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1 – 10 of 188This study aims to investigate the perceived willingness to adopt and use Forensic Accounting and Investigation Standards (FAIS) in Forensic Accounting and Investigation (FAI…
Abstract
Purpose
This study aims to investigate the perceived willingness to adopt and use Forensic Accounting and Investigation Standards (FAIS) in Forensic Accounting and Investigation (FAI) assignments. The study also analyses the usefulness of FAIS in achieving the principle of natural justice (PNJ) concerning fairness.
Design/methodology/approach
The respondents comprised 118 accounting professionals whose online survey responses were analyzed descriptively. This study also uses a 2 × 2 contingency analysis representing two levels of usefulness and fairness.
Findings
The results revealed that FAIS 410 received the highest mean rating while FAIS 240 received the lowest mean rating in willingness to adopt and use FAIS, and most of the standards were related to the PNJ concerning fairness. The study shows the accounting professionals’ readiness to adapt and flourish with the help of these Standards in FAI assignments.
Practical implications
The findings of this study will increase practitioners’ awareness of the usefulness and fairness of FAIS, which will enhance their understanding of the significance of implementing these newly developed standards to harmonize the investigative process in forensic audits. Additionally, the findings may encourage regulators, researchers, accounting bodies and their members to adopt and conduct further FAIS studies that can advance financial crime prevention, detection and investigation knowledge.
Originality/value
This paper substantially contributes to the literature as it is the first to examine the usefulness and fairness of “Forensic Accounting and Investigation Standards” in the context of forensic audits and investigations, which has not been previously explored.
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The primary purpose of this exploratory paper is to propose a novel analytical framework for examining corruption from a behavioral perspective by highlighting multiple issues…
Abstract
Purpose
The primary purpose of this exploratory paper is to propose a novel analytical framework for examining corruption from a behavioral perspective by highlighting multiple issues associated with quantification culture.
Design/methodology/approach
This paper is part of the author’s exploratory study into the complex corruption phenomenon in Indonesia from a variety of viewpoints to obtain a better understanding of its nature and dynamics. By building on previous literature on quantification culture, audit culture and the corruption phenomenon, this paper explores the different issues related to overreliance on numbers and how they may have led to increased corruption, particularly in Indonesia. Using the Fraud Decision Scale framework, this paper also demonstrates how the quantification culture affects the cost-benefit analysis of corruption offenders. To develop the best anticorruption strategy and lay the groundwork for future anticorruption studies, this paper presents a fresh perspective on how to analyze and evaluate the corruption issue.
Findings
The author established that despite the benefits that quantification practices – such as indicators, scores, ratings and rankings – bring to societies and organizations, there is evidence that these practices can have unfavorable effects when used excessively or incorrectly. One of the adverse effects of quantification practices is over-quantification, which manifests as various inappropriate behaviors, including an excessive desire to acquire riches and material belongings. Additionally, the worship of ranks and status derived from quantitative evaluation processes has led many people to prioritize short-term objectives above long-term improvements. Eventually, these will cause organizations to lose productivity and make them susceptible to fraud and corruption. Future studies are needed to determine the most effective approach for mitigating over-quantification issues. In this exploratory paper, the author proposes balancing quantitative practices with qualitative knowledge to gradually alter people’s behavior by broadening their perspectives in perceiving various phenomena in the world, not only by describing and explaining them but also by comprehending their underlying meanings.
Research limitations/implications
This exploratory study is self-funded and relies primarily on documentary analysis to explore the corruption phenomenon in Indonesia. Future studies will benefit from in-depth interviews with former corruption offenders and investigators.
Practical implications
This exploratory paper contributes to the development of a sound corruption prevention approach by presenting a novel analytical framework for examining various behavioral problems linked with quantification culture that may lead to the escalation of corruption.
Originality/value
This study emphasizes the significance of understanding the structure and dynamics of quantification culture and their negative behavioral impacts on people to comprehend the corruption phenomenon better.
