Fraud Cases Research Articles

Framing Analysis: Do Illegal Online Loans Have Fraud

This study aims to examine how the framing of news illegal online loan fraud in online mass media which is then used as information to find out the causes of the fraudulent practices. The Pan and Kosicki framing analysis method, which was extended with the fraud hexagon theory, were used. The sites in this study were online mass media, particularly tribunnews.com and kompas.com, reporting cases of fraud committed by illegal online lending companies. The results of the framing analysis on the news published by Tribunnews.com show that illegal online lending companies have committed fraudulent practices to their customers and their existence is very disturbing to the public. Kompas.com uses a more preventive method by revealing the ways that the people should do to avoid these traps and fraud. The results of the analysis using the fraud hexagon theory show that fraudulent practices committed by illegal online lending companies are caused by pressure from capital owners, information technology capabilities owned, broad market opportunities, rationalization that people need fast funds, ego, and binding agreements as a form of collusion. The increasing role of the government in providing protection for the public in online transactions is an important implication of this research.

A Teaching Case: Applying Benford’s Law to Detect Credit Card Fraud Using Microsoft Excel

ABSTRACT Benford’s Law has been frequently used for fraud detection and is introduced in various accounting, auditing, and analytics courses. Instead of using specialized computer-aided auditing tools, this teaching case purports to apply Microsoft Excel to demonstrate the process, applicability, and benefits of Benford’s Law by analyzing publicly available datasets on confirmed COVID-19 and credit card fraud cases. This hands-on exercise also enhances students’ Excel skills to extract, transform, and load (ETL) data and use various data visualizations (e.g., pie/100 percent stacked/combo charts) to display proportional information. This case provides an engaging learning experience that matches student skill levels, stimulates critical thinking, and fosters interest in forensic accounting. Data Availability: Data are available from the authors upon request. JEL Classifications: M42; M41; I20.

The Influence of Internal Control and Good Corporate Governance Implementation on Fraud Prevention

This research is motivated by the many cases of fraud in the banking sector in Indonesia. The results of the 2019 Indonesian Fraud Survey stated that the fraud that occurred was caused by internal control factors and the implementation of good corporate governance. This research aims to determine the influence of internal control and the implementation of good corporate governance on fraud prevention in general banking in The research method used in this research is the verification method. The population in this research are internal auditors who work at commercial banks in the Jakarta and Bandung areas. The sampling technique used was a probability sampling technique with a simple random sampling technique, and used the Slovin formula so that the total sample was 47 internal auditors in the Jakarta and Bandung areas The data analysis used is multiple linear regression analysis using the SPSS program. Research results Simultaneously, Internal Control and the implementation of Good Corporate Governance have an effect on fraud prevention. Partially, the implementation of internal control has an effect on fraud prevention. Partially, the implementation of good corporate governance has an effect on prevention

Fraud risk assessment in car insurance using claims graph features in machine learning

The article proposes a process for claims assessment in car insurance, which makes it possible to calculate the fraud rate on the annual set of claims using a reduced set of attributes and graph vertex properties. This approach improves the security of insurance companies’ assets against fraudulent attacks. A method for constructing a claims graph and extracting additional features from it for evaluation is described. It is shown that in order to build a graph, it is not necessary to have data on the connection of the claim participants. Two tests were carried out on a real opensource datasets with labelling of fraudulent cases. The results of the first one show the increase in classification metrics when using attributes obtained from the graph. The application of the proposed approach resulted in doubling the area under the Precision-Recall curve. The experimental results demonstrated high quality metrics for fraud detection, with a Recall rate of 83.33% and a Specificity rate of 91.05%. The second test confirmed the possibility of determining the insurance fraud level based on decision rule, which includes the condition of claims being connected to each other. The rule is able to detect claim groups with a high concentration of fraud, in which every second participant is a fraudster.

Research on Financial Fraud in the Supply Chain of NianFu Company Under Performance Commitment - From the Perspective of Business Ethics and Accounting Professional Ethics

With the vigorous development of China's economy, business ethics in the field of market economy has become the focus of social discussion. In recent years, cases of financial fraud to realize their interests are common, disrupting the healthy development of the capital market and damaging the vital interests of small and medium-sized investors. This paper takes the typical illegal case of the securities regulatory inspection in 2021 - the financial fraud case of the Nianfu supply chain as an example. First, the basic situation of the case is introduced; Secondly, it exposes the means of financial fraud and analyzes the motivation of fraud based on the triangle theory of financial fraud, and finds that enterprises commit financial fraud out of financing needs and under the pressure of performance commitment. Finally, it analyzes the behavior of financial fraud in violation of business ethics and accounting professional ethics, and puts forward corresponding countermeasures and suggestions.

