The relationship between South Korean chaebols and fraud

Abstract

PurposeIn recent years, many of South Korea's most prominent organizations have been involved in large‐scale frauds. These frauds have had a devastating impact on South Korean society and resulted in unnecessary suffering and high levels of unemployment for the middle class. With the aim of understanding the causes of these scandals, this paper takes an in‐depth look at the chaebol organization.Design/methodology/approachThe paper takes a conceptual approach by first examining chaebols in greater detail. The paper then examines classical fraud theory, including the fraud triangle. The paper then examines chaebol organizations through the lens of the fraud triangle. By doing so, it is possible to understand why chaebols, in particular, are susceptible to fraud and corruption.FindingsThe paper provides evidence to suggest that chaebol organizations have inherent fraud risks. In order to minimize these fraud risks, chaebol organizations must address these issues.Originality/valueThis paper fulfills an important area of research by providing basic information about the relationship between chaebol organizations and fraud.

Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry

“…Opportunity provides a chance to fraudsters to commit fraud. Many scholars (Albrecht et al, 2010;Murdock, 2008;Lister, 2007;Kassem et al, 2012;Manurung & Hadian, 2013;Dellaportas, 2013) believe that opportunity is a very significant factor that contributes to fraud and other fraudulent activities behavior, such as embezzlement and loan manipulation, which are mostly caused by lack of internal control within the organization.…”

“…Pressure or incentive elements will result in managers or employees committing fraud. Several researchers have found a significant relationship between pressure and fraud occurrence Albrecht et al, 2010;Akindele, 2011). An individual employee will tend to commit fraud if elements of pressure, whether financial or non-financial, exist (Murdock, 2008).…”

“…Employee fraud reduces the confidence of outside investors and the stability of the capital market. These instances in turn have highly impacted the growth and development of the economy, especially in the developing countries (Chen et al, 2013;Albrecht et al, 2010;Akindele, 2011). Scholars generally agree that employee fraud in banking continues to be a major concern for organizations of all sizes and across all regions (PWC, 2005;Klein, 2015).…”

Fraud Triangle Sebagai Pendeteksi Kecurangan Laporan Keuangan

“…99 yaitu motif ekonomi selalu muncul pada perusahaan fraud serta faktor psikologi dan adanya kesempatan berperan penting dalam terjadinya kecurangan. Pendekatan teori fraud triangle juga dipakai Albrecht et al (2010) untuk mengidentifikasi situasi yang menyebabkan perusahaan Chaebol di Korea dalam melakukan kecurangan penelitian. Hasil penelitian menunjukan adanya hubungan keluarga yang kuat di dalam perusahaan memainkan peran yang besar dalam hal tekanan dan kesempatan.…”

Challenges to the fraud triangle: Questions on its usefulness

“…The ACFE's deconstruction of the term "rationalisation" and its alignment with dishonesty and a lack of integrity (or personal ethics) has led to increased research on the individual psychology of the fraudster (Buckhoff, 2001;Dedoulis, 2006;Choo & Tan, 2008;Murdock, 2008;Rae & Subramaniam, 2008;Brazel et al, 2009;Albrecht et al, 2010;Cohen et al, 2010;Murphy & Dacin, 2011). The majority of attention seems to have been placed on language that standard setters have defined as the dominant logic of rationalisation.…”