The study aims to explore specific motivations, rationalizations and opportunities that are involved in the occurrences of both employee and management fraud in the…
The study aims to explore specific motivations, rationalizations and opportunities that are involved in the occurrences of both employee and management fraud in the context of an emerging African country, Tanzania. It builds and extends from the fraud triangle theory.
A survey was developed and administered to 114 participants who had witnessed, had examined or had been involved in fraud resolutions. The participants included fraud examiners, business managers and owners, victims, auditors, lawyers, and law enforcement agents. The data collected were analysed using descriptive analysis, principal component analysis and correlation analysis.
The results revealed six motivation factors that incentivize employees and managers to engage in fraudulent behaviours. These are business financial strain, social incentives and pressure, greed, operating problems, internal pressures and malevolent work environment. In addition, fraudsters rationalized their behaviour through five significant neutralization techniques identified as social weighting, transferring of blame, denial of injury, attitude and prior fraud history. Lastly, victim organisations were identified to have three main fraud opportunities: poor control environment, inadequate control activities and circumstances that allowed collusive behaviour among fraudsters.
While the study attempted to explore the motivations, opportunities and rationalizations from the perspectives of the fraud-fighting professionals and witnesses, their views and suggestions might be different from the actual known fraudsters or incarcerated individuals.
Business organisations, fraud-fighting professionals and general community must understand the factors behind fraud occurrences, so proper measures may be taken to limit the frequency and amount of fraud losses.
Creation of public awareness and dialogue necessary for the prevention, fighting and deterrence against all forms of fraud.
Despite the occurrences of many scams in both public and private sectors, limited studies exist as to the triggers behind fraud occurrences in the context of the developing countries and whether these triggers are the same as in other contexts. This study is an attempt to fill this gap.
– The purpose of this paper is to explore the contribution of external auditing to accountability in the Tanzanian local government authorities (LGAs).
The purpose of this paper is to explore the contribution of external auditing to accountability in the Tanzanian local government authorities (LGAs).
This paper uses content analysis of the external audit reports of the LGAs for the past ten years. Corroborative evidence was gathered through interviews with external auditors, councillors, Parliamentary Committee members and selected internal auditors of the LGAs.
The study finds that external auditing had marginally contributed to the enhancement of accountability within the LGAs. This is mainly attributed to the limited scope and failure of the responsible officials to address audit recommendations. In the light of agency theory, the findings suggest that external auditing has not sufficiently enabled the stakeholders to hold LGAs’ officials accountable.
The findings indicate that external auditing can enhance accountability when the scope is widened to provide relevant information and also when audit recommendations are implemented by responsible officials.
Most studies of external auditing and accountability have focussed on the developed countries; this is one of the few papers which explores the phenomenon in the context of emerging economies.
This paper examines accounting practices and legitimacy in Tanzanian Local Government Authorities (LGAs).
It uses data from multiple sources, including interviews, observations and documents, to provide theoretical and practical understanding on how accounting has been practiced and the conditions which sustain its undertaking. It applies a grounded theory method to develop a theory systematically from the raw data.
The principal research findings from the data concern the central phenomenon of ‘manipulating legitimacy’. This involved the purposeful and deliberate use of accounting techniques to influence and control (and sometimes even to falsify) the perceived reasonableness of the Councils’ operations. The paper revealed that the effective operations of the Tanzanian LGAs were highly constrained by their context. This had forced the LGAs’ officials to use important accounting practices such as budgeting, financial reporting, auditing and performance measurement, to manipulate the organisational legitimacy, a process which ensured the availability of resources to both LGAs and the individual officials.
The main limitation of the research is that the data was collected from a limited number of local authorities in just one developing country. It is hoped that future research in other developing countries will be undertaken to broaden and deepen our understanding.
The paper identifies the importance of manipulating legitimacy in understanding accounting practices in local government.