Exploring the impact of organizational investment on occupational fraud: Mediating effects of ethical culture and monitoring control (original) (raw)
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Pacific Accounting Review
Purpose Recent research has confirmed an underlying economic logic that connects each of the three vertices of the “fraud triangle” – a fundamental criminological model of factors driving occupational fraud. It is postulated that in the presence of economic motivation and opportunity (the first two vertices of the fraud triangle), the likelihood of an occupational fraud happening in an organization increases substantially if the overall organization culture is perceived as being slack toward fraud as it helps potential fraudsters in rationalizing their actions (rationalization being the third vertex of the fraud triangle). This paper aims to offer a viable approach for collecting and processing of data to identify and operationalize the key factors underlying employee perception of organization culture toward occupational frauds. Design/methodology/approach This paper reports and analyses the results of a pilot study conducted using a convenience sampling approach to identify and op...
This study attempts to integrate ethical values into the fraud triangle theory in the context of Malaysian banking industry. Primary data were collected through the survey of 108 questionnaires administered to the employees of the top three largest banks in Malaysia. The findings revealed that ethical values were negatively related to employee fraud, and two elements of fraud triangle theory, namely, opportunity and rationalization, were positively related to employee fraud. This implies that high ethical value is crucial to mitigate employee fraud. To minimize employee fraud, the banking industry should reduce opportunities and employee negative rationalization through strong internal control. This study contributes to literature on the occurrences of employee fraud, which is not widely discussed, especially in the context of the banking industry in developing countries.
The Role of Corporate Culture in Managing Occupational Fraud
Research Journal of Finance and Accounting, 2017
Occupational fraud remains a menace in the corporate world. It involves a wide range of undercover crimes perpetrated by employees at all levels of an organizational hierarchy. In recent years, the media has constantly reported on these malfeasances to the disappointment of the public. In response to the several corporate scandals, many organizations have instituted strong internal control systems, procedures and programs as well as corporate governance to safeguard their organizations from occupational fraudsters. However, these efforts have proven futile because they don’t touch the ‘heart’. Therefore, we contend that corporate culture plays a critical role in managing the risks of fraudulent acts. Particularly, when ethics is solidly implanted in corporate culture and exemplified by top leadership, an organization is more likely to minimize internal scams. Consequently, and board and management should create and sustain an ethical corporate culture that integrates an organization...
2021
The objectives of this study were to analyze the mediating role of deviant behavior on the influence of organizational culture and ethical climate on employee performance. This study was conducted on 112 government-owned bank employees in Manado, using Partial Least Square (PLS) analysis. This study indicates that organizational culture and ethical climate have a significant positive effect on employee performance. Organizational culture and ethical climate also have a significant negative effect on deviant behavior. However, behavior does not have a significant effect on employee performance. Deviant behavior also does not mediate the influence of organizational culture and ethical climate on employee performance. This study places deviant behavior as a mediating variable on organizational culture and ethical climate on employee performance. An important finding from this study is that behavior does not play a role in improving employee performance, nor does it play a mediator betw...
Journal of Economics, Finance And Management Studies, 2021
This study aims to examine and determine the effect of moral intentions, organizational commitment, professional identity and rewards for disclosure of cheating behavior with Islamic work ethics and organizational culture as a moderating variable. This research is a quantitative research with a descriptive approach. The sample used in this study was employees of the Makassar Syariah branch of BNI. The total sample amounted to 72 using purposive sampling techniques. The data analysis method uses multiple regression and moderating regression analysis with the absolute difference value approach. The results of this study indicate that moral intentions, organizational commitment, professional identity and rewards have a positive and significant influence on the disclosure of fraud behavior. The results of research related to moderating variables, Islamic work ethics variables only act as moderating variables in the relationship of moral intentions to the disclosure of fraud behavior. Wh...
Proceedings of the Proceedings of the 1st International Conference on Finance Economics and Business, ICOFEB 2018, 12-13 November 2018, Lhokseumawe, Aceh, Indonesia
This research was conducted to examine impact of rules obedience, management morality, and effectiveness of internal controls, towards Accounting Fraud Tendency, which mediated by unethical behaviour in Regional Devices Organization (RDO) at Keerom regency, Papua. Data was obtained through questionnaire and was analysed using path analysis through the assistance of SPPS computer program version 23.0. The results showed that obedience towards accounting rules and management morality has got positive and significant impact towards accounting fraud tendency. The effectiveness of internal management system has got positive impact, but not significant, towards accounting fraud tendency. The impact of non-ethical behaviour as intervening between management morality and accounting fraud tendency was not dominant. In other side, non-ethical behaviour, as intervening between accounting obedience and effectiveness of internal management system, towards accounting fraud tendency, has not got dominant impact.