Law Enforcement for Fraud Offenders on behalf of Banks Through Online According to Islamic Criminal Law

This research aims to find out the modus operandi of criminal fraud on behalf of banks through online, to find out law enforcement for fraud perpetrators on behalf of banks through online at the North Sumatra Regional Police, and to find out the review of Islamic criminal law in fraud cases on behalf of banks through online. This research uses a qualitative empirical research strategy in the field of law. Interviews with members of the North Sumatra Regional Police became the main data source, while literature surveys of online journals, papers, and articles related to fraud legislation became secondary data. Data reduction, data presentation, and conclusion drawing are the three stages of qualitative data preparation. Article 378 of the Criminal Code can be used to regulate the crime of online fraud, according to the above study. To strengthen the legal basis, Article 28 paragraph (1) of the ITE Law can be followed. Islamic criminal law, which is based on hadith and the Quran, does not provide clear guidelines on how to deal with internet fraud involving banks. Islamic law includes general principles that should be followed, and their application depends on the interpretation of local scholars or religious authorities. In the case of online fraud on behalf of a bank, which is included in the crime of fraud, it can be subject to ta'zir punishment such as a stern warning, a material fine whose amount is adjusted to the victim's loss, imprisonment, flogging, or also exile from society for a while.

Business Ethics and Accounting Professional Ethics in Financial Fraud

With the rapid development of China's economy and the increasingly perfect capital market system, listed companies have emerged like mushrooms after rain. However, behind the light and in the dark, cases of financial fraud by listed companies are not uncommon, without exception in all levels of the market, which has brought a series of negative impacts to all parties. In essence, financial fraud is a purposeful earnings management behavior that violates legal principles. The lack of professional ethics among accounting personnel, inadequate internal supervision of enterprises, and imperfect industry legal construction are all root causes. This article analyzes the responsibility issues of violating business ethics and professional ethics in financial fraud, and draws inspiration from it that listed companies should first ensure the essence of their own business ethics and professional ethics.

Research on the Motivation and Governance of Financial Fraud in Zuojiang Technology Based on Risk Factor Theory

With the rapid development of the market, more and more financial fraud events have been derived, which have brought bad effects to related industries, investors and society. As a typical shell case, the fraud case of Zuojiang Technology is a microcosm of the fraud case of listed companies. This paper takes this case as the main body, combines the risk factor theory, analyzes the causes of fraud from five perspectives, and puts forward relevant risk control suggestions for the existing problems of Zuojiang Technology, hoping to make some contributions to the healthy and orderly development of the capital market.

ADULTERATION IN FOOD INDUSTRY IN 2023 - OVERVIEW

This review focuses on food fraud and shows a picture of the most critical notifications reported by the Knowledge Centre for Food Fraud and Quality worldwide during the year 2023. Knowledge4Policy (K4P) is the EU Commission's platform for evidence-based policymaking. This study aims to provide an overview of the cases of food fraud focused on specific food groups - (fish and seafood, oils and fats, fruit and vegetables, honey and sugar, meat and meat products, wine, alcohol, milk and dairy products, spices and herbs, grain-based food – cereals - bakery products, eggs, snacks, coffee, tea, cocoa, non-alcoholic beverages, dietic foods supplements, fortified food). The data on food fraud was divided based on world continents (Asia, Africa, South America, North- Central America, Australia, and Europe). The next part of our overview shows the count of food fraud incidents separately each month for 2023. Overall, 419 cases were registered worldwide in 66 countries in 2023. Most cases were registered in Europe, South America, Africa, North-Central America, and Australia. Based on our findings, we can conclude that the highest number of cases were registered in Pakistan, followed by Italy, Brazil, Nigeria, the Dominican Republic, and Australia. The most abundant was alcohol-beverages adulteration (18.13 % of the total number of cases reported in 2023 worldwide), followed by meat and meat products (15.03 %), fish and seafood (13.60 %), and grain-based food, cereals, and bakery products (11.69 %). Analysis of notification data showed that the most used type of fraud was grey market trading, mislabeling, document forgery, dilution/mixing, substitution, and unapproved enhancement. Food fraud databases serve as valuable tools for the food industry and regulatory bodies, aiding in mitigating food fraud risks.

