Accounting frauds – review of advanced technologies to detect and prevent frauds

Purpose This study aims to trace the impact of corporate governance and its mechanisms in preventing companies from turning to fraudulent financial reporting. Design/methodology/approach For this purpose, using the systematic elimination pattern, the information of 187 listed companies on the Tehran Stock Exchange over six years from 2013 to 2019 were collected, and the hypotheses were examined using a linear regression model. To measure fraudulent financial reporting, the adjusted model of Beneish (1999) was used to evaluate corporate governance. Its mechanisms based on nine corporate governance mechanisms, including board independence, board remuneration, CEO financial expertise, expertise in CEO industry, board financial expertise, board industry expertise, board effort, CEO duality and managerial ownership, have been examined. These mechanisms are calculated as a combined index of corporate governance. Findings The findings indicate that robust corporate governance significantly reduces companies’ intention toward fraudulent financial reporting. In the same way, a negative and significant relationship was observed between each of the nine corporate governance mechanisms, except for board compensation and fraudulent financial reporting. Originality/value This study’s findings provide valuable insight into the importance of strengthening companies to prevent companies’ managers from engaging in fraudulent financial reporting activities. Hence, it is suggested that professional references bodies more seriously follow the rules to dictate to companies for using and empowering their corporate governance.

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“…73‐85). Therefore, there is an urgent need for effective methods to prevent and detect fraud (Segal, 2016, pp. 45‐64).…”

Section: Introductionmentioning

confidence: 99%

Corporate governance and fraudulent financial reporting

Rostami

Rezaei

2021

JFC

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“…Some technologically savvy fraudsters may find a way to divert funds using these payment methods to their personal accounts. Segal (2016) pointed out that the explosion of computer-based resources opened the portal for a new kind of computer-based accounting fraud. A researcher may provide valuable information on how to assist organizations in diminish fraud that may occur in RNPOs.…”

Section: Recommendations For Further Studymentioning

confidence: 99%

Detecting and Deterring Not-for-Profit Organization Accounting Fraud

2021

JAF

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This study contributes to the body of literature about detecting and deterring accounting fraud in not-forprofit organizations. More specifically, the purpose of this qualitative case study was to explore opportunities for not-for-profit and religious not-for-profit organizations to detect and deter accounting fraud. The researchers incorporated data collected from not-for-profit organizations in New Jersey. One finding of this current study validates previous studies and the emphasis on the need for specific and ongoing accounting training. Additional findings confirm the need for enhanced accounting internal controls within not-for-profit organizations. The study results indicate RNPOs with larger budgets, and staff tend to have more reliable internal accounting controls. The authors identify additional implications. Organizations need to employ a CPA or a financial professional, raise fraud awareness, and develop continuous fraud training for key leaders. Finally, RNPOs need to create and articulate their fraud policies.

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“…In an environment where financial fraud is evolving, computers equipped with detection tools with specific knowledge in the field (Zhou and Kapoor, 2011). Computer techniques and data mining software can be used as a mechanism to prevent and detect fraudulent transactions and accounting fraud (Segal, 2016).…”

Section: Detectionmentioning

confidence: 99%

Accounting Function as Management Performance Tool in Organizations

Ugoani¹

2020

BMER

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Accounting function aims at providing accurate and sufficient accounting information to facilitate proper financial reporting and management performance. Accounting information is usually in the form of periodic or annual financial statements which are products of costing, financial and management accounting prepared for the benefit of a number of external interest groups. Accounting has its roots in the stewardship approach and as a management performance tool to guide the agent and the principal over the exact status of the going concern. Accounting function also involves financial statement analysis, interpreting the accounts by computing and evaluating ratios which relate pairs of financial information or items with one another. This analysis of ratios can be cross-sectional comparing the results of one company with another or trend. In doing so close attention is usually paid to profitability ratio to help keep pace with effective management performance. The exploratory research design was adopted for the study and result showed positive correlation between accounting function and management performance. The study was not exhaustive, therefore, further study should examine the relationship between audit failure and business failure as a matter of finding a solution to the problem. It was recommended that management should always carefully study audit reports to enhance decision making and management performance.

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Accounting frauds – review of advanced technologies to detect and prevent frauds

Cited by 13 publications

References 15 publications

Corporate governance and fraudulent financial reporting

Corporate governance and fraudulent financial reporting

Detecting and Deterring Not-for-Profit Organization Accounting Fraud

Accounting Function as Management Performance Tool in Organizations

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