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Marziana Madah Marzuki, Wan Zurina Nik Abdul Majid, Hatinah Abu Bakar, Effiezal Aswadi Abdul Wahab and Zuraidah Mohd Sanusi
This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the…
Abstract
Purpose
This paper investigates the relationship between risk management practices and potential fraudulent financial reporting in Malaysia by considering recent regulatory reforms of the Malaysian government on risk management practices.
Design/methodology/approach
The sample of this study was based on 257 firm-year observations during the 2012–2017 period. This study employed panel-least square regressions with period fixed effects.
Findings
This study found a significant association between risk management activities in the disclosure and potential fraudulent financial reporting. Nevertheless, this study found there is insignificant effect of the risk-management committee in reducing potential of fraudulent financial reporting.
Originality/value
This study is a pioneer research that relates firms’ risk management practices with potential fraudulent financial reporting measured by F-score. Thus, this study provides an insight to regulators on the extent of risk-management practices in deterring potential fraudulent financial reporting which can be used as an input for greater enforcement of risk-management regulations.
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This paper aims to explore various cultural and behavioral issues associated with the problem of investment fraud in Indonesia.
Abstract
Purpose
This paper aims to explore various cultural and behavioral issues associated with the problem of investment fraud in Indonesia.
Design/methodology/approach
By examining multiple cases of investment fraud in Indonesia as well as reviewing publicly available government reports, this study highlights several important cultural and behavioral issues associated with the susceptibility of Indonesian financial services consumers to investment fraud to understand better the dynamics of the victimization process. By using multiple cultural and behavioral theories, this study demonstrates how such issues shape the interactions between investment fraudsters and investment fraud victims.
Findings
This study demonstrates that multiple cultural and behavioral factors have created and shaped an environment where fraudsters can exploit people’s behavioral loopholes for their fraudulent schemes. In particular, the high power distance and high collectivism have been identified by this study as contributing to the high level of materialism in the country, which in turn makes people more susceptible to the temptation of get-rich-quick schemes. Investment fraudsters, being students of human behavior, use their behavioral knowledge to devise various means to deceive their victims. They use multiple psychological principles to stimulate target victims “gullibility to make them more vulnerable to fraudulent persuasion. In many cases, even financially literate people are not immune to fraudsters” deceitful messages. This study highlights gullibility production as a foundation for investment fraudsters to devise their means by which victims are manipulated to accept certain beliefs that depart from facts and evidence.
Practical implications
This paper contributes to the innovation in anti-fraud practice by building a better understanding of multiple cultural and behavioral issues associated with investment fraud victimization.
Originality/value
This paper brings a new perspective into the field of anti-fraud to stimulate innovation, in particular in investment fraud prevention.
The primary purpose of this exploratory paper is to propose a novel analytical framework for examining corruption from a behavioral perspective by highlighting multiple issues…
Abstract
Purpose
The primary purpose of this exploratory paper is to propose a novel analytical framework for examining corruption from a behavioral perspective by highlighting multiple issues associated with consumerism.
Design/methodology/approach
This paper examines the relationship between excessive consumption activities and corrupt acts, drawing upon existing literature on corruption, consumerism and consumption, as well as multiple reports and cases of corruption and money laundering in Indonesia. With regard to corruption networks, this paper analyses the associated behavioral patterns and social dynamics by using the Fraud Triangle and the Fraud Elements Triangle frameworks to examine the phenomenon of living beyond one’s means. This paper also addresses the notion of sacredness in the context of consumer activities and how such sacredness plays a role in causing otherwise honest individuals to engage in corrupt acts.
Findings
The author established that corruption represents a complex societal issue that extends across several dimensions of society, encompassing both horizontal and vertical aspects. Consequently, addressing this problem poses significant challenges. Excessive consumption has been identified as one of the various behavioral concerns that are implicated in the widespread occurrence of corruption in many nations. Individuals who partake in excessive consumption play a role in shaping ethical norms that serve to legitimize and rationalize immoral behavior, therefore fostering a society marked by corruption. The act of engaging in excessive consumption is also associated with cases of money laundering offenses that are connected to corruption and several other illicit activities. The lifestyle of corrupt individuals is one of the primary behavioral concerns associated with corruption, as “living beyond means” is the most common behavioral red flag among occupational fraud offenders worldwide. The phenomenon of consumerism may also shape the minds of individuals as if it were an “implicit religion” due to the fact that it may generate human experiences that elicit highly positive emotions and satisfy certain sacredness-associated characteristics. The pursuit of transcendental experiences through the acquisition and consumption of sacred consumption objects may heighten the incentive to commit fraudulent acts such as corruption.