A Conceptual Stakeholder-Based Model of Malaysia Halal Food Control System

The halal food control system is one of the critical aspects that need attention in sustaining the Malaysian halal industry. In practice, the existing halal food control system involves the roles of several stakeholders and is implemented independently according to their respective jurisdictions. No integrated control mechanism coordinates the roles of all stakeholders, thus resulting in fraud cases to easily happen in the industry. To effectively coordinate these roles, an integrated halal food control system must be developed. Therefore, this concept paper aims to discuss the roles of stakeholders involved in the halal food control system and to propose a conceptual halal food stakeholder control system model based on the objectives of the Islamic law framework. Information for this paper is gathered based on a literature review of previous studies related to the halal food control system. The conceptual model is expected to be a reference and guideline for all stakeholders involved and will serve as a theoretical foundation for future research in this area. Additionally, it can enhance consumer trust in Malaysia’s halal certification and support the country’s goal of becoming a leader in the global halal food industry.

Application of Blockchain for Secure Real Estate Management Systems

Real estate management systems are crucial for efficiently handling property transactions, ownership records, and regulatory compliance in the real estate industry. However, traditional real estate management systems face challenges related to security, transparency, and trustworthiness, leading to issues such as fraud, disputes, and inefficiencies. This paper explores the application of blockchain for secure real estate management systems, focusing on its potential benefits, implementation challenges, and use cases. Smart contracts have a superb advantage for avoiding fraud cases and instilling behaviour among the stakeholders of the system. We examine how blockchain can enhance security, streamline processes, reduce fraud, and improve trust in real estate transactions by providing a decentralized and tamper-proof platform for recording and verifying property ownership, contracts, and transactions. Additionally, we discuss the technical considerations, regulatory implications, and adoption barriers associated with implementing blockchain-based real estate management systems. This paper advocates a trustful mechanism for securing online transactions in the modern-day real estate marketplace.

Committed (dis)honesty: A systematic meta-analytic review of the divergent effects of social commitment to individuals or honesty oaths on dishonest behavior.

People feel committed to other individuals, groups, organizations, or moral norms in many contexts of everyday life. Such social commitment can lead to positive outcomes, such as increased job satisfaction or relationship longevity; yet, there can also be detrimental effects to feeling committed. Recent high-profile cases of fraud or corruption in companies like Enron or Volkswagen are likely influenced by strong commitment to the organization or coworkers. Although social commitment might increase dishonest behavior, there is little systematic knowledge about when and how this may occur. In the present project, we reviewed 20,988 articles, focusing on studies that experimentally manipulated social commitment and measured dishonest behavior. We retained 445 effect sizes from 121 articles featuring a total of 91,683 participants across 33 countries. We found no evidence that social commitment increases or reduces dishonest behavior in general. Nonetheless, we did find evidence that the effect strongly depends on the target of the commitment. Feeling committed to other individuals or groups reduces honest behavior (g = -0.17 [-0.24, -0.11]), whereas feeling committed to honesty norms through honesty oaths or pledges increases honest behavior (g = 0.27 [0.19, 0.36]). The analysis identified several moderating variables and detected some degree of publication bias across effects. Our findings highlight the diverging effects of different forms of social commitment on dishonest behavior and suggest a combination of the different forms of commitment could be a possible means to combat corruption and dishonest behavior in the organizational context. (PsycInfo Database Record (c) 2024 APA, all rights reserved).

The Influence of Corporate Governance Mechanisms on Fraud Probability: Evidence from Russian Companies

This study examines the impact of corporate governance mechanisms on the probability of corporate fraud occurrence. We evaluate the board size, the degree of independence, and the frequency of meetings of the board and its committees. We also attempt to analyse the board’s gender diversity, but since boards are not gender-diverse in Russia, the significance of this variable cannot be tested. Our empirical study is based on 160 observations of MOEX-listed Russian companies, among which fraudulent behaviour has been revealed in 32 companies over a 5-year period from 2014 to 2018. The relationship between the probability of fraud occurrence and corporate governance was investigated employing a logit model. The data was collected from firms’ annual reports and Thomson Reuters Eikon. Data on fraud cases is based on the evidence from the press (including the leading news sources and specialised websites). We detected a significant negative relationship between nomination and remuneration committee chairmen’s independence, the share of independent directors, the independence of board and audit committee chairmen and the likelihood of fraud. We also discovered the insignificant influence of board and its committees’ size and their meetings’ frequency on fraud probability. This paper contributes to the academic research on the relationship between corporate governance mechanisms and probability of fraud occurrence, emphasizing the special role of the establishment of nomination and remuneration committee chairman independence in Russian companies.

