Association Of Certified Fraud Examiners Research Articles

The Fraud Goes On: The Effects of Fraud Duration, Victim Organization Type, and Perpetrator Status

ABSTRACT When occupational fraud is detected, the organization—the victim in the fraud case—decides whether or not to terminate and/or refer the case to law enforcement for possible prosecution. We use survey data collected by the Association of Certified Fraud Examiners (ACFE) to examine the impact of fraud duration, organization type, and perpetrator status on a victim organization’s decision to pursue a particular punishment outcome against the principal perpetrator. We find that fraud duration is an important attribute in determining whether and how victim organizations pursue punishments. Furthermore, fraud duration interacts with victim organization type and with perpetrator status to influence the punishment outcome selected by the victim organization. Our study contributes to the fraud literature by considering the interactions between perpetrator and victim organization characteristics on punishment outcomes and has practical implications for victim organizations and the certified fraud examiners who advise them. Data Availability: Data are available from the Association of Certified Fraud Examiners (ACFE). JEL Classifications: M40; M41; M49; L32; L33.

An Examination of Occupational Fraud Committed by Information Technology Professionals

ABSTRACT To keep up with the demands from increasingly complex systems, information technology (IT) departments have sought IT professionals and frequently provided these individuals with privileged access to organizational systems early in their tenure. This study uses survey data obtained from the Association of Certified Fraud Examiners (ACFE) Research Institute, to examine occupational frauds committed by IT professionals versus frauds committed by non-IT personnel. The differences between IT and non-IT personnel can have an impact on organizational fraud. Findings show that IT perpetrators engage in fraud earlier in their tenure and generate similar losses to their non-IT counterparts but in shorter time frames. Organizational managers and forensic accountants should be aware of these important differences and consider the use of monitoring controls, such as management reviews of access and user activity, to detect fraud committed by IT perpetrators. This study provides several suggestions for future research in this vein. Data Availability: Data are available from the Association of Certified Fraud Examiners (ACFE). JEL Classifications: M480; L860; L250.

Evaluasi Peranan Audit Internal pada Penerapan Strategi Anti Fraud

This research stems from the enormity of the threat of fraud that can be experienced by any company so it is considered a risk inherent in every company, especially the banking industry. This is shown in the report published by the Association of Certified Fraud Examiners (ACFE) in 2022 which recorded 2,110 cases of fraud in 133 countries across various industries, with the financial or banking industry being the industry victim with the highest number of cases. This research was conducted to evaluate the implementation of anti-fraud strategies in the companies under study to reduce the possibility of fraud occurring and also to identify the role of internal audit in implementing this strategy as one of the company's reliable early detection media. This research was conducted to explore the phenomenon of fraud using a research strategy in the form of a case study type of evaluation at PT. BCD as the company that is focused in this research.. The results of this study explain that PT. BCD, the company under study, has implemented an anti-fraud strategy that at least meets the minimum requirements for its implementation but is unable to instill a culture of the importance of implementing an anti-fraud strategy at every level of position and the company also does not carry out Internal Audit obligations for all aspects of implementation, resulting in weaknesses in the internal control system. Because the application of an anti-fraud strategy alone is not enough to reduce the threat of fraud.

EVOLUTION OF FRAUD-RELATED THEORIES: A THEORETICAL REVIEW

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

Peranan Audit Forensik Dalam Pencegahan Kasus Fraud Penerbitan Izin Usaha Pertambanga (IUP) Pemerintahan Daerah

Fraud is a latent danger that threatens a country. The occurrence of fraud (cheating) in the public and private sectors has an extraordinary loss impact. Research results from the Association of Certified Fraud Examiners (ACFE) Global show that every year an average of 5% of the organization's revenue becomes a victim of fraud. Fraud is an unlawful act that is intentionally carried out for a specific purpose (manipulation or giving false reports to other parties) carried out by people from inside or outside the organization to gain personal or group benefits that directly or indirectly harm other parties. The research uses qualitative methods with data collection methods using literature studies. The object of this research is secondary data in the form of fraud against licensing by local governments. For this reason, the role of forensic audits is the best way to prevent and detect fraud. Forensic audits have the ability to provide statements in their expertise.

