study is to extend the Fraud Diamond Theory to celebrity Special Purpose Acquisition Companies (SPACs) and investigate their post-Initial Public Offering (IPO) stock market performance.

After obtaining a sample of celebrity SPACs from the Spacresearch.com database, fraud risk characteristics were obtained from Lexis Nexus searches. Buy and hold abnormal returns were calculated for celebrity SPACs versus a small-cap equity benchmark for time intervals after IPO, and multiple regression analysis was performed to examine the relationship between fraud risk features and post-IPO returns.

Celebrity SPACs exhibit Fraud Diamond characteristics and significantly underperform a small-cap stock portfolio on a risk-adjusted basis after IPO.

This study only examines celebrity SPACs that conducted IPOs on the NYSE and NASDAQ/AMEX and does not include those that are traded on the Over the Counter Bulletin Board (OTCBB).

Celebrity endorsement of SPAC vehicles attracts investors who may not be properly informed regarding the risk characteristics of SPACs. Accordingly, investors should be warned that celebrity SPACs underperform a small-cap equity portfolio and exhibit significant elements of fraud risk.

The use of celebrity endorsement as a marketing device to attract investment in SPACs has regulatory implications.

To the best of the authors’ knowledge, this paper is the first to examine the fraud risk characteristics and post-IPO performance of celebrity SPACs.

This paper aims to explore the effectiveness of an artificial neural network (ANN) in predicting fraudulent financial reporting in small market capitalization companies in Malaysia.

Based on the concepts of ANN, a mathematical model was developed to compare non-fraud and fraud companies selected from among small market capitalization companies in Malaysia; the fraud companies had already been charged by the Securities Commission for falsification of financial statements. Ten financial ratios are used as fraud risk indicators to predict fraudulent financial reporting using ANN.

The findings indicate that the proposed ANN methodology outperforms other statistical techniques widely used for predicting fraudulent financial reporting.

The study is one of few to adopt the ANN approach for the prediction of financial reporting fraud.

The purpose of this study is to provide theoretical guidance that enables local governments to deal with occupational fraud.

The quantitative approach is used to examine the efficacy of the Committee of Sponsoring Organisations of the Treadway Commission (COSO) internal control framework in tackling occupational fraud in local government. To achieve the goals, the authors performed a survey of the Indonesian auditor institutions.

It is not appropriate to argue that all types of local government fraud can be deterred by a single internal control. The study suggests that COSO internal controls are not effective for dealing with corruption cases. However, the authors do find the efficacy of those controls are obvious for controlling asset misappropriation and financial statement fraud. This result indicates that if the COSO internal control framework is only designed for routine financial control and asset protection, it significantly and negatively influences its efficacy to deal with occupational fraud. This study has both theoretical and managerial implications, discussed separately.

In the field of prevention, the authors cannot make generalised theories and approaches for dealing with occupational fraud. Whilst previous authors have offered fraud deterrents in terms of internal controls, they have failed to realise the need to understand their effectiveness for particular forms of fraud. This paper sheds light on the effectiveness of internal controls in achieving their goals. This has both practical applications and stimulates theoretical insights.

This study aims to investigate the factors that influence asset misappropriation fraud among police officers in the Internal Security and Public Order (Malay: Keselamatan Dalam Negeri dan Ketenteraman Awam [KDNKA]) Department, Royal Malaysian Police (RMP).

Primary data were collected from a questionnaire-based survey and the data were analysed using descriptive analysis, correlation analysis and multiregression.

The element of pressure was found to have a negative relationship with asset misappropriation fraud. This result shows the uniqueness of the KDNKA Department in the RMP. The other three elements are found to have a significant positive relationship with asset misappropriation fraud.

This study’s findings can aid academicians in gaining a better understanding of the literature surrounding fraud diamond theory and aid the policymakers in recognizing the signs and possibilities of asset misappropriation fraud in public agencies.

To the best of the authors’ knowledge, this is the first study that uses the KDNKA Department which is the second largest department in RMP as a population in fraud study.