A Comprehensive Approach to Safeguard Credit Card Transactions and Fraud Prevention

The escalating prevalence of financial fraud within the financial sector poses profound challenges. Detecting credit card fraud in online transactions necessitates data mining due to inherent complexities. Addressing two key issues—evolving patterns in legitimate and fraudulent behaviors and highly skewed datasets of credit card frauds—renders the task challenging. This paper scrutinizes the performance of naive Bayes, KNN, and logistic regression on significantly imbalanced credit card fraud data comprising 284,807 transactions from European cardholders. The dataset's skewness is addressed through a hybrid under-sampling and oversampling approach. The three techniques are applied to both unprocessed and preprocessed data. Fraud detection, defined as a set of activities thwarting illicit acquisition of assets or funds through deceptive means, varies across industries and methods. Credit card fraud, particularly susceptible due to its ease and prevalence in e-commerce and online platforms, prompted the adoption of diverse machine learning strategies to combat rising fraud rates. This paper employs machine learning algorithms for credit card fraud detection, utilizing a publicly available credit card dataset for model evaluation. While acknowledging that achieving 100% accuracy in fraud detection is elusive, the paper emphasizes the real-world applicability of its findings through the analysis of credit card data from a financial institution. In addition to assessing model efficacy, the study introduces noise into the data samples to evaluate algorithm robustness. Experimental outcomes underscore the effectiveness of the majority voting method, achieving commendable accuracy rates in detecting credit card fraud cases. The study sheds light on the pressing issue of credit card fraud, emphasizing the importance of deploying robust machine learning approaches for timely and accurate detection in real-world scenarios.

Impact of Forensic Marketing on Consumer Behavior: Evidence From Beauty Products\’ Purchase Decision

Marketing firms navigate a dynamic environment characterized with volatility and complexity, where survival hinges upon adaptability and responsiveness to external forces. The pursuit of rapid growth, profit and competitive advantage in the cosmetics market often leads some companies to engage in unlawful and unethical practices, including copyright and trademark infringement and misleading marketing, which creates problems for honest consumers and the entire industry’s sustainability and leads to legal cases of fraud. This has led to the emergence of a specific type of marketing ‒ forensic marketing, characterised by a thorough check (often in a legal context) of all the facts and data accompanying marketing policy. This study examines how forensic marketing dimension influence the consumer behavior using the case study of 3 skincare products in Nigeria, including the impact of copyright violation on brand awareness, trademark infringement on consumer patronage, and the impact of misleading advertising on consumer loyalty. In solving this problem, the article analyses the provisions of the Theory of Buyer Behaviour, the Nicosia Model and the Psychoanalytic Model. The study is based on the results of an online survey of 384 Nigerian consumers of cosmetic skincare products (a five-point Likert scale was used for answers, Bill Golden technique was used to determine the sample size, Cronbach’s Alpha test was used to confirm reliability, and SmartPLS software was used for data processing). Descriptive (frequency, percentage, mean, standard deviation, and skewness) and inferential (structural equation modelling (SEM) by utilising the partial least squares (PLS) version) analyses were carried out. The modelling empirically confirms the validity of all three hypotheses: 1) respondents perceive copyright infringement as having a significant relationship with brand awareness, with the strongest impact on a product idea, moderate impact on brand name, and weak impact on promotion strategy; 2) trademark infringement practices have a significant impact on consumer patronage, with design having the strongest impact, signs and symbols having a moderate impact, and colour having a weak impact; 3) deceptive marketing practices have a significant impact on customer loyalty, with advertising having the most significant impact, product quality having a moderate impact, and labelling and packaging having a weak impact. The article emphasises the importance of regularly informing consumers about the quality and features of products, as well as encouraging whistleblowers through reward systems. By adopting ethical marketing practices, companies can build a reputation that will ultimately benefit society, strengthen their reputation, and influence consumer purchasing decisions.

Forensic Accounting Services as a tool for Fraud Mitigation in Selected Kwara State owned Tertiary Institutions in Nigeria

This study examined the impact of forensic accounting services on fraud mitigation in selected tertiary institutions in Kwara State. Specific objectives examined the impact of investigation service and digital forensic service on fraud. The study adopted survey research design. The population for the study comprised of principal officers, bursary, account/audit staff of the six selected tertiary institutions in Kwara State. Stratified Random Sampling was used comprising of 157 staff of the selected institutions. Data were collected using a structured questionnaire. Data collected were analyzed using Partial Least Square and Structural Equation Model (PLS-SEM). With a path coefficient of 0.592and 0747 respectively, findings revealed that investigation service and digital forensic service of forensic accountants have a statistically significant negative impact on fraud. It was concluded that forensic accounting services have a significant impact on fraud in tertiary institutions in Kwara State. The study recommended amongst others that tertiary institutions should adopt a comprehensive anti-fraud strategy that combines fraud prevention, detection and prompt response measures. It was also recommended that tertiary institutions should engage the services of forensic accountants at the early stage of a suspected fraud case. Keywords: Forensic Accounting, Fraud, Fraud Mitigation, Investigation Services, Digital Forensic Services, Kwara State, Tertiary Institutions, Corruption.

