Author

  • Shabnam Fazli Aghghaleh

    • Universiti Kebangsaan Malaysia, Malaysia
    • Malaysia

  • Takiah Mohd. Iskandar

    • Universiti Kebangsaan Malaysia, Malaysia
    • Malaysia

  • Zakiah Muhammaddun Mohamed

    • Universiti Kebangsaan Malaysia, Malaysia
    • Malaysia

Abstract

The current research studies the usefulness of Cressey’s fraud risk factor framework adopted from SAS No. 99 to prevent fraud from occurring. In accordance with Cressey’s theory, pressure, opportunity and rationalization are existing when fraud occurs. The study suggests variables as proxy measures for pressure and opportunity, and test these variables using publicly available information relating to a set of fraud firms and a sample of no-fraud firms. Two pressure proxies and two opportunity proxies are identified and suggested to be significantly related to financial statement fraud. We find that leverage and sale to account receivable are positively related to the likelihood of fraud. Audit committee size and board of directors’ size are also linked to decrease the level of financial statement fraud. A binary logistic model based on examples of fraud risk factors of fraud triangle model measures the likelihood of financial statement fraud and can assist experts.

Keywords

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How to Cite

Aghghaleh, S. F., Iskandar, T. M., & Mohamed, Z. M. (2014). Fraud Risk Factors of Fraud Triangle and the Likelihood of Fraud Occurrence: Evidence from Malaysia. Information Management and Business Review, 6(1), 1-7. https://doi.org/10.22610/imbr.v6i1.1095

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Copyright (c) 2014 Shabnam Fazli Aghghaleh, Takiah Mohd. Iskandar, Zakiah Muhammaddun Mohamed (Author)

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Research Paper

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Vol. 6 No. 1 (2014) Fraud, Strategy & Blended Learning View issue contents

Published

2014-02-28

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