An investigation of the fraud risk and fraud scheme methods in Greek commercial banks
| DOI | https://doi.org/10.1108/JMLC-11-2017-0065 |
| Date | 07 January 2019 |
| Pages | 53-61 |
| Published date | 07 January 2019 |
| Author | Spyridon Repousis,Petros Lois,Varvara Veli |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
An investigation of the fraud risk
and fraud scheme methods in
Greek commercial banks
Spyridon Repousis,Petros Lois and Varvara Veli
University of Nicosia, Nicosia, Greece
Abstract
Purpose –The purpose of thisstudy is to examine types of fraud risk and fraud schememethods in Greek
commercialbanks.
Design/methodology/approach –Data used for thisstudy were obtained from primary source through
questionnaires. This method of data collection was followed and was considered appropriate because the
information sought is not publicly available and middle management and internal auditors are in a good
position to know the answersto the questions asked. Questionnaires were sent to a sample of 230 persons,all
bank branch employees(internal auditors were excluded), in the city of Athens (capital city of Greece),in five
banks, National Bank of Greece, Piraeus Bank, Alpha Bank, Eurobank and Postal Bank, during February
2017-March 2017. Finally,of the 230 questionnaires distributed, 225 completed and returned but only 203of
them were usablequestionnaires. Cronbach’s alpha was used totest the reliability of variables.
Findings –Results showed that forgeries, briberyand money laundering are the most important types of
fraud risk, and the best fraud scheme methods are using dormant accounts and checks. Based on the
empirical findings,the study recommends that there is a need for banks to implement a code of conduct and a
code of ethics for staff,staff training, signature verification, control over dormant accounts,asking employees
about their opinions andthe way they feel about their bank, conducting surprise audits andusing a hot line
for whistleblowing.
Practical implications –The study will helpbanks in fraud risk management and in the development of
policies to reducerisk within the banking sector. Also, will be useful to all categories of potentialbank clients
and users of financialservices including shareholders, creditors,debtors and fund providers.
Originality/value –To the best of the authors’knowledge, this is the first study examining middle
managementand staff opinions about fraud risk and fraud schememethods in Greek commercial banks.
Keywords Fraud risk, Cronbach’s alpha, Fraud schemes, Greek banks
Paper type Research paper
1. Introduction
The globalization of economy, technological advancements, complexity of business and
allegations of fraudulent financial reporting have recently sharpened the ever-increasing
attention on internal controls and internal auditing. Simultaneously, the capital markets
have seen many new financial instruments and players being introduced, making the
transactions andoperations more complex.
Fraud is a major challenge to entire business world and especially for banking sector,
a very significant sector in the development of an economy. PriceWaterhouseCoopers
(2016) performed a global survey of economic crime, showing that despite significantly
increasing investment in compliance and being continuously under the scrutiny of
regulators in that time and 46 per cent of respondents in the financial services industry
reported being victims of economic crime in the past 24 months, an increase from 45 per
cent reported in 2014.
Fraud scheme
methods
53
Journalof Money Laundering
Control
Vol.22 No. 1, 2019
pp. 53-61
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-11-2017-0065
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