Financial Fraud Detection by Analyzing online Transaction

–Financial fraud is commonlyrepresented by the use of illegal practices wherethey can intervene from senior managers until payroll employees, becoming a crime punishable by law. There are many techniques developed to analyze, detect and prevent this behavior, being the most important the fraud triangle theory associated with the classic financial audit model. In order to perform this research, a survey of the related works in the existing literature was carried out, with the purpose of establishing our own framework. In this context, this paper presents Financial FraudDetection Scheme, a conceptual framework that allows to identify and outline a group of people inside an banking organization who commit fraud, supported by the fraud triangle theory. Financial Fraud Detection Scheme works in the approach of continuous audit that will be incharge of collecting information of agents installed in user’s equipment. It is based on semantic techniques applied through the collection of phrases typed by the users under study for later being transferred to ar epository for later analysis. This proposal encourages to contribute with the field of cybersecurity, in the reduction of cases of financial fraud. Index Terms- financial fraud, Cyber security, NTRODUCTION Fraud is a worldwide phenomenon that affects public and private organizations, covering a wide variety of illegal practices and acts that involve intentional deception ormisrepresentation. According to the Association of Certified Fraud Examiners(ACFE) [1] fraud includes any intentional or deliberate act of depriving another of property or money by cunning, deception or other unfairacts.

The role of the audit committee and employee well-being in controlling employee fraud

Fraud is still a problem in the banking industry. Association of Certified Fraud Examiners (ACFE) reported that banks experienced the highest number of fraud cases compared to other types of businesses. This study aimed to demonstrate the effect of the audit committee’s size, gender, expertise, independence, and employee well-being on employee fraud. The study on fraud uses questionnaire data to identify employee fraud (Fathi, Ghani, Said, & Puspitasari, 2017; Nawawi & Salin, 2018). We complement the previous study by using the number of cases as an indicator of employee fraud. Using a sample of 14 Islamic banks, we find that audit committee members’ accounting expertise and employee well-being can influence employees’ willingness to commit fraud. After overcoming the problem of endogeneity and robustness tests, the results of our study were consistent. The number of audit committee members, gender, and independence have not impacted fraud control. The expertise of the audit committee and employee well-being can be an effective internal control system in reducing fraud. This study adds to previous studies that have explained fraud by using employee perceptions and financial ratio indicators to detect director fraud. This study uses the number of employee fraud cases reported by the bank.

Implementation of Whistle-blowing System to Prevent Sharia Banking Crime in ‎Indonesia

The research conducted is qualitative research, in which the researchers examine various sources pertaining to the whistle-blowing system in Islamic banking. The focus of this research is PT. Bank Syariah Indonesia (BSI), one of the largest Islamic banks in Indonesia that aims to become one of the top ten Islamic banks worldwide within the next five years. The purpose of this study is to gain understanding and insight into how the whistle-blowing system at BSI effectively controls fraud and crime within the Indonesian banking sector. According to a survey conducted by The Association of Certified Fraud Examiners (ACFE), banking fraud in Indonesia is reported to be at a staggering 41% when compared to other sectors. This finding highlights the importance of this research for the government, stakeholders, and banking industry participants. In addition to utilizing qualitative methods, this research incorporates an analysis of the BSI website and draws support from various sources related to the whistle-blowing system in Islamic banking. It is hoped that future research will continue to examine the implications of whistle-blowing systems in preventing fraud within the banking sector, particularly within Islamic banking, not only in Indonesia but also globally.‎

Fraud Detection: Forensic Accounting Education and CFE Designation Impact on Auditor’s Confidence Levels