Research limitations/implications
This self-funded exploratory study uses document analysis to examine the corruption phenomenon in Indonesia. Future studies will benefit from in-depth interviews with former offenders and investigators of corruption.
Practical implications
This exploratory study contributes to advancing corruption prevention strategies. It does this by introducing a novel analytical framework that allows for the examination of several behavioral issues associated with consumerism, which have the potential to foster the proliferation of corruption.
Originality/value
This exploratory study highlights the importance of comprehending the intricacies of consumerism, namely, its adverse effects on the proliferation of corruption.
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This study aims to objectively synthesize the volume of accounting literature on financial statement fraud (FSF) using a systematic literature review research method (SLRRM). This…
Abstract
Purpose
This study aims to objectively synthesize the volume of accounting literature on financial statement fraud (FSF) using a systematic literature review research method (SLRRM). This paper analyzes the vast FSF literature based on inclusion and exclusion criteria. These criteria filter articles that are present in the accounting fraud domain and are published in peer-reviewed quality journals based on Australian Business Deans Council (ABDC) journal ranking. Lastly, a reverse search, analyzing the articles' abstracts, further narrows the search to 88 peer-reviewed articles. After examining these 88 articles, the results imply that the current literature is shifting from traditional statistical approaches towards computational methods, specifically machine learning (ML), for predicting and detecting FSF. This evolution of the literature is influenced by the impact of micro and macro variables on FSF and the inadequacy of audit procedures to detect red flags of fraud. The findings also concluded that A* peer-reviewed journals accepted articles that showed a complete picture of performance measures of computational techniques in their results. Therefore, this paper contributes to the literature by providing insights to researchers about why ML articles on fraud do not make it to top accounting journals and which computational techniques are the best algorithms for predicting and detecting FSF.
Design/methodology/approach
This paper chronicles the cluster of narratives surrounding the inadequacy of current accounting and auditing practices in preventing and detecting Financial Statement Fraud. The primary objective of this study is to objectively synthesize the volume of accounting literature on financial statement fraud. More specifically, this study will conduct a systematic literature review (SLR) to examine the evolution of financial statement fraud research and the emergence of new computational techniques to detect fraud in the accounting and finance literature.
Findings
The storyline of this study illustrates how the literature has evolved from conventional fraud detection mechanisms to computational techniques such as artificial intelligence (AI) and machine learning (ML). The findings also concluded that A* peer-reviewed journals accepted articles that showed a complete picture of performance measures of computational techniques in their results. Therefore, this paper contributes to the literature by providing insights to researchers about why ML articles on fraud do not make it to top accounting journals and which computational techniques are the best algorithms for predicting and detecting FSF.
Originality/value
This paper contributes to the literature by providing insights to researchers about why the evolution of accounting fraud literature from traditional statistical methods to machine learning algorithms in fraud detection and prediction.
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According to the Association of Certified Fraud Examiners, financial statement fraud represents the smallest amount of fraud cases but results in the greatest monetary loss. The…
Abstract
Purpose
According to the Association of Certified Fraud Examiners, financial statement fraud represents the smallest amount of fraud cases but results in the greatest monetary loss. The researcher previously investigated the characteristics of financial statement fraud and determined the presence of 16 fraud indicators. The purpose of this study is to establish whether investors and other stakeholders can detect and identify financial statement fraud using these characteristics in an analysis of a company’s annual report.
Design/methodology/approach
This study analyses a financial statement fraud case, using the same techniques that were previously applied, including horizontal, vertical and ratio analysis. These are preferred because stakeholders have relatively easy access to them.
