Mitigating asset misappropriation through integrity and fraud risk elements. Evidence emerging economies
| DOI | https://doi.org/10.1108/JFC-04-2016-0024 |
| Published date | 02 May 2017 |
| Date | 02 May 2017 |
| Pages | 242-255 |
| Author | Haniza Hanim Mustafa Bakri,Norazida Mohamed,Jamaliah Said |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Mitigating asset misappropriation
through integrity and fraud
risk elements
Evidence emerging economies
Haniza Hanim Mustafa Bakri
Department of Accounting, Universiti Tunku Abdul Rahman,
Kajang, Malaysia
Norazida Mohamed
Department of Accountancy, Universiti Teknologi MARA,
Kota Bharu, Malaysia, and
Jamaliah Said
Accounting Research Institute, Universiti Teknologi MARA,
Shah Alam, Malaysia
Abstract
Purpose –This paper aims to evaluate the effects of fraud risk elements and integrity on asset
misappropriation in the Royal Malaysian Police (RMP). In addition, this research also examines whether
integrity moderates the relationship between fraud risk elements and asset misappropriation.
Design/methodology/approach –Data are gathered from the responses of the questionnaires
distributed to the RMP. A total of 200 questionnaires were distributed based on simple random selection from
ve RMP centres in the capital city. Out of 200 questionnaires distributed, only 189 were returned.
Findings –The ndings indicate that the existence of fraud risk elements signicantly affects the incident
of asset misappropriation. An interesting nding was made that integrity is negatively related to asset
misappropriation. This implies that integrity is an important value in minimising the occurrence of asset
misappropriation. The results also indicate that minimising fraud risk elements is crucial in reducing the
incident of asset misappropriation.
Originality/value –This present paper contributes to the literature by investigating a commonly
proposed but underexplored elements of integrity in mitigating fraud. Incorporating integrity and fraud risk
elements simultaneously in a single framework in context of RMP would enhance the understanding and will
be able to provide a framework for practitioners on how to mitigate the incident of fraud.
Keywords Fraud triangle, Integrity, Asset misappropriation, Fraud risk elements
Paper type Research paper
1. Introduction
Fraud is believed to be among the most critical problems and challenges in the current
corporate environment (Smith et al., 2005). Either in the private or public sector, fraudulent
activities among employees still occur, regardless of the measures that have been put in place
by the government and professional bodies to minimise their occurrence (ACFE, 2012). A
KPMG survey in Australia and New Zealand in 2010 reported that the average number of
fraud occurrences in 2008 is 530 cases, while in 2010, that went up to 813 cases (KPMG, 2010).
Similarly in Singapore, data revealed that the total estimated cost of fraud occurrence in 2011
has increased to 6.5m, compared to 2008, which saw only 5.3m in losses (KPMG, 2011).
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
JFC
24,2
242
Journalof Financial Crime
Vol.24 No. 2, 2017
pp.242-255
©Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-04-2016-0024
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