This study will examine the effects of the forensic accounting curriculum and certified fraud examiner knowledge on auditor's confidence level to assess fraud. The research will use statistical methods to analyze survey questionnaires from members of the Wisconsin Institute of Certified Public Accountants (WICPA) and the Association of Certified Fraud Examiners (ACFE) using a Likert 5-point scale. This study extends previous literature on the value of forensic accounting curriculum couple with forensic certification to affect independent auditor's confidence level in detecting fraud. It should be informative to regulators, academic researchers, and audit practitioners. It can serve as a shift in how accounting educators and industry professionals prepare auditors to effectively evaluate unstructured fraud cues to reduce fraud losses and save investors hundreds of dollars in economic value.

STATUS AND PERSPECTIVE OF FORENSIC ACCOUNTING IN REPUBLIKA SRPSKA / STANJE I PERSPEKTIVE FORENZIČKOG RAČUNOVODSTVA U REPUBLICI SRPSKOJ

Expert testimony is becoming one of the main validation activities in financial crime. It is also amongst the most criticized ones because it can significantly slowdown court proceedings, especially in complex expert assessments, which is often the case with economic and financial subjects. Forensic accounting experts, which are also known as forensic accountants, are increasingly being hired to provide expert evaluation on these subjects. Republika Srpska recognized the need for this profession timely by granting it legal legitimacy.However, little progress has been made in its implementation in practice. This paper analyzes requirements and state of forensic accounting in Republika Srpska, and accordingly makes recommendations for further improvements such as gathering information of better quality that would help in financial investigations. Profession of forensic accountant is interdisciplinary and covers full range of different services, which signals the necessity to unify the criteria globally. So far, no such criteria exist nor are there any indications harmonization. Standard for required knowledge has been set by the American Association of Certified Fraud Examiners (ACFE), which certifies financial forensic professionals with certificate in forensic accounting. The established criteria offer a solid basis for the detection, collection and presentation of evidence in the financial fraud expert process. Currently it remains unclear whether the forensic accountant acts alone or as part of an interdisciplinary team.The knowledge currently offered by educators in Republika Srpska cannot bring quality in specific types of services, which primarily require specialist knowledge. For each type of service, it is necessary to define the characteristics, required knowledge and skills that a forensic accountant must possess. In accordance with such requirements, educational programs for forensic accounting need to be modified by providing guidance on their homogenization. Educational programs must be consistent with the actions of other participants in the implementation of forensic accounting, such as users, providers, educators, etc. With synergistic action, it is possible to raise the professional competence of the forensic accountant and align it with the requirements of the market. The ultimate educational outcome is to educate a forensic accountant so that he or she has specialist knowledge in accounting, law and auditing, as well as skills in the effective forensic accounting. Forensic accounting requires continuous learning and skills acquisition in accordance with the guidelines of international standards and recommendations, as well as good practical application. The aim of this paper is to promote forensic accounting and the profession of forensic accountant as an expert with specialist knowledge and skills.The future focus should be on improving the professional integrity of expert witnesses relating to more complex economic crimes, accelerating final report preparation, enhancing supervision of expert witnesses and their work, and sanctioning unprofessional behaviors.

2018 REPORT ON OCCUPATIONAL FRAUD: RESULTS AND HOW COMPANIES CAN PROTECT THEIR ASSETS

The Association of Certified Fraud Examiners (ACFE) published their study on occupational fraud and abuse this past year. The study, which is its tenth edition, is the most comprehensive study on occupational fraud and abuse. Its findings give great insight into- among other things- who commits fraud, why they commit fraud, and how companies can protect themselves to deter and detect fraud. This paper will look at the major findings of the study. In addition, the paper will make practical suggestions that companies could implement to deter and detect fraud, with a special focus on internal controls and internal control activities.

