Understanding financial reporting fraud in Egypt: evidence from the audit field

Kassem, Rasha

doi:10.1080/01436597.2019.1626709

Cited by 9 publications

(4 citation statements)

References 28 publications

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“…But unfortunately, the intense pressure from stakeholders increasingly encourages company management to deceit to deliver the most delicate information for the company's performance (Kassem, 2017). In addition, the employees and investors increasingly stimulate management to cheat in financial reporting (Makhaiel and Sherer, 2017; Kassem, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Financial intelligence unit of Pakistan: an evaluation of its performance and role in combating money laundering and terrorist financing

Sultan

Mohamed

2022

JMLC

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Purpose This study aims to determine the performance of the Pakistani financial intelligence unit in combating money laundering/terrorist financing in local and global contexts. Design/methodology/approach The study used a qualitative research design. The objective is achieved by critically examining the Anti-money Laundering Act and its relevant clauses concerning the financial monitoring unit and other related legislation. Further, empirical data was collected through semi-structured interviews with chief compliance officers from regulated entities, regulators and premier law enforcer. Findings The performance of the financial monitoring unit has severe issues concerning the dissemination of financial intelligence due to its time taking behaviour, non-sharing of feedback with reporting agencies, dearth of international cooperation, lack of trained and relevant personnel and financial constraints. Originality/value To the best of the authors’ knowledge, this is a maiden study concerning financial monitoring unit in Pakistan.

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Section: Literature Reviewmentioning

confidence: 99%

Financial intelligence unit of Pakistan: an evaluation of its performance and role in combating money laundering and terrorist financing

Sultan

Mohamed

2022

JMLC

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“…A few studies indicate how to improve auditors' fraud risk assessment and response skills. For instance, Kassem (2019) and Nguyen et al (2019) suggest that knowledge of how financial reporting fraud schemes are committed and concealed could help auditors design effective audit tests to assess fraud risk. And, it could help those charged with governance design effective fraud prevention and detection techniques, and auditors could use help from forensic specialists to uncover accounting fraud.…”

Section: Internal Controls and Risk Managementmentioning

confidence: 99%

Elucidating corporate governance’s impact and role in countering fraud

Kassem

2022

Self Cite

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Purpose This paper aims to highlight the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identify gaps in the literature and suggest new directions for future research. Design/methodology/approach The paper is based on a comprehensive general literature review using multiple search engines and databases. Findings This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud and detect fraud, particularly corporate fraud, insider fraud and asset diversion. Some companies use corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including board leadership and the role of ethics; (b) board characteristics, composition and structure; ownership structure; accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top. Originality/value To the best of the author’s knowledge, this is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers and academics alike.

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“…Multinational companies normally target high-profile suppliers, which are normally one of the Big 4s’ brands; even more, every multinational client may target more than one of the Big 4 firms (one for audit and others for non-audit services). Audit suppliers have their unique nature as the Big 4 global audit networks (KPMG, PWC, E&Y and Deloitte) dominate audit markets in most countries (Kassem, 2019). The leading reputation of the Big 4 networks gives their local firms a chance for higher demand from FDIs than non-Big 4 audit suppliers.…”

Section: Introductionmentioning

confidence: 99%

“…In sum, the findings indicate that serving FDIs is one of the greatest motivations that lead to the expansion and development of the local Big 4 firms in Egypt. The Egyptian Big 4 firms work in Egypt since the 1990s (El-Dyasty and Elamer, 2020; Kassem, 2019), but they only developed and are well linked to their global networks after the massive entrance of FDIs into the Egyptian market in the first decade of this century. Our findings are consistent with prior research that examined the effects of serving cross-border clients on audit markets in different environments (Rose, 2005; Ting et al , 2008).…”

Section: Introductionmentioning

confidence: 99%

The influence of foreign direct investment on the Egyptian audit market: what do Big 4 partners’ perceptions tell us?

Eldaly

Elamer

Abdel-Kader

2022

JFRA

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Purpose This study aims to examine the effects of the entry of foreign direct investments (FDIs) on the audit markets in developing countries (i.e. Egypt). There is a long-standing debate on the impact of FDIs on developing markets, but little is still known about the effect of FDI on national suppliers, such as audit firms. Design/methodology/approach This paper reports the results of a study that used qualitative research methods. It involves interviews with senior management teams of the Big 4 audit firms, to find out how these firms deal simultaneously with conflicting global and local influences. The interviews were complemented by the publicly available data on the firms’ websites as well as published reports related to the Egyptian economy and current investment regulations. Findings Drawing on the institutional theory, the findings suggest that an increased litigious environment, compliance with developed markets’ regulations, auditor regulatory sanctions and improved local accounting and auditing standards are highly significant consequences of foreign investment inflows. The findings indicate that more emphasis has been given to the quality of audit and auditors’ independence when auditing FDIs. Both audit regulators and audit firms in the domestic market pay higher attention to improving the quality of financial reports when FDIs have entered the market. More inspections and reviews for audit firms have been conducted, and local auditing and accounting standards have been revised to be in compliance with international standards. Research limitations/implications Our results have important implications for investors, regulatory authorities and governments in relation to the development, implementation and enforcement of international financial reporting and auditing standards. Originality/value Policymakers and regulators in Egypt have responded to international pressure by revitalizing their local accounting and auditing standards and adopting international financial reporting and auditing standards. The authors identify strategies that have been adopted by audit firms to face the FDIs’ challenges.

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Understanding financial reporting fraud in Egypt: evidence from the audit field

Cited by 9 publications

References 28 publications

Financial intelligence unit of Pakistan: an evaluation of its performance and role in combating money laundering and terrorist financing

Financial intelligence unit of Pakistan: an evaluation of its performance and role in combating money laundering and terrorist financing

Elucidating corporate governance’s impact and role in countering fraud

The influence of foreign direct investment on the Egyptian audit market: what do Big 4 partners’ perceptions tell us?

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