Search results

1 – 10 of 954
To view the access options for this content please click here
Article
Publication date: 21 June 2013

Dan‐Bee Song, Ho‐Young Lee and Eun‐Jung Cho

The purpose of this paper is to examine whether earnings management is related to incidence of fraud and the amount of misappropriated assets. By examining the research…

Downloads
2935

Abstract

Purpose

The purpose of this paper is to examine whether earnings management is related to incidence of fraud and the amount of misappropriated assets. By examining the research question, this study seeks to improve our understanding of using the accrual basis of accounting in identifying the misappropriation of assets.

Design/methodology/approach

This study analyzes 173 sample firms that announced asset misappropriation in the period from 2006 to 2010 in Korea. The study utilizes logistic and linear regressions to test the hypothetical relations set up in the study using discretionary accruals as a proxy of the earnings management. Additionally, the authors performed the robustness test using estimated accruals as a supplementary proxy of the earnings management.

Findings

The authors find that misappropriation of assets has a significant positive association with discretionary accruals. Interestingly, this relationship only holds for firms with negative discretionary accruals. The results suggest that the accrual basis of accounting provides a clue towards uncovering management's misappropriation of assets and thus, plays an important role in reducing existing information asymmetry.

Practical implications

The authors' findings would assist practitioners in detecting asset misappropriation through financial reporting quality and investors and auditors should be more alert to negative discretionary accruals.

Originality/value

There are some studies that examine asset misappropriation. However, most of them are focused on the relation between asset misappropriation and corporate governance. To the best of the authors' knowledge, this is the first study that examines the association between financial reporting quality (i.e. discretionary accruals) and asset misappropriation. The authors' findings provide evidence of the usefulness of accrual basis of accounting in detecting fraud and enhance the understanding of income‐decreasing earnings management.

Details

Managerial Auditing Journal, vol. 28 no. 6
Type: Research Article
ISSN: 0268-6902

Keywords

To view the access options for this content please click here
Article
Publication date: 23 March 2010

Sameer T. Mustafa and Nourhene Ben Youssef

The purpose of this paper is to investigate the relationship between the financial expertise of the audit committee (AC) and the incidence of misappropriation of assets in…

Downloads
3936

Abstract

Purpose

The purpose of this paper is to investigate the relationship between the financial expertise of the audit committee (AC) and the incidence of misappropriation of assets in publicly held companies in the USA.

Design/methodology/approach

The sample consists of 28 publicly held companies in the USA experiencing misappropriation of assets from 1987 to 1998, as well as 28 control companies matched according to size, industry, and time period. The effectiveness of the AC's financial expertise in reducing the occurrence of misappropriation of assets is examined by logistic models using two specific types of financial expertise: accounting and non‐accounting financial expertise.

Findings

The results support the notion that an independent AC member is only effective in reducing the occurrence of misappropriation of assets in publicly held companies if he/she is also a financial expert.

Research limitations/implications

The paper contributes to the debate on the appropriate definition of “financial expert” and the efficacy of the financial expertise of AC members – as defined by the Sarbanes‐Oxley legislation – in reducing the incidence of misappropriation of assets in publicly held companies in the USA. The paper includes only 28 cases of misappropriation of assets by employees involving collusion with an outsider, as discovered and reported in the news (i.e. newsworthy cases).

Originality/value

While previous studies have drawn attention to the relationship between AC independence and misappropriation of assets, there is no empirical evidence to support or to refute the hypothesis that financial expertise has an impact on the occurrence of misappropriation of assets. This paper is the first to examine the association between the effectiveness of the AC and the occurrence of misappropriation of assets by testing the interaction between AC members' financial expertise and their independence.

