The Relative Importance of Management Fraud Risk Factors

Apostolou, Barbara; Hassell, John M.; Webber, Sally A.; Sumners, Glenn E.

doi:10.2308/bria.2001.13.1.1

Cited by 86 publications

(62 citation statements)

References 6 publications

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“…Other studies based on USA data include that of Apostolou et al (2001), who surveyed the views of auditors on the relative importance of a number of fraud risk factors. They found that fraud risk factors involving management characteristics and influence over the control environment were significantly more important than factors related to financial stability and industry conditions.…”

Section: Most Important Fraud Risk Factorsmentioning

confidence: 99%

Fraud Risk Factors and Audit Programme Modifications: Evidence from Jordan

Abdullatif¹

2013

AABFJ

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This study explores how audit firms in Jordan deal with the presence of fraud risk factors in audit clients. In doing so, the study seeks to explore which fraud risk factors are more important to Jordanian auditors, and how Jordanian auditors consider modifying their audit programmes when fraud risk factors are present in clients. The study uses a structured questionnaire that was administered to senior level auditors in the largest Jordanian audit firms. The findings show that almost all of the 20 fraud risk factors included in the questionnaire were only slightly important (if not unimportant), a finding that is arguably alarming. The perceived importance of modifying the audit programme in the presence of each fraud risk factor was related to the perceived importance of the fraud risk factor itself. However, changes in the nature and extent of audit procedures were more important than changes in the timing of the procedures or the members of the audit team. The most important fraud risk factors were related to the characteristics of management and its attitude towards the audit, while the least important fraud risk factors were related to the difficulties in the client's financial performance. Factor analysis found that the fraud risk factors could be classified into four separate groups. Possible interpretations of the findings were discussed, such as considering the Jordanian business environment characteristics, and the findings were compared to those of extant international studies. Keywords Fraud risk factors, Audit programmes, Audit programs, Audit firms, JordanThis article is available in Australasian Accounting, Business and Finance Journal: http://ro.uow.edu.au/aabfj/vol7/iss1/5 Fraud Risk Factors and Audit Programme Modifications: Evidence from JordanModar Abdullatif 1 * AbstractThis study explores how audit firms in Jordan deal with the presence of fraud risk factors in audit clients. In doing so, the study seeks to explore which fraud risk factors are more important to Jordanian auditors, and how Jordanian auditors consider modifying their audit programmes when fraud risk factors are present in clients. The study uses a structured questionnaire that was administered to senior level auditors in the largest Jordanian audit firms. The findings show that almost all of the 20 fraud risk factors included in the questionnaire were only slightly important (if not unimportant), a finding that is arguably alarming. The perceived importance of modifying the audit programme in the presence of each fraud risk factor was related to the perceived importance of the fraud risk factor itself. However, changes in the nature and extent of audit procedures were more important than changes in the timing of the procedures or the members of the audit team. The most important fraud risk factors were related to the characteristics of management and its attitude towards the audit, while the least important fraud risk factors were related to the difficulties in the client's financial performance. Factor analysis foun...

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Section: Most Important Fraud Risk Factorsmentioning

confidence: 99%

Fraud Risk Factors and Audit Programme Modifications: Evidence from Jordan

Abdullatif¹

2013

AABFJ

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“…Asare and Wright, 2004;Bell and Carcello, 2000;Eining et al, 1997;Loebbecke et al, 1989;Pincus, 1989), Shelton et al (2001) report finding three Big Five firms that utilize a red flag checklist to identify the presence or absence of fraud risk factors. 18 Adapted from one or more of the following: AICPA (1997); AICPA (2002); Apostolou et al (2001); Bell and Carcello (2000); Eining et al (1997); Hackenbrack (1993); Davidson (1994); Zimbelman (1997). 19 The significant Pearson's product-moment correlations between ''Comp'' and both ''Trust'' (0.244) and ''Risk'' ()0.220) should be noted at this point because they were not expected.…”

mentioning

confidence: 99%

The Effects of Satisfaction with a Client’s Management During a Prior Audit Engagement, Trust, and Moral Reasoning on Auditors’ Perceived Risk of Management Fraud

Kerler

Killough

2008

J Bus Ethics

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“…A deeper understanding of the de facto tone at the top could work as a preventive fraud risk factor. Although some progress has been made in this direction (see, for example, Apostolou et al 2001), the challenge rests in incorporating more fully the human side in the assessment of tone.…”

Section: Characteristics Of Obstaclesmentioning

confidence: 99%

“…2 This notion is supported by the studies suggesting tone at the top as a key fraud risk factor (see, e.g.,Apostolou et al 2001).…”

mentioning

confidence: 95%

A Disposition-Based Fraud Model: Theoretical Integration and Research Agenda

Raval

2016

J Bus Ethics

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For several decades, most discussion on financial fraud has centered on the fraud triangle, which has evolved over time through various extensions and re-interpretations. While this has served the profession well, the articulation of the human side of the act is indirect and diffused. To address this limitation, this research develops a model to explain the role of human desires, intentions, and actions in indulgence of, or resistance to, the act of financial fraud. Evidence from religion, philosophy, sociology, neurology, behavioral economics, and social psychology is integrated to develop and support an alternative fraud model, called the disposition-based fraud model (DFM). To articulate the model, its two primary components, disposition and temptation, are further developed and extended. Although the DFM is generally applicable to any act of fraud, this paper focuses on executive fraud. The similarities and differences between the DFM and extant fraud models are discussed. Importantly, in light of the DFM, a re-interpretation of the fraud triangle is made to improve our understanding of the human element in it. Additionally, potential implications of the model for corporate governance are discussed, suggestions for further research are offered, and the DFM's strengths and limitations are noted.

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The Relative Importance of Management Fraud Risk Factors

Cited by 86 publications

References 6 publications

Fraud Risk Factors and Audit Programme Modifications: Evidence from Jordan

Fraud Risk Factors and Audit Programme Modifications: Evidence from Jordan

The Effects of Satisfaction with a Client’s Management During a Prior Audit Engagement, Trust, and Moral Reasoning on Auditors’ Perceived Risk of Management Fraud

A Disposition-Based Fraud Model: Theoretical Integration and Research Agenda

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