An Audit Quality Inspection Scandal: Ethical Lapses in a Misguided Attempt to Alleviate Regulatory Scrutiny

In 2017, KPMG discovered that several high-ranking partners in its Department of Professional Practice (DPP) had surreptitiously obtained highly confidential information on upcoming PCAOB inspections. In obtaining this information, these KPMG partners were able to anticipate and prepare for PCAOB inspections, causing the firm’s inspection deficiency rate to plummet and its executives to tout the success of their efforts to improve audit quality. Once the firm discovered the scandal, the individuals involved were terminated, and six of them were ultimately convicted of felonies. This case study introduces students to relevant auditing standards, audit quality concepts, and facilitates discussion of a number of ethical issues. Learning objectives for this case include obtaining an understanding of the PCAOB and its inspection program, understanding audit documentation standards, demonstrating the ability to evaluate ethical issues, applying the fraud triangle in a unique setting, and assessing responsibility for the various parties involved.

Deteksi Kecurangan Laporan Keuangan Dan Upaya Penanganannya Pada Bank Perkreditan Rakyat

Penelitian ini dilakukan dengan tujuan untuk memberikan gambaran dalam mendeteksi kecurangan laporan keuangan dengan memperhatikan gejala-gejala (redflags) kecurangan yang muncul serta dapat menjadi masukan pada saat memberikan kebijakan untuk meminimalisir terjadinya fraud pada Bank Perkreditan Rakyat. Penelitian ini menggunakan pendekatan kualitatif dan teknik analisis data menggunakan deskriptif yang mengungkapkan karakteristik yang ada pada situs penelitian. Informan meliputi pimpinan cabang dan masing-masing penyelia unit yang berkaitan. Hasil penelitian menunjukkan bahwa gejala-gejala potensial yang timbul meliputi adanya tekanan yang berlebih dari pimpinan, ketidakefektifan pelaksanaan monitoring, minimnya pemisahan tugas, ketidakpuasaan terhadap pekerjaan yang dimiliki saat ini, perubahan perilaku dan gaya hidup. Hasil temuan redflags kemudian dikeroleasikan dengan teori segitiga kecurangan dan disimpulkan bahwa faktor peluang merupakan faktor yang paling butuh perhatian khusus. Upaya yang dilakukan untuk meminimalisir terjadinya kecurangan dilakukan dengan 2 cara yakni upaya preventif (menjadikan budaya organisasi yang jujur dan meningkatkan kualitas pengendalian internal) serta melakukan upaya represif (memberikan sanksi sesuai peraturan yang berlaku). This study was conducted with the aim of providing an overview in detecting fraudulent financial reports by paying attention to the fraud red flags symptomps that appear and can be used as input when providing policies to minimize the occurrence of fraud in Rural Banks. Informants include branch leaders and each related unit supervisor. This study uses primary data with descriptive qualitative research methods. The results showed that the potential symptoms that arise include changes in behavior and lifestyle, ineffective monitoring implementation, lack of segregation of duties, dissatisfaction with the current job. The findings of red flags were then correlated with the fraud triangle theory and concluded that the opportunity factor is the factor that most needs special attention. Efforts that is used to minimize the occurrence of fraud were done in 2 ways, preventive efforts such as creating an honest organizational culture and improving the quality of internal control. and the repressive efforts be like giving punishment according to applicable regulations.

The Dark Side of Environmental Sustainability in Projects: Unraveling Greenwashing Behaviors

Greenwashing behaviors (GWBs) are positive environmental communications in combination with poor environmental performance. Using fraud triangle theory, this study investigated the effects of three types of factors (pressures, opportunities, and rationalizations) that shape contractor GWBs. Primary data from 586 respondents were analyzed using structural equation modeling (SEM) and fuzzy-set qualitative comparative analysis (fsQCA). The SEM results indicate positive effects for these factors with the exception of isomorphic pressures and reveal the mediating role of rationalization. The fsQCA results present three configurational models that trigger GWBs. Theoretical and managerial implications are provided that shed new light on facilitating environmental sustainability in projects.

The international fraud triangle

Purpose Fraud omnipresent in the media, the corporate world and the academic literature has attracted a great deal of research interest. Fraud and its various types and forms have been characterized as significant contributing factors to the development of severe financial crises. Recurrent financial crimes in both the private and the public sectors remind us that fraud and its negative consequences paralyze economic entities all over the world. Understanding the multidimensional nature of fraud is key to prevent and detect it. This paper aims to examine the dominant fraud triangle model framework and its variants developed in the accounting literature to provide the etiology of fraud. Design/methodology/approach Having identified the fraud theory developed so far, we provide a theoretical framework for international fraud triangle. Findings Understanding the multidimensional nature of fraud is key to prevent and detect it. This paper examines the dominant fraud triangle model framework and its variants developed in the accounting literature to provide the etiology of fraud. Drawing on theoretical insights and useful criticism of the fraud triangle, this paper proposes an international fraud triangle model framework to help auditors, managers, regulators and academics in understanding fraud holistically in the private and public sector in a global context. The authors finally provide an overview of fraud in the Greek Context. Originality/value This paper proposes an international fraud triangle model framework.

