EVOLUTION OF FRAUD-RELATED THEORIES: A THEORETICAL REVIEW

Abstract

Background and Purpose: Association of Certified Fraud Examiners (ACFE) in their report projected that over 4.5 trillion dollars are globally lost due to fraud, with individual organizations losing about 5 per cent of their revenues to fraud annually. Thus, organizations need to understand what contributes to fraud from an individual to organizational perspective, so that strategies to mitigate fraud are formulated. The objective of this paper is to identify various fraud-related theories used in research and their evolution. Subsequently, this study tries to identify the most commonly used fraud theory, approach and unit of analysis.
 
 Methodology: This paper employed a systematic review process and the name of the theory was used as the keyword in the Scopus database to identify papers that discussed the theories. A total of 342 papers were initially identified and analysed after which repeated papers were eliminated. Following this, 39 most recent papers were further analysed to identify the most common theories, research approaches and units of analysis, used in fraud research.
 
 Findings: The analysis found that fraud theories comprised of theories discussing individual factors and organizational factors, which contribute to fraud. The findings further reveal that the Fraud Triangle Theory is the most frequently applied theory in fraud research, where quantitative approach is most adopted with individuals as a unit of analysis.
 
 Contributions: This paper contributes to the growing interest in the study related to fraud by providing a comprehensive analysis of theories related to fraud by bringing together most commonly used theories in fraud research.
 
 Keywords: Fraud theories, theoretical review, social control theory, theory of reasoned action, theory of planned behaviour.
 
 Cite as: Rasheed, F., Said, J., & Khan, N. I. (2023). Evolution of fraud related theories; a theoretical review. Journal of Nusantara Studies, 8(TI), 322-350. http://dx.doi.org/10.24200/jonus.vol8issTIpp322-350