Organisational fraud: a discussion on the theoretical perspectives and dimensions

Abstract

Purpose The purpose of this paper discusses literature on organisational fraud in terms of organisational behaviours that lead to fraudulent actions. The discussion includes organisational perspectives and weaknesses that can be obtained from the organisation fraud dimensions of leadership structure, control system and organisational culture. Design/methodology/approach The paper explores theoretical explanations in terms of the causality of organisational fraud by comparing its different levels. The core organisational fraud triangle (Free, Macintosh and Stein, 2007) approach was initially conceptualised on different factors that caused organisational levels of fraud. Findings Different factors, such as the collusion and normalisation of fraud, enabled organisational levels of fraud. Originality/value The paper presents an extension of the original framework.

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

“…Asset misappropriation is the main focus of this study as the phenomenon has not received much attention in existing studies although it remains the most common type of occupational fraud (ACFE, 2018), which can be committed by all individuals within a firm (Zahari et al, 2020). In addition to its dominance, asset misappropriation is a phenomenon that is of great importance to the Accounting discipline, especially in the field of auditing.…”

“…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.…”

“…Notwithstanding the relevance of financial statement fraud to the fraud discourse, empirical studies have shown that the frequency with which employees engage in other forms of fraudulent activities, most especially asset misappropriation, far surpasses the former (ACFE, 2016;ACFE, 2018;Zahari et al, 2020). According to the ACFE (2018) report, asset misappropriation alone occurred in 89% of all reported fraud cases between 2016 to 2018.…”

The Urgency of Rationalization for Unethical Behavior and Accounting Fraud

“…Meanwhile, the employees do not take the technique of neutralization of the denial of responsibility or justification that is diver sion or disclaimer of responsibility and the appeal to higher loyalties or justification to get a good assessment (Andon et al, 2015;Asmah et al, 2019;Zahari et al, 2020). This research shows that high rationalization or justification will make the tendency for cheating to be higher or increase.…”

Investigating Fraud Risks Assessment Practices in Public Sector Audits

“…Given that fraud can have an impact on business processes, performance, and can even lead to company failure Tomaš & Todorović, 2016;Zahari et al, 2020), a company in addition to needing an anti-fraud system, must also have the competence to address fraud in terms of policy, management, fraud schemes, and elements of fraud. To achieve this, an auditor is required to implement a comprehensive Fraud Risk Assessment methodology in accordance with applicable standards both internationally and nationally.…”