The Influence of Fraud Prevention Mechanisms on Fraud Awareness in The Federal Ministries in Malaysia (original) (raw)

Assessing the Fraud Prevention Mechanisms in Malaysian Government Agencies

2013

The public sector is most susceptible to fraud but effective prevention mechanisms will help it to minimize fraud risk. This paper provides an indicator on the effectiveness of fraud prevention mechanisms, which facilitate it to minimize the fraud risks, implemented by the public sector. The framework of this study is developed based on the fraud triangle concepts which explain how pressure, rationalization and opportunity could be minimized by implementing effective fraud prevention activities such as internal control assessments, training and education, and other organisation-wide strategies. This study concentrates on fraud training and education mechanisms. (Insert research method). The results show that raising fraud awareness activities, training in ethics or code of conduct, training in privacy principles and training to employees involved in fraud control activities are effective mechanisms for fraud prevention. Keywords : Fraud, fraud triangle, fraud prevention mechanism, p...

A Preliminary Study on Fraud Prevention and Detection at the State and Local Government Entities in Malaysia

Procedia - Social and Behavioral Sciences, 2014

This study examines the occurrence of fraud and identifies the prevention programs in place at the State and Local Government entities in Malaysia. Issues related to fraud are of interest due to the frequent coverage by the media which has affected public confidence. The findings suggest that fraud is a significant problem, and the main causes of fraud are poor management practices and economic pressure. Interestingly, the study finds that, in most cases, management did not take firm action against the culprits when they were caught and found guilty. Most fraud incidents were discovered through the internal audit review, employee notification and accidental discovery. The findings also reveal that most of these entities did not have effective policies and procedures for dealing with fraud.

The effect of internal control and anti-fraud awareness on fraud prevention (A survey on inter-governmental organizations)

Journal of Economics, Business, and Accountancy | Ventura, 2017

The objectives of this research are to analyze the effect of internal control and antifraud awareness on the fraud prevention in intergovernmental organization. Fraud prevention is devoted in the procurement process. This study used internal control and anti-fraud awareness as independent variable, while fraud prevention as the dependent variable. In addition, it also used a convenience sampling for collecting the data. The sample of the data was taken using questionnaires, which were distributed, to Indonesian Staff who had been involved or they had participated in the procurement process. The total number of the sample was 58 respondents. Furthermore, the data were analyzed by means of multiple regressions. The results showed that internal control and anti-fraud awareness have significant effects on fraud prevention. It indicates that the action of doing fraud can be prevented by establishing a good internal control and increasing anti-fraud awareness to all parties in the organization.

Determinant of Fraud in Government Agency: Empirical Study at the Finance and Development Supervisory Agency (BPKP) of Jakarta Representative Office

Asia Pacific Fraud Journal

ABSTRACTThe purpose of this study is to examine the influence of the appropriateness of compensation, the effectiveness of internal control systems and the organizational ethical culture on fraud in government agency. The dependent variable used in this study is fraud in government agency, while the independent variables used are the appropriateness of compensation, the effectiveness of internal control systems, and the organizational ethical culture. This study uses a sample of 105 respondents at BPKP Jakarta Representative Office. Sampling technique is conducted using convenience sampling method. Data analysis method used is multiple linear regression statistical analysis. Results of regression analysis show that the appropriateness of compensation has positive effect on the occurrence of fraud in government agency, the effectiveness of internal control system has negative effect on fraud in government agency, and the organizational ethical culture has no significant effect on fra...

Effectiveness of monitoring mechanisms and mitigation of fraud incidents in the public sector

ADMINISTRATIE SI MANAGEMENT PUBLIC, 2018

Fraud in the public sector continues to be the major issue for the governments worldwide. Thus, this study examines the extent of monitoring mechanisms within public systems curbing fraud incidents. The authors' survey concerned three dimensions of monitoring mechanisms: good governance, internal control procedures and fraud prevention programs. This survey has been conducted among various Malaysian government officers. The results show that, generally, misappropriation of assets is ranked as the most frequent fraudulent case in government agencies. Based on regression analysis, internal procedures or policies were significant in reducing fraud incidents. Additionally, both good governance and fraud prevention programs were proven to have a significant relationship with the occurrences of fraud within government agencies. In terms of the practical aspect, the study provides important information for public servants on the effectiveness and usefulness of good governance, internal control procedures, and fraud prevention program in the public sector. This paper provides an interesting contribution to the understanding of fraud incidents inside government agencies.