STUDY OF FRAUD TENDENCY: THE ROLE OF UNETHICAL BEHAVIORS AS MEDIATION
JEBIS: Jurnal Ekonomi dan Bisnis Islam, 2021
Islamic banking and Islamic insurance are institutions that are trusted by the public that play an important role in the economy that should uphold Islamic values. But in fact, there are still many cases of fraud that occur in Islamic banking and Islamic insurance. This study aims to examine the determinant factor fraud tendency with the role of unethical behavior as mediation. The sample used is the financial staff of Islamic banking and Islamic insurance in DKI Jakarta as many as 118 respondents. The data analysis method used in this research is Partial Least Square (PLS-SEM). The results of this study indicate that the implementation of good corporate governance (GCG)
Journal of Business & Economics Research (JBER), 2011
This study explores the relationship between organizational ethical culture and ethical behavior of accounting/finance professionals working in the insurance industry in the United States. Results of 100 respondents in five different insurance organizations suggest that there is a significant relationship between organizational ethical culture and ethical behavioral intentions given bad debt write off and insider trading ethical vignettes. This was consistent with prior research findings that written (formal) and unwritten (informal) organizational policies significantly affect employees' ethical decision-making (Sims and Keon, 2000 & 1997). Key (1999) also argued that organizational culture sends messages as to sanctioned and unsanctioned behavior. The Relationship between Organizational Ethical Culture and Ethical Behavior ey (1999) argued that ethical behavior by business leaders send messages on sanctioned and unsanctioned behavior. Smith (2003) pointed out that unethical behavior is a dagger in the heart, and lack of integrity have led to the fall of giant corporations such as Enron, MCIWorldcom, Adelphia, and Global Crossing. The goal of this study is to empirically investigate the relationship between organizational ethical culture and ethical behavioral intentions among accounting/finance professionals in the insurance industry in the United States of America. Ampofo et al, (2004), in their article titled "Organizational Ethical Culture: A Significance Determinant of Ethical Behavior," mentioned Schein's (1992, p.12) definition of culture which is a pattern of shared foundational assumptions that a group learns as it solves its problems of external adaptation, and internal integration, that works well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. Ampofo et al (2004), further used Key's (1999) description of organizational ethical culture defined as the as beliefs about the ethics of an organization, which are shared by its members and may be logically conceptualized on a continuum bounded at one end by unethical companies and at the other, highly ethical companies. Moreover, the concepts of organizational ethical culture and ethical behavior have generated greater interest among researchers, educators, practitioners, and the general public post-Enron, possibly, due to the catastrophic consequences of the corporate failures. Following the Associated Press (2002) report that the Texas State Employees Retirement Fund (TSERF) lost an estimated $63 million in Enron investments, the investing public does not need an analyst to see why business ethics is a "hot" topic in practice and education. Enron's bankruptcy filling has been portrayed as the result of accounting fraud and greed (Culp and Hanke, 2003). Further, the perceived role of accounting firms, such as Arthur Andersen in the corporate K
Determinants Of Accounting Fraud Trends With Un Ethical Behavior As Mediation
Jurnal Akuntansi
This study aims to determine the effect of internal control, information asymmetry, and individual morality on the tendency of accounting fraud with unethical behavior as an intervening variable. The sample for this research is the head and executive staff of the financial sub-section of the SKPD in Central Java Province. The sampling method is purposive sampling method. The number of SKPD samples is 22 agencies. The data is primary data. The data analysis is SEM (SmartPLS Wrap 3.0). The results showed that internal control, information asymmetry, and individual morality had a significant effect on unethical behavior. Internal control, information asymmetry affects tendency of accounting fraud, individual morality has no effectagainst accounting fraud tendencies. Information asymmetry, morality individuals influence the tendency of accounting fraud through unethical behavior as mediation, while internal control is notsignificant effect.
Journal of Financial Crime
Purpose Government institutions in Indonesia have implemented an integrity system as a strategy to prevent fraud and corruption by integrating the risk management and organizational ethics. This integration is important to increase the awareness of fraud in the organization. Based on self-determination theory, this study examines the mediating effect of fraud awareness on risk management and integrity systems. Design/methodology/approach The study was carried out by using a quantitative approach. The participants of the survey were auditors of the inspectorate of Ministries and Government Agencies in Indonesia. The number of respondents was 103 auditors. The hypothesis testing method used the partial least squares structural equation modeling (PLS-SEM) approach. The data were processed by using WarpPls 7.0 software. Findings There are two main results in this study. First, risk management directly affect the integrity of the system. Second, fraud awareness mediates the relationship ...