Abstract
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 was 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.
Highlights
The 2020 Global Economic Crime Survey by PricewaterhouseCoopers shows fraud and economic crime is on the rise in Malaysia, which demands urgent actions to be taken
This study examined the views of internal public auditors, being government officials who are often regarded as independent and skilled professionals, towards fraud prevention and detection effectiveness
This study aims to examine the impact of variables, namely fraud awareness, fraud prevention and detection strategies and anti-fraud technology, on the perceived efficacy of fraud prevention and detection in the Malaysian public sector
Summary
The 2020 Global Economic Crime Survey by PricewaterhouseCoopers shows fraud and economic crime is on the rise in Malaysia, which demands urgent actions to be taken. Considering that the public pay taxes to the government in return for services provided, constituents will lose confidence in government leadership if fraud is not treated seriously enough Such issues create an imperative need for the government officials to improve fraud prevention and detection methods to reduce the catastrophic incidence of organizational fraud. Due to the fraudulent financial reporting cases that have created great concern, fraud prevention and detection in the public sector remain critical. It is the objective of the study to investigate whether fraud awareness, fraud prevention and detection strategies and anti-fraud technology have any significant relationship with the perceived efficacy of fraud prevention and detection in the public sector. The result implies the significance of fraud awareness, and possessing the required knowledge and skills among accountants and auditors, as this can crucially contribute towards undertaking the appropriate detection and prevention actions and implementing effective detection and prevention strategies when confronted with fraud cases
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