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

Abstract

Purpose Fraud has become one of the most challenging issues facing the financial sector of most countries globally. These fraudulent transactions have led to loss of huge sums of money to financial institutions, as well as to their depositors. The current crises in the financial sector of Ghana, especially among the Deposit Taking Institutions, has largely been attributed to connected lending and lending to affiliated party institutions which are fraudulent corporate governance issues. This study, therefore, aims to assess the determinants of fraud among management staffs in the banking sector of Ghana. Design/methodology/approach This study is anchored on the fraud diamond theory (FDT). Primary data was collected from 120 management staffs of the remaining 23 universal banks in Ghana. Estimation was done using structural equation modelling with maximum likelihood estimation technique. Findings Fraudulent activities in the banking sector of Ghana are driven by opportunities, pressure, rationalization and capacity to commit fraud, with capacity being the dominant factor. Practical implications The regulator should strictly enforce the structure of shareholding as directed in the corporative governance directive to prevent ownership of a bank in the name of one person or a family, which gives high capacity to the Chief Executive Officers to misuse funds. The offenders should also be punished. Finally, the regulator should improve their supervision. Originality/value This study places the FDT into the context of the current banking crises of Ghana. The study therefore goes a long way to guide the regulator and government to formulate and implement policies on shareholding structure of banks.

Academic Fraud in Online System during the COVID-19 Pandemic: Evidence from Lampung - Indonesia

“…Opportunity can happen for the situation allowing committing fraud [30]. Opportunity usually happen in a low internal control system institution, inappropriate supervision, low punishment, and unclear procedure [31], [26], [32], [33], [34]. A fraudster always has the knowledge and the opportunity to commit fraud [19].…”

“…Only people who can commit fraud can see opportunities to commit and make it happen. Opportunity opens the door to fraud, pressure, and rationalization can attract someone to pass through it, but only people who have the capability can realize that there is an open door and opportunity to take advantage of it [31], [38]. Academic fraud is influenced by the ability of students to rationalize academic dishonesty and opportunities to cheat [31], [39].…”

Effect of organizational learning and effectiveness on the operations, employees productivity and management performance

“…The banking industry in different countries both in the developed world and the developing nations have undergone series of consolidation leading to mergers and acquisitions to form a stronger and more formidable banking system that can withstand risk and stand the test of time (Avortri and Agbanyo, 2020). Still, the banking industry is still faced with a lot of challenges presented by the ever-changing and challenging business environment.…”

Kecurangan pelaporan keuangan organisasi kemahasiswaan: perspektif crowe’s fraud pentagon theory

“…Teori Fraud Pentagon memberikan pemahaman yang lebih mendalam mengenai penyebab dan ukuran pencegahan untuk tindakan fraud (Avortri & Agbanyo, 2020). Penelitian ini menemukan kondisi bahwa pengurus Ormawa X dan Ormawa Y di Unviersitas X melakukan berbagai bentuk kecurangan seperti membuat nota palsu, stempel palsu, dan tanda tangan palsu.…”

“…Fraud triangle Theory kemudian dikembangkan oleh Wolfe & Hermanson (2004) menjadi Fraud Diamond Theory dengan menambah satu elemen yaitu "kemampuan" (Avortri & Agbanyo, 2020). Kemampuan memungkinkan orang sering melakukan fraud (Abdullahi & Mansor, 2015).…”