Development of a Fraud Risk Control Policy Framework for Public Sector Organizations

Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018), 2019

This research aimed to develop the framework for a fraud risk control policy, particularly in public sector organizations. This research used qualitative methods to analyze primary data obtained from interviews and secondary data obtained from a literature review. In doing so, this research combines three fraud risk control policy concepts: fraud risk management by KPMG; fraud risk control plan by Badan Pengawasan Keuangan dan Pembangunan Republik Indonesia (BPKP RI / Financial and Development Supervisory Board); and Global Ethics & Integrity Benchmark. The fraud risk control policy currently used by the Ministry of Finance of the Republic of Indonesia is also analyzed. The result of this research is a comprehensive concept of a Fraud Risk Control Policy that is expected to become a reference for public sector organizations to create a more comprehensive fraud control policy, especially on fraud prevention, detection, and response policies.

Internal Auditors' Perception on the Efficacy of Fraud Prevention and Detection in the Public Sector

Universal Journal of Accounting and Finance, 2021

Fraud has become a worldwide issue, impacting a massive number of organizations throughout the globe. The PwC's Global Economic Crime and Fraud Survey 2020 highlighted not only has fraud surged in the private sector, but it has also impacted the public sector causing entities to incur significant financial losses. Motivated by this phenomenon, this study aims to investigate whether fraud awareness, fraud prevention and detection strategies and anti-fraud technology are significantly related to the public auditors’ perceptions of the efficacy of fraud prevention and detection in the public sector. Data were collected through questionnaires, distributed to 180 respondents of public auditors in the Malaysian ministries. 133 usable responses were obtained, generating an effective response rate of 74%. Based on the underpinning fraud triangle theory, the research discovers that fraud awareness, and fraud prevention and detection strategies are positively related to the perceived efficacy of fraud prevention and detection. This study differs from prior studies that primarily examined the prevention and detection of fraud in the private sector, by expanding the scope to include the public sector. Determining whether fraud prevention and detection strategies exist and are properly implemented in the public sector is critical since government bodies continue to be vulnerable to irresponsible people misusing public funds. The research findings offer important insights on the level of fraud awareness among practitioners and the determination of fraud prevention and detection mechanisms and technologies that are perceived to be most effective in public organizations.

Implementation and Impact of Internal Control in Preventing Fraud in The Public Sector

2020

Fraud is a growing problem and can cause extraordinary threats to the organization. Failure to prevent and detect fraud has serious consequences for the organization. This study discusses how internal control in the public sector can prevent fraud. To achieve these goals, researchers use a literature study of various publications related to internal control in the public sector. The results showed that the weaknesses of internal control have been identified to cause fraud. Fraud will never be prevented completely, so that public sector organizations can implement internal controls to prevent and detect fraud. Management in the public sector must be able to create awareness and understanding of anti-fraud culture to all elements in the organization as an effort to

The Perception of Employees in Public Institutions on Internal Managerial Control as a Tool in Preventing and Combating the Fraud Phenomenon

2022

From the broad typology of fraud, there is a certain type of fraud that deserves special attention, namely Robin Hood fraud. Some of the solutions proposed in the literature for its prevention and detection are those that refer to supervision and reporting mechanisms, both being ways to close the opportunities specific to internal managerial control. However, these concepts have a common element, namely perception. If in these cases we talk about employees' perception of what is considered to be ethical, in this approach we aim to show what is the perception of employees and the general public on internal managerial control and whether their perspective corresponds to the mission of this tool to eliminate opportunities for fraud.

Misappropriation of assets: A decepticon of leakages in Malaysian public sector

Decepticon, true to its name, may transform into various disguise. The villain take many forms from a flashy luxurious cars to even military vehicles. Similar to Decepticon, the episodes of misappropriation of assets in government sector runs from small misuse of stationeries to misuse of official vehicles for personal interest. It is indeed a leakage of expenditure to the government because the authority has spent unnecessary costs to cater this type of crime. Many has regarded asset misappropriation as harmless. Though the incidences might not be significant, yet, if it is left untreated, the authority will spend more money than it should. Hence, the objectives of this study is to find the empirical evidence on awareness against fraud deterrence among Malaysian public servants. As propositions, this study resolved on the inspiration that resilience against frauds can be developed through trainings, effective enforcement and control. Barrier such employees' character should be considered as deterrence for fraud awareness. Based on Rules no.4.(2)(c) of Peraturan-Peraturan Pegawai Awam (Kelakuan dan Tatatertib) 1993 (Pindaan 2002), this research employed semi-structural interview method to capture details and descriptive data so that this study is able to get the comprehensive understanding on the missing link between government inspiration and practice. 4 public servants ranging from 1 to 20 years of service have been selected for our preliminary studies to validate our research propositions. In effect, despite of that the policy is massively available in the government's portal, the respondent claimed that they were not familiar with Rules no.4.(2)(c) and their decisions on the do's and don'ts are entirely dependable on their faith and internal strength. Mentality of public servants is identified as key barrier towards awareness of fraud deterrence. There were few studies on fraud deterrence in Malaysian public sector. This study focus on the same scenario, yet supplemented with a study on fraud awareness amongst the government servant.