Fraud Risk Factor Of The Fraud Triangle Assessing The Likelihood Of Fraudulent Financial Reporting

Lou, Yung-I; Wang, Ming-Long

doi:10.19030/jber.v7i2.2262

Cited by 118 publications

(178 citation statements)

References 59 publications

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“…In the past, much opportunity is possible for employees to commit white collar crimes if internal control of the management is low (Kassem & Higson, 2012;Wolfe & Hermanson, 2004). Previous studies (Dinapoli, 2008;Omar & Din, 2010;Lou &Wang, 2011, andDellaportas, 2013) have indicated that various elements, such as unclear separation of roles and responsibilities, poor documentation on policies, procedures and guidelines, insufficient physical controls by security guards, entering the transaction in an untimely manner, unrestricted access to corporate check books, and insecure control of cash boxes, present numerous opportunities for fraud to occur within the banking sector. Thus, management should emphasize on policy implementation and strengthen the power of internal control.…”

Section: Discussionmentioning

confidence: 99%

Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

Said¹,

Alam²,

Ramli³

et al. 2017

Journal of International Studies

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Abstract. This study attempts to integrate ethical values into the fraud triangle theory in the context of Malaysian banking industry. Primary data were collected through the survey of 108 questionnaires administered to the employees of the top three largest banks in Malaysia. The findings revealed that ethical values were negatively related to employee fraud, and two elements of fraud triangle theory, namely, opportunity and rationalization, were positively related to employee fraud. This implies that high ethical value is crucial to mitigate employee fraud. To minimize employee fraud, the banking industry should reduce opportunities and employee negative rationalization through strong internal control. This study contributes to literature on the occurrences of employee fraud, which is not widely discussed, especially in the context of the banking industry in developing countries.

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Section: Discussionmentioning

confidence: 99%

Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

Said¹,

Alam²,

Ramli³

et al. 2017

Journal of International Studies

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show abstract

“…First, Financial Target, done by (Ansar, 2012;Fimanaya and Syafruddin, 2014;Lou and Wang, 2009;Rahmanti and Daljono, 2013) where their research results showed the significant effect towards accounting fraud. Second, ineffective monitoring, done by (Antonia, 2008;Skousen, Smith and Wright, 2009) their research results showed the significant effect towards accounting fraud.…”

Section: Introductionmentioning

confidence: 99%

A pilot study of corporate governance and accounting fraud: The fraud diamond model

Pamungkas¹,

Ghozali²,

Achmad³

2018

JBRMR

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“…Lou and Wang (2009) found that complex transactions are accompanied by a high inherent risk due to the involvement of a high degree of management judgment and subjectivity.…”

Section: Independent Variablesmentioning

confidence: 99%

“…ese studies include those that investigate the probability of occurrence of accounting and corporate fraud, such as those by Beasley (1996), Brazel, Jones, andZimbelman (2009), Crutcheley, Jensen andMarshall (2007), Erickson, Halon and Maydew (2006), Lou and Wang (2009), Troy, Smith, and Domino (2011), and Wang et al (2010).…”

Section: Introductionmentioning

confidence: 99%

“…Cressey's fraud triangle (1953) has been used both by the literature and in accounts auditing practice to investigate the occurrence of accounting and corporate fraud. In the literature, the studies by Brazel et al (2009), Lou andWang (2009), andTroy et al (2011) stand out, which manage to elaborate econometric models based on Cressey's triangle (1953) to detect fraud. In practical terms, Cressey' s hypothesis (1953) has been used by standardizing organizations as a tool for detecting fraud (Higson & Kassem, 2013) It bears mentioning that Brazilian studies on corporate fraud are still in their infancy (Murcia & Borba, 2005;Silva, 2007).…”

Section: Introductionmentioning

confidence: 99%

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The Cressey hypothesis (1953) and an investigation into the occurrence of corporate fraud: an empirical analysis conducted in Brazilian banking institutions

Machado

Gartner

2017

Rev. contab. finanç.

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ABSTRACTis article lls a technical-scienti c gap that currently exists in the Brazilian literature on corporative fraud, by combining the theoretical framework of agency theory, of criminology, and of the economics of crime. In addition, it focuses on a sector that is usually excluded from analyses due to its speci c characteristics and shows the application of multinomial logit panel data regression with random e ects, which is rarely used in studies in the area of accounting. e aim of this study is to investigate the occurrence of corporative fraud, as well as cases of fraud in Brazilian banking institutions, by using detection variables related to the Cressey fraud triangle. Research into fraud and methods of detecting fraud has grown in management literature, especially a er the occurrence of various corporative scandals in the 1990s. Although regulatory agencies have increased their investments in monitoring and control, fraud investigations and convictions are still common in the day-to-day administration of banks, as can be seen in the Brazilian Central Bank and the National Financial System Resource Council's databases of punitive proceedings. We believe that this article will have a positive impact in the area of accounting sciences, since it involves corporative fraud in a multidisciplinary form and because it provides the incentive to use a quantitative tool that can help increase the development of similar studies in the area. is study tested the theory that the dimensions of the fraud triangle condition the occurrence of corporative fraud in Brazilian banking institutions. irtytwo representative variables of corporative fraud were identi ed in the theoretical-empirical review, which were reduced to seven latent variables by the principal component analysis. Finally, the seven factors formed the independent variables in the multinomial logit models used in the hypothesis tests, which presented promising results.

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Fraud Risk Factor Of The Fraud Triangle Assessing The Likelihood Of Fraudulent Financial Reporting

Abstract: ABSTRACT

Cited by 118 publications

References 59 publications

Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

A pilot study of corporate governance and accounting fraud: The fraud diamond model

The Cressey hypothesis (1953) and an investigation into the occurrence of corporate fraud: an empirical analysis conducted in Brazilian banking institutions

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