Antecedents and consequences of staff-related fraud in the Ghanaian banking industry

Abstract

Purpose The purpose of this paper is to investigate the antecedents and consequences of employee fraud, focusing on the banking industry in Ghana. Design/methodology/approach A major bank was selected for the case study analysis. The researchers used qualitative data analysis for the study. Content analysis of investigation reports and interviews of employees from different functional areas were used as the main data collection tools. Findings This study found that loans contracted by bank employees with huge repayment amounts put financial pressure on them to commit fraud. The study also found that inadequate controls in some areas of the bank can fuel the commission of fraud. In addition, aggrieved employees have a high propensity of committing fraud. Huge punitive consequences were noted to exist for employees who perpetrate fraud, and shareholders are also affected by the fraudulent behaviour of employees. Research limitations/implications Findings shown in the study confirm the hypotheses of the fraud triangle theory on the causes of fraud despite its criticisms. The findings are also consistent with extant studies on the antecedents and consequences of fraud. The use of one bank for the case study analysis as well as the three-year analysis period impose a limitation on the study. Future studies can explore fraud using other different theoretical lenses. Gathering data from more than one bank and for a longer period of analysis may provide more accurate results. Practical implications This study provides some recommendations for fraud prevention in the banking industry in Ghana. The major one is the need for the central bank to collaborate with financial institutions to set up an effective creditworthiness system that will aid the monitoring of activities of the banks. Banks should also ensure that systems of controls are reviewed regularly to identify and deal with fraud. Originality/value This study is original, as it focuses on an industry that is highly susceptible to fraud due to issues of confidentiality with data and with scanty literature on fraud.

Determinants of management fraud in the banking sector of Ghana: the perspective of the diamond fraud theory

“…Different studies have been carried on fraud in organisations and the general view is that opportunity positively relates to occurrence of fraud (Schuchter and Levi, 2016; Maria and Gudono, 2017; Abdullahi and Mansor, 2018; Asmah et al , 2020). Said et al (2017) integrated ethics into the fraud triangle theory in detecting fraud in the banking system of Malaysia.…”

“…Although, there have been studies on fraud based on various fraud theories (Akomea-Frimpong et al , 2016; Baz et al , 2016a; Reurink, 2016; Said et al , 2017; Muhsin et al , 2018a, 2018b; Akomea-Frimpong et al , 2019; Asmah et al , 2020), the focus had not been on fraud at the executive and management level in banks, especially in the Ghanaian context where “owner CEOs” dominate privately owned banks. In the case of Ghana, few studies focussed on the effect of financial fraud on the financial performance of financial institutions (Akomea-frimpong et al , 2016; Bonsu et al , 2018).…”

“…In the case of Ghana, few studies focussed on the effect of financial fraud on the financial performance of financial institutions (Akomea-frimpong et al , 2016; Bonsu et al , 2018). Asmah et al (2020) investigated the antecedents and consequences of fraud in the banking industry of Ghana but focused on employees in general. Besides, although a study attempts to investigate the causes of fraud in the framework of the fraud triangle theory, it failed to use any of the three elements of the theory (Bonsu et al , 2018).…”

Determinants of asset misappropriation at the workplace: the moderating role of perceived strength of internal controls

“…Organizations lose about 5% of their revenues to fraud every year, translating to about US$7.1bn from a sample of 2,690 cases reviewed by the Association of Certified Fraud Examiners (ACFE) (2016) in their 2018 report to the nations (ACFE, 2016). While the literature acknowledges that fraud could be perpetuated both externally and internally, the evidence provided by extant studies (Asmah et al, 2019;Nigrini, 2019;Robinson and Aria, 2018;Zahari et al, 2020) demonstrate that internally perpetuated fraud by employees, management and sometimes owners of firms (occupational fraud) has been more rampant than the former in recent years. Most of these studies have focussed predominantly on financial statement fraud with less attention on the other forms of occupational fraud.…”

Customers’ awareness and knowledge level of fraudulent acts in electronic banking in Ghana: evidence from a universal bank

“…Specifically, Repousis et al (2019) found that forgeries, bribery and money laundering are the most notable forms of fraud risk, and the efficient method of fraud is the use of dormant accounts and cheques in the banking sector. In addition, Asmah et al (2019) identified the banking industry as being highly predisposed to fraud because of data confidentiality issues and limited fraud literature while Avortri and Agbanyo (2020) also reported that there is a substantial rise in the frequency of fraud cases in Ghana’s banking sector.…”