The Show Must go on! Legitimization Processes Surrounding Certified Fraud Examiners’ Claim to Expertise

This article investigates how the Association of Certified Fraud Examiners (ACFE) sought to gain legitimacy among its members as a group possessing expertise in the prevention and detection of fraud. Using theoretical concepts devised by Goffman [1959. The presentation of self in everyday life. Garden City, NY: Doubleday] about performance and impression management, the ACFE’s performance is studied from the perspective of the show put on by the association’s leaders, and through our analysis of the response to this show from its members. Thanks to sophisticated data collection (ethnographic endeavor, interviews with CFEs, and document analysis), we found that the ACFE’s promotional machinery comprises pragmatic, moral, and epistemic claims. Our analysis indicates that pragmatic legitimacy plays a central role in enrolling members as ambassadors of the CFE designation – in spite of the skepticism that they tend to have regarding the association’s moral and epistemic claims. We are therefore confronted with a spread of claims to expertise taking place despite a degree of internal discordance – as if member discomfort with certain aspects of their association’s discourse is immaterial to the construction of the association’s external legitimacy. Ultimately, our findings lead us to reflect on the social value associated with the spread of credentialism in today’s society.

Prevention of Fraud in Sharia Banking in Indonesia through Implementation of Sharia Corporate Governance

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Pengaruh Profitabilitas, Likuiditas, Leverage, dan Corpo-Rate Governance Terhadap Kecurangan Laporan Keuangan, Serta Financial Distress Sebagai Variabel Intervening

This paper examines the affect of profitability, liquidity, leverage, and corporate governance to financial statement fraud, and financial distress as a intervening variable. Based on Association of Certified Fraud Examiners (ACFE) 2016, financial statement fraud was growth from 2012 – 2016, it’s mean more companies have a motivated to do manipulate financial statement. In this paper, financial distress as a intervening variable before companies manipulate financial statement. We conclude profitability, leverage, shareholding, number of boards are significant to financial distress. Finally financial distress is significant to financial statement fraud

Solving the “Mystery” of Profiling Fraud: Teaching Students About Occupational Fraud by Examining Episodes ofMystery Diners

ABSTRACTStudents learn about the many different aspects of occupational fraud by reading the Association of Certified Fraud Examiners (ACFE) Report to the Nations on Occupational Fraud and Abuse (Report) and applying what they learn to one of two episodes of the television show Mystery Diners, which features an undercover fraud investigation in a restaurant setting. Applying the ACFE Report to a setting generally familiar to students helps them gain insight into occupational fraud. Pre-/post-test and survey results reveal that students significantly increased their knowledge of how occupational fraud is committed and detected, traits of victim organizations, characteristics of perpetrators, and case results (what actions are or are not taken against perpetrators) across two different episodes and two editions of the ACFE Report. Feedback shows students found the case valuable and enjoyable and would find more cases like this beneficial. Instructors can modify the case for other episodes (more than 100 are available) and further editions of the ACFE Report to help students learn about occupational fraud.

AIM Corporation: A Business Fraud Case Study

ABSTRACT The Association of Certified Fraud Examiners (2016) indicates that asset misappropriation is the most common form of occupational fraud. Based upon a real company, this case contains six frauds: collusions, commissions, fictitious sales, rebates, refunds, and write-offs. It also includes several asset misappropriation (e.g., theft of cash, misuse of inventory, and fraudulent reimbursement) schemes. Furthermore, four of the six frauds are not found in other published case studies. The case seeks to enhance learning by having students (1) examine multiple fraudulent schemes within a single company, (2) identify frauds after examining firm procedures and documents, (3) suggest applicable fraud protection procedures, (4) identify internal control weaknesses, and (5) apply the fraud triangle. Undergraduate and graduate students from two universities performed well on the case.