Details

Managerial Auditing Journal, vol. 25 no. 3
Type: Research Article
ISSN: 0268-6902

Keywords

To view the access options for this content please click here
Article
Publication date: 10 June 2020

Theodora Aba Abekah Koomson, Godfred Matthew Yaw Owusu, Rita Amoah Bekoe and Maureen Oquaye

This paper aims to investigate the prevalence of asset misappropriation at the workplace and examines the dominant factors that influence individuals to misappropriate…

Abstract

Purpose

This paper aims to investigate the prevalence of asset misappropriation at the workplace and examines the dominant factors that influence individuals to misappropriate assets at the workplace. Relying on the most recent theory on fraud (the stimulus/pressure, capability, opportunity, rationalization and ego (S.C.O.R.E. model) as the theoretical basis, the study examines the effect of pressure, rationalization, capability, opportunity/strength of internal control system and ego on asset misappropriation at the workplace while controlling for the effect of ethical values.

Design/methodology/approach

A total of 883 valid responses from individuals working in various organizations in Ghana were collected by means of a self-administered questionnaire. The hypothesized relationships of the study were tested by means of a structural model analysis using the partial least square based structural equation modelling technique.

Findings

Results from the structural model analysis demonstrate that individuals misappropriate assets at their workplace due to pressures they face, their ability to rationalize their actions as not wrong, their capabilities and their egos. The results, however, indicate that the extent to which an individual will misappropriate asset depends, to a large extent, on the person’s perception of the strength of internal control mechanisms at the workplace. The findings of the study make significant contributions to the fraud discourse.

Originality/value

Theoretically, the study is among the first to provide empirical support for the applicability of the S.C.O.R.E. model in the fraud literature. Again, this study extends knowledge on occupational fraud literature by examining an area that has received the least research attention: asset misappropriation. The study also highlights the important role of internal controls in reducing the occurrence of asset misappropriation at the workplace.

Details

Journal of Financial Crime, vol. 27 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 2019

Soheil Kazemian, Jamaliah Said, Elham Hady Nia and Hamidreza Vakilifard

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…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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

Originality/value

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.

Details

Journal of Financial Crime, vol. 26 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Article
Publication date: 2 May 2017

Haniza Hanim Mustafa Bakri, Norazida Mohamed and Jamaliah Said

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…

Downloads
1755

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Originality/value

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.

Details

Journal of Financial Crime, vol. 24 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

To view the access options for this content please click here
Book part
Publication date: 9 October 2020

Halil Kiymaz

Abstract

Details

Corporate Fraud Exposed
Type: Book
ISBN: 978-1-78973-418-8

To view the access options for this content please click here
Article
Publication date: 6 June 2018

Jamaliah Said, Md. Mahmudul Alam, Zulyanti Abdul Karim and Razana Juhaida Johari

The purpose of this paper is to conduct an empirical analysis of the factors that determine the occupational fraud behavior.

Downloads
1597

Abstract

Purpose

The purpose of this paper is to conduct an empirical analysis of the factors that determine the occupational fraud behavior.

Design/methodology/approach

This study utilizes primary data collected by a questionnaire-based survey on 186 police officials of Malaysia including Sabah and Sarawak. Data are analyzed using descriptive statistics, factor analysis, and cross-sectional regression.

Findings

The results derived in the study showed a statistically significant positive relationship between three basic variables of the fraud theory – pressure, opportunity, and rationalization with asset misappropriation. Moreover, this study revealed that religiosity is statistically significantly and negatively correlated to asset misappropriation. Therefore, the higher religiosity of an individual correlates with the lower probability involve in asset misappropriation.

Practical implications

The findings will help Anti-Corruption Commission, Enforcement Agency of Integrity Commission, Police Department, and relevant agencies from Malaysia and other countries to design policies for reducing cases of fraudulent behavior.

Originality/value

This study is an original work based on the primary data collection.