Findings
The findings show several fraud characteristics, with a few additional ones not previously found prevalent. Financial statement fraud thus tends to differ between cases. It is also easier to detect and identify fraud indicators ex post facto.
Originality/value
This study is a practical case showing that financial statement fraud can be detected and identified in the financial statements of companies that commit fraud.
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Zainab Ahmadi, Mahdi Salehi and Mahmoud Rahmani
This study aims to address the relationship between economic complexities (EC) and the green economy (GE) with fraud in the listed companies on the Tehran stock exchange. The…
Abstract
Purpose
This study aims to address the relationship between economic complexities (EC) and the green economy (GE) with fraud in the listed companies on the Tehran stock exchange. The authors study whether EC and GE increase the detection of financial statement fraud.
Design/methodology/approach
The authors used a multiple regression model based on the panel data method and fixed effect model to test hypotheses. The sample includes 1,351 companies listed on the Iranian stock exchange from 2014 to 2021.
Findings
The results show a negative and significant relationship between EC and GE with financial statement fraud.
Originality/value
Since this research is the first to address the mentioned topic in emerging markets, it provides helpful insights for financial statement users, analysts and legal entities. The study fills the literature gap and promotes knowledge regarding its relevant literature.
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Ach Maulidi, Nanang Shonhadji, Fachruzzaman, Rida Perwita Sari, Dian Anita Nuswantara and Rindang Widuri
The purpose of this study is to examine whether female chief financial officers (CFOs) are associated with the occurrences of financial reporting fraud. This study offers new…
Abstract
Purpose
The purpose of this study is to examine whether female chief financial officers (CFOs) are associated with the occurrences of financial reporting fraud. This study offers new theoretical and empirical evidence on whether firms with more female CFOs are more (less) likely to engage in financial reporting fraud.
Design/methodology/approach
This study is based on a sample of US-listed firms from 2011 to 2021. The authors speculate that female CFOs play a weaker role in the occurrences of financial reporting fraud. So, firms with a proportional number of female CFOs should be less likely to commit financial reporting fraud.
Findings
The data provide support for the predictions of this study. This study suggests a negative and significant association between the dummy variables for female CFOs and the occurrences of financial reporting fraud. The authors find that this association is contingent on governance mechanisms [e.g. ownership structure, politically connected CEOs and firms' conditions that do (or do not) invest in a gender-diverse board].
Originality/value
This study offers different perspectives on the impact of female CFOs on the occurrences of financial reporting fraud. The results of this study are distinguishable from prior studies. This study moves the analytical focus from the macro level (gender diversity or female corporate leaders) to the micro level (female CFOs) to understand firms' propensity to commit financial reporting fraud. Additionally, this study is based on factual financial reporting fraud cases, considering the US firms' fraud characteristics.
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Available studies on anticorruption practices in the construction industry are exploratory with a very limited theoretical basis. This paper aims to provide a solid theoretical…
Abstract
Purpose
Available studies on anticorruption practices in the construction industry are exploratory with a very limited theoretical basis. This paper aims to provide a solid theoretical foundation to examine situational factors that influence the corruption intentions of individuals and organizations in the construction industry.
Design/methodology/approach
This paper conducts a systematic literature review to synthesize construction management literature that suggests anticorruption practices. The identified practices are then examined using two theoretical frameworks: the fraud diamond theory and Lange’s corruption control framework.
Findings
The results of this research demonstrate how the four elements of the fraud diamond theory may trigger corrupt behavior in construction projects. The results also highlight conceptual distinctions among different means of corruption controls based on Lange’s corruption control framework. In addition, the findings of this research suggest that anticorruption practices should address (1) the incentives to act corruptly, (2) the normative means of corruption control, (3) the internal means of preventing corruption and (4) the shift in organizational culture.
Originality/value
This paper departs from prior research on corruption in construction projects by (1) identifying a large spectrum of anticorruption practices, (2) presenting a detailed theoretical interpretation of these practices and (3) viewing anticorruption practices as multidimensional constructs, which, in turn, leads to novel ways of examining these practices in construction projects.
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