GOOD SCHOOL GOVERNANCE IMPLEMENTATION THROUGH THE ESTABLISHMENT OF INTERNAL CONTROL UNIT

This article describes the phenomenon of fraud occurring due to weak internal control system. Based on a study conducted by the Association of Certified Fraud Examiners (ACFE), one of the major causes of fraud is lack of internal control, or 29%, and override of existing internal control, or 20%. (ACFE, 2016). The phenomenon of fraud is still verycommon in Indonesia. Poor organizational governance is also part of the major causes of fraud. Corruption in Indonesia has spread to all sectors, including the education sector. There are many cases of corruption occurring in schools involving principals, treasurers, and teachers. The world of education in Indonesia is severely tarnished by the involvement of teachers in several cases of fraud. If this continues, the world of education will no longer be a role model. Improved organizational governance is necessary for early detection of fraud. This is intended to save Indonesia, especially education sector. The establishment of Internal Control Unit in schools is crucial because the Internal Control Unit serves not only as the implementation of good school governance but also as a tool to prevent fraud at schools.

Кореляція у формі проміжної змінної між рентабельністю, ліквідністю, кредитним плечем, корпоративним управлінням та тяжким фінансовим станом або шахрайством із фінансовими звітами

Financial statement can show the company management performance after human resource trust. Each public company is obligated to reveal the annual financial report. This research examined correlation among profitability, liquidity, leverage and corporate governance to financial statement fraud and financial distress as mediation variable. Based on the Association of Certified Fraud Examiners (ACFE) 2016, the financial statement fraud continuously grew from 2012-2016. It means that there were more companies having financial statement fraud motivation. In this research, financial distress had been a mediation variable before the financial statement fraud event. This research applied quantitative research using the fraud diamond theory. This research proved that there was an impact of profitability, leverage, shareholder > 3% and directors quantity to financial distress. This research showed that the higher company’s profitability, the lower financial distress company risks. Based on the research, the companies that had financial distress would tend to do the financial statement fraud.

Collusive Fraud: Leader, Incident, and Organizational Characteristics

ABSTRACTMany parties have pointed to the difficulty of preventing collusive fraud, as well as the large losses caused by collusion. However, relatively little is known about how collusive fraud differs from solo-offender fraud. To begin to fill this gap in the literature, this exploratory study examines differences between collusive fraud and solo-offender fraud, focusing on characteristics of the leader (perpetrator), incident, and organization. We use survey data collected by the Association of Certified Fraud Examiners (ACFE) on worldwide fraud cases from 2002 to 2013. The results highlight a number of unique dimensions of collusive fraud, including that collusive fraud leaders are more likely to be younger males with close ties to customers or vendors and a wheeler-dealer attitude. We discuss future research directions and implications for practice.

The escalating relevance of internal auditing as anti-fraud control

PurposeThe purpose of this paper is to discuss critical success factors for the enormous development that internal auditing (IA) as “third line of defense” (IIA, 2016) and one of the strongest anti-fraud controls has reached within the past decades. Additionally, weaknesses of IA are identified and evaluated to allow further improvement.Design/methodology/approachThe anti-fraud requirements stipulated in the “International Standards for the Professional Practice of Internal Auditing” are confronted with empirical data about the current situation of the IA as anti-fraud control. The empirical data were extracted from global sources such as “Fraud Reports” (Association of Certified Fraud Examiners – ACFE) and “common body of knowledge (CBOK)” studies. The Institute of Internal Auditors (IIA).FindingsOver the years, IA has been continuously increasing its auditing quality and effectiveness with new analytical methods, specialized software tools and professional certifications. But all these efforts have hardly been reflected in statistical or research data, especially not in the listing of the top sources of fraud detection. The “ACFE-Fraud Report 2016” revealed that IA is now – for the first time ever – second among the initial detections of occupational frauds (financial statement fraud, corruption and asset misappropriation) worldwide. This positive trend of global anti-fraud auditing was probably no “one-hit wonder”, but a result of a lengthy process of professionalization of IA.Originality/valueIt is hoped that this paper will facilitate the discussion about the value that IA can add within an anti-fraud management system.