Determinants of financial reporting fraud intention among accounting practitioners in the banking sector

Abstract

PurposeThis study aims to examine the influence of attitude, subjective norm and ethical judgement on unethical financial reporting intention among Malaysian accounting practitioners in the banking industry.Design/methodology/approachFor achieving the objective, a questionnaire survey was used. With the inclusion of 121 samples of participants in the financial reporting process, data analysis was conducted using partial least square structural equation modelling (PLS-SEM).FindingsThe results indicate that attitude, subjective norm and ethical judgement are significant in influencing unethical financial reporting intention, with ethical judgement having the smallest effect on such intention.Practical implicationsThe findings of this study are useful in guiding the management and regulators to develop strategies to curb the occurrence of unethical financial reporting. This study also gives some insights to the public, especially the banks’ shareholders and depositors, into the unethical financial reporting intention of actual participants in the financial reporting process, who are being entrusted to handle the reporting affairs of banking institutions.Originality/valueThis study is the first to examine the factors influencing accounting practitioners’ intention to financial reporting fraud in a Malaysian banking setting. As it examines the actual participants in the financial reporting process, the results contribute towards a better understanding on unethical financial reporting intention within banking institutions as highly regulated industry. Additionally, it provides evidence for the suitability of the PLS-SEM in statistical analysis.