Fraud prevention disclosure on Malaysian public universities’ websites
| DOI | https://doi.org/10.1108/JFC-09-2020-0193 |
| Published date | 22 June 2021 |
| Date | 22 June 2021 |
| Pages | 841-857 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Nero Madi,Corina Joseph,Mariam Rahmat,Jennifer Tunga Janang,Normah Haji Omar |
Fraud prevention disclosure
on Malaysian public
universities’websites
Nero Madi,Corina Joseph and Mariam Rahmat
Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Sarawak,
Kota Samarahan, Malaysia
Jennifer Tunga Janang
Faculty of Business and Management, Universiti Teknologi MARA,
Cawangan Sarawak, Kota Samarahan, Malaysia, and
Normah Haji Omar
Accounting Research Institute, Universiti Teknologi MARA, Shah Alam, Malaysia
Abstract
Purpose –The purpose of this paper is to investigate the extent of fraud prevention disclosure on the
Malaysianpublic universities’websites.
Design/methodology/approach –The level of fraud prevention informationdisclosure was examined
using content analysis of all 20 public universities in Malaysia based on the university fraud prevention
disclosureindex (UFPDi) previously developed by the authors’researchteam.
Findings –The disclosures of eight aspects of fraud prevention policies, responses, initiatives and
mechanisms were not satisfactory.Possible reasons could be because of lack of awareness and appreciation
on the institutionalmechanisms and lack of formal pressure from the relevant authority.
Research limitations/implications –Data collectionfor analysis was conducted during a periodof one
month only dueto rapid changes of the information on the websites.
Social implications –The low level of disclosur e using UFPDi will prompt the Mala ysian public
universities to take proactive actions in promoting transparent and good governance among the
university staff hence assisting the government in addressing the fraud problem that is plaguing the
nation.
Originality/value –This paper is an extensionto the authors’previous work on UFPDi. It further explains
and highlights the extent of fraud prevention disclosures among academic institutions who are receiving
financialresources from the government.
Keywords Disclosure, Prevention, Fraud, Public universities
Paper type Research paper
1. Introduction
Every individual is entitled to education as it is a fundamental human right. Reformation
in higher education has taken place because of various factors such as growing demand
on higher education in building a good life and robust societies, globalization and
diversification and also government inefficiency (Osipian, 2007;Eaton, 2016).
This research was supported by the Accounting Research Institute, Malaysia (G rant number
600-IRMI/ARI 5/3[21/2019]).
Fraud
prevention
disclosure
841
Journalof Financial Crime
Vol.28 No. 3, 2021
pp. 841-857
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-09-2020-0193
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
Unfortunately, corruption in higher education institutions and in the educational
industry overall is also growing (Osipian, 2007) and has become global problem.
Corruption in higher education can be defined as “a system of informal relations
established to regulate unsanctioned access to material and nonmaterial asset through
abuse of public or corporate trust”(Osipian, 2007, p. 315). Hallak and Poisson (2002)
defined corruption in education as “the systematic use of public office for private benefit,
whose impact is significant on the availability and quality of public goods and services
and as a consequence on access, quality or equity in education.”
In realizing the right to education, corruption and poor governance has become a major
impediment. According to Global Corruption Report (2013), corruption can be found at all
levels of our education system ranging from the procurement of school resources, nepotism
in the hiring of teachers to the skewing of research results for personal gain. Fighting
academic corruption is therefore essential (Eaton, 2016). The Global Corruption Report
(2013) on education listed four factors that can foster corrupt practices in academia. First,
government support for higher education has lagged. The rapid increase in the number of
students has sometimes led to a lower per-studentallocation and may erode the salaries and
conditions of service for instructional staff. Because of that, some staff may turn to
inappropriate behavior, which draws them away from their university responsibilities.
Second, the decline in government support has led some universities finding their own
funding such as throughestablishment of consulting company that sells facultyexpertise to
business and industry. As a result, the faculty members are in intense pressure to increase
their teaching loads, teach in special weekend courses, secure funded research and
commercialize their research’s product. Third, as universities seek high reputation in
university, faculty members have come under intensified pressure to conduct research and
publish in top tier journals. Fourth, as part of expecting universities to raise more of their
own resources, universities are being granted greater administrative autonomy. The
decentralized functions and risk management processes in universities which divested to
faculty, disciplineand/or school level have made it difficult to uncover fraud.
These factors have createdthe motive and the opportunity for corrupt practices in higher
education. Zamaletdinov et al. (2016) identified the types of corruption in universities,
forgery, taking of bribes, abuse of authority, giving of bribes and misappropriation of
budgetary funds. The corruption types in higher education range from grand corruption
involving politicians (e.g. unearned degrees) and diversion of higher education budgets, to
bureaucratic and administrative corruption in university management, to academic
dishonesty. One factor that makes higher educationincreasingly vulnerable to corruption is
that a university degree is now become a prerequisite for getting good jobs, positions and
other benefits. (HigherEducation Review, 2018).
Obviously, corruption can cause monetary loss; for example, price water house coopers
(PWC’s) 2018 Global Economic Crime and Fraud Survey finds that 64% of respondents
indicated that losses are due directly to their most disruptive fraud could reach US$1m.
Fraud will also damage the reputationof university and risk of grant funding being reduced
because of inability to properly manage risk of fraud. Besides that, there will be disruption
to business as resources are diverted to solveor investigate the staff who involved in fraud,
and it might take years to be settledafter the incident is exposed (Deloitte, 2011).
The Malaysian Government has issued several policies that enable the departments or
agencies to act against fraudsters such as the Financial Procedure Act 1957, Treasury
Instructions, the Treasury Circulars and the General Orders. (Mat et al.,2013). Many anti-
corruption strategies also have been created, but it is reported that the implementation and
monitoring aspect are still lacking. As one of the initiative in realizing the government’s
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