Risk management, top management support, internal audit activities and fraud mitigation

Alazzabi, Waled Younes E.; Mustafa, Hasri; Karage, Ahmed Ibrahim

doi:10.1108/jfc-11-2019-0147

Cited by 28 publications

(19 citation statements)

References 44 publications

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“…This means that the higher the level of organizational risk management is, the higher the organization's fraud awareness is. This finding supports the results of studies conducted by Hess and Cottrell (2016) and Alazzabi et al (2020) who found that preventing fraud and developing fraud awareness took more than 1 year, thus requiring risk management in the organization's operational activities.…”

Section: Discussionsupporting

confidence: 89%

The mediating effect of fraud awareness on the relationship between risk management and integrity system

Sihombing

Soewarno

Agustia

2022

JFC

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Purpose Government institutions in Indonesia have implemented an integrity system as a strategy to prevent fraud and corruption by integrating the risk management and organizational ethics. This integration is important to increase the awareness of fraud in the organization. Based on self-determination theory, this study examines the mediating effect of fraud awareness on risk management and integrity systems. Design/methodology/approach The study was carried out by using a quantitative approach. The participants of the survey were auditors of the inspectorate of Ministries and Government Agencies in Indonesia. The number of respondents was 103 auditors. The hypothesis testing method used the partial least squares structural equation modeling (PLS-SEM) approach. The data were processed by using WarpPls 7.0 software. Findings There are two main results in this study. First, risk management directly affect the integrity of the system. Second, fraud awareness mediates the relationship between risk management and integrity systems. Practical implications The result of this study implicates the policymakers in Ministries and Government Agencies in Indonesia to increase organizational fraud awareness through the involvement of internal audits with risk management. The fraud awareness will greatly improve the performance of the integrity system. Originality/value This is the first study examined fraud awareness of integrity systems and risk management. This study can enrich the literature on internal audits, especially the duties of auditors with risk management.

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Section: Discussionsupporting

confidence: 89%

The mediating effect of fraud awareness on the relationship between risk management and integrity system

Sihombing

Soewarno

Agustia

2022

JFC

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“…For a banking institution fraud risk has become crucial facet of risk management system (Dorogovs et al , 2013; Agarwal and Sharma, 2014; Alazzabi et al , 2020). Dabari and Saidin (2014) and Tandon and Mehra (2017) concluded that effective risk management practices improved the organizational performance.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Sy and Tinker (2019); Fernández-Laviada (2007); and Kabuye et al (2019) further stated that internal auditors preform the detailed investigation on effectiveness of internal control system and risk management practices implemented by the banking institution and provide their assurance on it. Risk management, adequate top management support and internal auditing activities are vital factors for effective fraud management in an organization (Dabari and Saidin, 2014; Kabuye et al , 2019; Alazzabi et al , 2020), e.g. independent internal auditors who have adequate knowledge, dexterity and experience and have enough top-management support, can help the management in a better way in establishing efficacious anti-fraud mechanisms in financial services sector (Kabuye et al , 2017; Alazzabi et al , 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

“…All stakeholders such as depositors, lenders and investors expect accountability and transparency in banking services so in order to sustain the stakeholders’ confidence in banking system, it is vital to safeguard the image of banks from various fraudulent practices. No matter how strong the bank’s control mechanism may be, the fraudsters are so capricious that they find some way or the other to circumvent the internal control mechanism; therefore, more time and adequate resources must be allocated by banks in effective fraud risk management practices to reduce the vulnerability of frauds (Sy and Tinker, 2019; Alazzabi et al , 2020). Although it is not possible for banks to eradicate frauds completely (Sanusi et al , 2015), but a certain level of preparedness can go a long way in countering fraud risk.…”

Section: Introductionmentioning

confidence: 99%

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A systematic literature review on frauds in banking sector

Mangala

Soni

2022

JFC

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Purpose Banking industry peculiarly has become soft target for several pernicious deceptive and fraudulent activities. The purpose of this paper is to systematically review the literature published in past 20 years on bank frauds and present a holistic view on causes and consequences of bank frauds and measures to curtail this menace. Towards the end the paper provides avenues for future research. Design/methodology/approach A systematic literature review approach is used in this study and articles are selected via pre-set inclusion criteria. The literature is mapped on the basis of databases, year of publication, country of study and journal of publication. This paper is based on 70 selected articles published in four prominent databases between 2000 and 2021. Findings This study reveals that frauds in banking industry have become a matter of grave concern for almost all countries across the globe, causing significant financial and non-financial damages to banks, customers, other stakeholders and economy. Numerous factors such as pressure and opportunity are responsible for fraud occurrence. This study further evinced that banking institutions inevitably should have a robust fraud risk management in place to prevent, detect and respond to defalcation. Originality/value To the best of the authors’ knowledge, this is the only paper among 70 selected articles which systematically reviews the literature published in past 20 years and provides a comprehensive view on all aspects related to bank frauds.

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“…39 Within an informational security context, top management support signals the importance of information security to the organization 42 including relevant sanctions to ensure ISP achieving its intended outcomes. 36 In the literature, top management support is confirmed an imperative factor for various organizational initiatives such as the implementation of IS, 43,44 fraud mitigation, 45 and IS security issues. 40,46,47 This support may take the form of guidance or participation in those activities, and more importantly, top management support can secure adequate resources for relevant initiatives to take place.…”

Section: Research Model and Hypothesis Formulationmentioning

confidence: 99%

Hospital Staff’s Adherence to Information Security Policy: A Quest for the Antecedents of Deterrence Variables

Kuo

Talley

Lin

2021

INQUIRY

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Information security has come to the forefront as an organizational priority since information systems are considered as some of the most important assets for achieving competitive advantages. Despite huge capital expenditures devoted to information security, the occurrence of security breaches is still very much on the rise. More studies are thus required to inform organizations with a better insight on how to adequately promote information security. To address this issue, this study investigates important factors influencing hospital staff’s adherence to Information Security Policy (ISP). Deterrence theory is adopted as the theoretical underpinning, in which punishment severity and punishment certainty are recognized as the most significant predictors of ISP adherence. Further, this study attempts to identify the antecedents of punishment severity and punishment certainty by drawing from upper echelon theory and well-acknowledged international standards of IS security practices. A survey approach was used to collect 299 valid responses from a large Taiwanese healthcare system, and hypotheses were tested by applying partial least squares-based structural equation modeling. Our empirical results show that Security Education, Training, and Awareness (SETA) programs, combined with internal auditing effectiveness are significant predictors of punishment severity and punishment certainty, while top management support is not. Further, punishment severity and punishment certainty are significant predictors of hospital staff’s ISP adherence intention. Our study highlights the importance of SETA programs and internal auditing for reinforcing hospital staff’s perceptions on punishment concerning ISP violation, hospitals can thus propose better internal strategies to improve their staff’s ISP compliance intention accordingly.

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Risk management, top management support, internal audit activities and fraud mitigation

Cited by 28 publications

References 44 publications

The mediating effect of fraud awareness on the relationship between risk management and integrity system

The mediating effect of fraud awareness on the relationship between risk management and integrity system

A systematic literature review on frauds in banking sector

Hospital Staff’s Adherence to Information Security Policy: A Quest for the Antecedents of Deterrence Variables

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