Can the Fraud Triangle Detect Financial Statement Fraud? (An Empirical Study of Manufacturing Companies in Indonesia)

This study examines the effect of the following factors on financial statement fraud: (1) external pressure, (2) personal financial need, (3) financial targets, (4) the nature of industry, (5) ineffective monitoring, and (6) rationalization. The population in this study consisted of companies listed on the Indonesia Stock Exchange (IDX) over the period 2016-2018. The analysis was conducted with the help of the logistic regression method.The results of this study indicate that external pressure, financial targets and the nature of industry have an effect on financial statement fraud, while personal financial need, ineffective monitoring and rationalization have no effect on financial statement fraud. Thus, this study contributes to the understanding that not all aspects of the fraud triangle can detect fraud.

An Investigation into Contract Cheating in Tertiary Education, and How to Combat the Problem in a United Arab Emirates Context

This review article investigated the pervasive problem that contract cheating presents in higher education in the United Arab Emirates (UAE), and aimed to discover whether a solution could be found to combat the growing use of essay mills among students in the region. This literature review aimed to answer the following research questions; why do students use essay mills? Is current university student academic support adequate to facilitate branch campus learning at a level equivalent to a home campus? What methods can international branch campuses in the UAE employ to discourage the use of essay mills? What type and levels of services can universities provide in the future that better support students and stop them from becoming potential essay mill users? The point of the research was to find a means by which students can be dissuaded from using contract cheating sites by becoming so well-supported, and so aware of the threat that contract cheating poses to the value of their degree, that essay mills become a much less attractive option. The study began with a look into the possible circumstances that lead a student to cheat, which includes exploring the fraud triangle theory, the peer behaviour theory, the planned behaviour theory, and the subsequent methodology used. The study found a variety of reasons students cheat, citing laziness, a lack of ability or adequate depth of academic vocabulary in a second language learner, peer pressure, that it is so easy and convenient to use such sites, and the fact that there is a promise of plagiarism free work with a click of a mouse and simple financial transaction (Clarke & Lancaster, 2013). Furthermore, online contract cheating presents a significant challenge for higher education institutes to keep a check on standards and quality assurance. Many teachers are either unaware of or simply afraid to follow up on instances of contract cheating for fear of recriminations in the form of poor feedback or possible student dropout rates.

The effects of Electronic Salary Paying Voucher System on Undeserved Salary Compensation of Employees within Ghana Education Service

Ghana Education Service is believed to be the department with the highest level of undeserved compensations and other related payroll fraud. This is because the Auditor General Report (2018) noted that Ghana Education Service is the common department for the menace of Salary Grade Mismatches which included some 1,200 employees across board. This paper is born with the purpose of Assessing the Impact of the E-Salary Payment Voucher system and Payroll Headcounts/Audits in the elimination of Unauthorized Compensations in the two Kasena-Nankana Districts of Upper East Region of Ghana. Research questions for the study focused on the relationship between undeserved compensations which is the dependent variable and the independent variables include; payroll audits and the E-Salary Payment Voucher system. This study employed the fraud triangle theory as the basis for its experiment. The study also utilized the non-probability quota sampling method to select 102 users of the E-SPV system for a cross sectional survey in Ghana Education Service. Significant findings of the study include, validators or users of the E-SPV system are partly mandated to protect the public purse and hence the power to allow the prevalence of undeserved compensations is also in their hands. Recommendations emanating from the study seek to unpin that there should be an annual system audit of the Electronic Salary Payment Voucher at various management units to ensure that it reflects the true and fair view of the compensations given to staff at various cost centers in Ghana Education Service.

The Effect of Pressure, Opportunity, Rationalization, Gender, and Workload on The Action of Fraud

This research aims to test the effect of financial pressure, opportunity, rationalization (fraud triangle), gender, and workload on the action of fraud. The data used in this research is the primary data using questionnaires that were distributed to 60 respondents with the technique of sampling slovin. The respondent of this research is an academic community of regional work unit of Department of Accounting, Faculty of Economics and Business, Yogyakarta "Veteran" National Development University. This research using quantitive methods such as multiple linear regression analysis. This research found that the action of fraud is not affected by pressure, opportunity, rationalization, gender, and workload.