Internal fraud has been attributed as one of the contributing factors for serious banking crises. Given that opportunity is the pre-eminent cause of white-collar crime, this study attempts to measure the relationships between the perceived 'opportunity reduction' and other fraud risk factors with regard to the 'likelihood of fraud occurrence' in financial institutions. For analysis, the study gathered 395 survey responses from South Korean financial sector. The results of logistic regressions of the study highlight that how to operate control mechanisms combining prevention and deterrence measures (the qualitative aspect of internal control), is more important for preventing fraud than the mere existence of many anti-fraud controls. In addition, the study discovers that the employees of the Korean financial institutions view that the risk of management override of controls is a more critical risk than collusion in their organization.

We promote awareness of the features of emails that propose advanced fee fraud schemes. These are commonly known as 419 emails (after Section 419 of the Nigerian Penal Code). We outline the structural features of 419 emails and conduct a preliminary study of their distinctive linguistic features, using word frequency counts and DICTION text analysis software. We find that the incidence of first person singular pronouns is seven times greater in 419 emails than non-419 emails. We suggest elements of a future research agenda that can build on our preliminary results to help reduce advanced fee fraud.

Purpose-This paper reviews an array of psycholinguistic techniques that auditors can deploy to explore written and oral language for signs of deception. The review is drawn upon to propose some elements of a forward research agenda. Design/Methodology/Approach-Relevant literature across several disciplines is identified through key word searches of major bibliographic databases. Findings-The techniques highlighted have considerable potential for use by auditors to identify audit contexts which merit closer audit investigation. However, the techniques need further contextual empirical investigation in audit contexts. Seven specific propositions are presented for empirical testing. Originality/Value-This paper assembles literature on deceptive communication from a wide range of disciplines, and relates it to the audit context. Auditors' attention is directed to potential linguistic signals of fraud risk, and opportunities for future research are suggested. The paper is consciousness-raising, has pedagogic purpose, and suggests critical elements for a future research agenda.