Covid-19 Pandemic and Fraudulent Actions in the Financial Statements: The Case of Hotel Companies in the Republic of Serbia

Abstract

The quality of information presented in the financial statements of companies may be impaired due to fraudulent activities. One of the frequently used instruments that indicates that fraud has been committed in the financial statements is the Beneish M-score model. The purpose of the research is to examine the exposure of hotel companies in the Republic of Serbia to the risk of fraud in financial statements, as well as to determine whether there has been a change in that risk due to the COVID-19 pandemic. The research was conducted on a sample of 100 randomly selected hotel companies, and their financial reports for 2019 and 2020 were observed. There was a high risk of fraud based on the recognition of costs of sales, management and administration, and borrowing in both observed years, as well as a high risk of fraud based on the recognition of income and gross margin index in 2020. Further, it was determined that in the year of the COVID-19 pandemic, there was an increase in the risk of fraud in the financial statements based on the gross margin index and recognition of selling, management and administration costs. Microenterprises are exposed to a higher risk of fraud based on the recognition of costs of sales, management and administration compared to medium-sized ones. Limited liability companies are more exposed to risk based on the recognition of sales revenue, accrual item and total risk (measured by the 8-variable model) compared to joint-stock companies. On the other hand, joint-stock companies are more exposed to the risk of fraud based on gross margin and general risk of fraud (measured by the 5-variable model) compared to limited liability companies.

The Influence of the Covid-19 Pandemic on the Financial Performance of Listed Retail Firms in South Africa

“…The world continues to adjust to the effects of the COVID-19 pandemic, which has resulted in tremendous economic losses for thousands of businesses worldwide as a consequence of government directives to shut down their operations (Tashanova et al, 2020). In addition to a significant loss of life, the COVID-19 pandemic resulted in increased joblessness, significant financial liabilities, and compromised financial market efficiency (Al-Awachi, Alsaifi, Al-Awadhi & Alhammadi, 2020;Milašinović, Jovković & Dragičević, 2022).…”

Pengaruh Mekanisme Good Corporate Governance dan Periode Terjadi Covid19 Terhadap Kecurangan Laporan Keuangan Perbankan Indonesia

“…Pada periode terjadinya pandemi COVID-19, banyak perusahaan mengalami tekanan ekonomi yang signifikan, yang dapat mengarah pada peningkatan risiko terjadinya kecurangan dalam pelaporan keuangan (Milašinović et al, 2022). Pada periode krisis ekonomi akibat COVID-19, terdapat beberapa faktor yang dapat mempengaruhi terjadinya kecurangan laporan keuangan.…”

“…Selain itu, ada juga faktor internal perusahaan, seperti kurangnya pengawasan dan tindakan korupsi, yang dapat meningkatkan risiko kecurangan laporan keuangan. Peningkatan kecurangan laporan keuangan dalam periode covid19 terjadi karena moral karyawan melemah karena bekerja jarak jauh, pemecatan, dan kurangnya kontrol juga berkontribusi terhadap peningkatan risiko penipuan (Milašinović et al, 2022).…”

“…Adanya ketidakpastian bisnis dan keberlanjutan ekonomi selama masa covid19 mungkin akan mendorong seseorang untuk melakukan kecurangan laporan keuangan (Milašinović et al, 2022). Pandemi covid19 dapat meningkatkan kemungkinan terjadinya kecurangan laporan keuangan (Milašinović et al, 2022). Ketika dihadapkan dengan tekanan, manajemen perusahaan bisa tergoda untuk memanipulasi informasi akuntansi (Šušak, 2020).…”

Warnings of financial fraud in travel agencies in the Republic of Serbia during the COVID-19 pandemic

“…These models have been widely employed in recent research, both in developed and developing countries (e.g. Atik Yildirim & Kovačević, 2022;Ebaid, 2023;Kukreja et al, 2020;MacCarthy, 2017;Suffian et al, 2022), Serbia being no exception (Dimitrijević & Danilović, 2017;Dimitrijević et al, 2018;Knežević et al, 2021;Milašinović et al, 2022) and even in the tourism and hospitality industry (Milašinović et al, 2022).…”