Details

Journal of Criminological Research, Policy and Practice, vol. 4 no. 2
Type: Research Article
ISSN: 2056-3841

Keywords

Content available
Book part
Publication date: 23 July 2020

Eberhard Feess and Yuriy Timofeyev

Auditors use behavioral red flags (BRFs) to examine which individuals are more prone to unwarranted behavior such as corruption and asset misappropriation. Using a rich…

Abstract

Auditors use behavioral red flags (BRFs) to examine which individuals are more prone to unwarranted behavior such as corruption and asset misappropriation. Using a rich data set from the Association of Certified Fraud Examiners (ACFE), we analyze the impact of BRFs on loss sizes from asset misappropriation. We control for antifraud mechanisms established at the company level and other factors both at the individual and the firm level. Performing an exploratory factor analysis yields six factors for BRFs which capture the principal perpetrator's situation both at the private level and the workplace. A general wheeler-dealer attitude and financial distress significantly increase loss sizes. By contrast, we find no evidence that nonmonetary private problems lead to higher losses.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-83867-402-1

Keywords

To view the access options for this content please click here
Article
Publication date: 6 July 2015

Grace Mui and Jennifer Mailley

– This paper aims to propose the application of the Crime Triangle of Routine Activity Theory to fraud events as a complement to the universally accepted Fraud Triangle.

Downloads
3546

Abstract

Purpose

This paper aims to propose the application of the Crime Triangle of Routine Activity Theory to fraud events as a complement to the universally accepted Fraud Triangle.

Design/methodology/approach

The application of the Crime Triangle is illustrated using scenarios of asset misappropriations by type of perpetrator: external perpetrator, employee, management and the board and its governing bodies.

Findings

The Crime Triangle complements the Fraud Triangle’s perpetrator-centric focus by examining the environment where fraud occurs and the relevant parties that play their role in preventing fraud or not playing their role, and thus, allowing the occurrence of fraud. Applying both triangles to a fraud event provides a comprehensive view of the fraud event.

Research limitations/implications

The scenarios are limited to asset misappropriations with one perpetrator. Future research can apply both triangles to different types of fraud and cases where perpetrators collude to commit fraud.

Practical implications

This paper maps the Crime Triangle to the Fraud Triangle to provide forensic accounting practitioners and researchers with a comprehensive perspective of a fraud event. This comprehensive perspective of fraud is the starting point to designing fraud risk management strategies that address both the perpetrator and the environment where the fraud event occurs.

Originality/value

This paper is the first to propose the application of the established Crime Triangle environmental criminology theory as a complement to the Fraud Triangle to obtain a comprehensive perspective of a fraud event.

Details

Accounting Research Journal, vol. 28 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

To view the access options for this content please click here
Article
Publication date: 2 July 2018

Theresa Hilliard and Presha E. Neidermeyer

Changing workplace demographics reflect a rising number of women in the traditionally male-dominated field of business. The purpose of this study is to investigate how…

Abstract

Purpose

Changing workplace demographics reflect a rising number of women in the traditionally male-dominated field of business. The purpose of this study is to investigate how upwardly mobile women may impact the commission and type of white-collar crime, contributing to the scarce literature on gender distinctions in criminal behavior while comparing criminal trends globally. Women’s increased representation in positions of power in business provides them with increased fraud opportunities prompting the authors to ask: in their areas of opportunity, do women and men commit the same types of white-collar crime and at the same rates, and how does this phenomena vary globally?

Design/methodology/approach

Using a database from the Institute for Fraud Prevention, 5,441 fraud cases are examined from 93 nations for the annual periods from 2002 until 2011. Ordinal logistic regression methods are used to test for differences in gendered criminal behavior by fraud offense type controlling for age, position, education, compensation level and country context.

Findings

Internationally, results from the study indicate that female fraudsters are three times more likely than male fraudsters to commission crimes of asset misappropriation in the workplace. Upon further investigation, stratifying the data by geographical region, findings from the study demonstrate that female fraudsters are more likely than male fraudsters to commit asset misappropriation in the following geographical regions: Africa (three times as likely), Asia (twice as likely), Canada (three times as likely), China (five times as likely), Europe (twice as likely), the Middle East (four times as likely), Oceania (four times as likely), the United Kingdom (eight times as likely) and the United States of America (twice as likely).

Originality/value

Evidence from this study should be of importance to multinational enterprises, auditors and fraud examiners, as asset misappropriation constitutes 87 per cent of all fraud cases globally. Further, these findings prompt the need for researchers to develop this area of research.

Details

Journal of Financial Crime, vol. 25 no. 3
Type: Research Article
ISSN: 1359-0790

Keywords

1 – 10 of 954