The effect of intellectual capital on fraud in financial statements

Lotfi, Afsaneh; Salehi, Mahdi; Dashtbayaz, Mahmoud Lari

doi:10.1108/tqm-11-2020-0257

Cited by 35 publications

(38 citation statements)

References 91 publications

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“…Verhoef and Broekhuizen [1] suggest that accompanying traditional financial metrics to profitability aspects like revenues and incomes, the other variables such as the number of users or number of customers should be considered to present the digital metrics of digital firms. To the marketability aspect, the measurement of intangible assets could be enhanced by the concept of intellectual while these two are discussed and used interchangeably [49,94,95]. So, future works with data availability could consider these points to improve the evaluation model.…”

Section: Discussionmentioning

confidence: 99%

[Retracted] Evaluation Model and Decision Analysis of Digital Firms Ranked in Forbes’ Top Companies

Kao

Dinh²,

Nguyen

2022

Discrete Dynamics in Nature and Society

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This study evaluates the profitability and marketability efficiencies of digital firms ranked in Forbes’ list of top companies by using a two-stage network data envelopment analysis (DEA) model with multiplicative efficiency aggregation under the second-order cone programming (SOCP) and examines the respective impacts of the 1995–2001 dot-com bubble and the 2007–2009 global financial crisis on the companies’ efficiencies by applying impulse response function (IRF) analysis. The data of our 49 sampled companies are derived from the Compustat database. The covered period is 1999–2018. These results present the stable and increasing improvement of profitability and marketability efficiencies; in addition, two crisis events have no significant impact on the performance of digital firms. This research is supposed to offer a reasonable and objective evaluation model to measure the performance of digital firms, providing the managers and investors a reference for making their decision.

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Section: Discussionmentioning

confidence: 99%

[Retracted] Evaluation Model and Decision Analysis of Digital Firms Ranked in Forbes’ Top Companies

Kao

Dinh²,

Nguyen

2022

Discrete Dynamics in Nature and Society

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“…Alzoubi and Selamat (2012) showed that companies with effective board characteristics (size, independence, expertise and the number of meetings) and an effective audit committee are inversely related to earnings management. Lotfi et al (2021) found a negative and significant relationship between intellectual capital and fraud in financial statements. Lari found that the relationship between internal control weakness and opinion type is significantly different in fraudulent and nonfraudulent firms.…”

Section: Theoretical Bases and Literature Reviewmentioning

confidence: 98%

Corporate governance and fraudulent financial reporting

Rostami

Rezaei

2021

JFC

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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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“…At the microlevel, the prediction of fraud stems from the insight that most frauds have common features (Beneish and Vorst, 2020). Therefore, fraud as a critical factor in the financial field poses a serious threat to the public trust in financial information and the financial reporting process, resulting in high costs for various stakeholders (Lotfi et al, 2022). Recently, professional associations have attempted to find solutions to examine and detect financial statement fraud.…”

Section: Risk Management and Firm Performance In Fraudulent And Non-f...mentioning

confidence: 99%

The Impact of Enterprise Risk Management on Firm Performance by Fraud Detection in Iran, Iraq, And Saudi Arabia

2022

Central European Management Journal

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The current study investigates the effect of enterprise risk management (ERM) on the firm performance of capital markets of developing countries, including Iran, Saudi Arabia, and Iraq. Design/methodology/approach: To obtain the main objective of the study, the economic contexts of three neighbouring and developing countries of Iran, Iraq, and Saudi Arabia were investigated from 2012 to 2019. Panel regression analysis was used to test the hypotheses. Findings: The findings indicated that ERM could increase return on assets and decrease the total assets of Iranian firms while increasing the total assets of Iraqi firms. In addition, the obtained results showed that ERM reduced sales growth and increased net profit margins in Saudi Arabian firms. Regarding the fraudulent firms, it was found that ERM increased the return on assets in Iranian firms and sales growth in Saudi Arabian firms while decreasing the sales growth in Iraqi firms. It was also revealed that total asset turnover increased in non-fraudulent Iranian firms but decreased in their Iraqi counterparts. The current study's findings provided strong evidence for the financial conditions and performance of firms operating in developing countries. Accordingly, it can be concluded that ERM efficiency and firm performance can be affected by the nature and structure of that firm, as the findings of these three economic contexts were fundamentally different. Originality/value: The present study enriched the literature on ERM as one of the critical factors affecting firm performance in emerging economies with different capital market rules. In addition, the literature and obtained results show the extent of fraud and its impact on the performance of firms in developing countries.

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The effect of intellectual capital on fraud in financial statements

Cited by 35 publications

References 91 publications

[Retracted] Evaluation Model and Decision Analysis of Digital Firms Ranked in Forbes’ Top Companies

[Retracted] Evaluation Model and Decision Analysis of Digital Firms Ranked in Forbes’ Top Companies

Corporate governance and fraudulent financial reporting

The Impact of Enterprise Risk Management on Firm Performance by Fraud Detection in Iran, Iraq, And Saudi Arabia

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