PENGELOLAAN DANA DESA BEBAS FRAUD: PENDEKATAN EFEKTIF DI KECAMATAN TIDORE UTARA

Fraud occurs in several sectors, including the village sector, such as fraud in the management of village funds. Village funds that were initially to improve independent villages were not appropriately managed; the management of village funds is synonymous with abuse in management; this is evidenced by the statement "Village Fund Outlook 2018" issued by Indonesia Corruption Watch (ICW) in the village fund book published by the Ministry of Finance. As a result of ICW monitoring, in 2015–2017, cases of abuse in villages increased. In 2015, it reached 17 cases and increased to 41 cases in 2016. A more than twofold spike then occurred in 2017 with 96 cases. A total of 154 fraud cases, such as corruption and misuse of assets, were found. This study was conducted with the aim of examining the influence of village apparatus competence, internal control system, accountability, and morality on fraud prevention efforts in village fund management in North Tidore District, Tidore Islands City. The respondents used were 56 people consisting of village heads, village secretaries, heads of financial affairs, heads of planning affairs, staff of the head of planning affairs, heads of service sections, staff of the head of service sections, heads of government sections, staff of the head of government sections, technical implementers, heads of hamlets, heads of RWs and heads of RT. The data analysis technique used is multiple linear regression analysis. The results showed that the competence of village apparatus and internal control system has a positive and significant effect on fraud prevention. Conversely, morality and accountability have no impact on preventing fraud in village funds.

An intelligent detecting model for financial frauds in Chinese A‐share market

AbstractFinancial frauds can cause serious damage to financial markets but are hard to detect manually. In this study, we develop an intelligent detecting model to efficiently identify financial frauds by using XGBoost on raw financial data items in corporation financial statements. With listed companies in Chinese A‐share Market taken as samples, empirical results reveal that the proposed model works better than traditional models by a large margin in detecting fraud. Notably, the proposed model exhibits superior performance when used together with raw financial data items than with financial indicators. Moreover, the proposed model remains robust on outperformance in fraud detection when serial fraud cases are recoded, test periods are altered, more raw financial data are input, as well as other machine learning models–the AdaBoost and SVM–are selected as benchmark models. Our study enriches the application of machine learning in finance sector, and highlights the economic significance of raw financial data as the financial system's most fundamental components.

Analysis of Public Policy and Criminal Law in The Perspective of Consumer Protection for Online Loan Users in Indonesia

The development of online loan services or pinjol in Indonesia raises new problems in consumer protection. Many cases of fraud and misuse of customer personal data are very concerning. The government has not had specific regulations regarding online loans. The existing regulations are merely appeals and suggestions for fintech pinjol to conduct business responsibly. In fact, stricter regulatory and enforcement steps are needed to address the increasing violations that harm consumers. This study aims to analyze public policies and criminal law in the perspective of protecting pinjol consumers in Indonesia. This research uses a normative legal approach with statute and conceptual approaches. The results are expected to provide recommendations for more effective legal protection for online lending consumers in Indonesia, as well as enriching academic literature on fintech and digital consumer protection. The conclusion is that firmer public policy and criminal law provisions are needed to protect consumer rights in using online loan services which currently have weak legal protection.

ISLAMIC CORPORATE GOVERNANCE AND ISLAMICITY PERFORMANCE INDEX ON FRAUD IN SHARIA COMMERCIAL BANKS

This study aims to impact Islamic corporate governance and fraud in Islamic banks. The Effect of Islamic Corporate Governance on Fraud in Islamic Commercial Banks. And Effect of Islamicity Performance Index on Fraud in Islamic Commercial Banks. This study uses quantitative methods and panel data on Islamic corporate governance variables. Islamicity Performance Index, and ICG and IPI Interaction. The results of this study The effect of positive ICG on fraud Regression Test Results The ICG variable has a coefficient of 4,377,977 and a probability of 0.015, more excellent than 0.05 based on the test. The ICG variable statistically means that the higher the ICG score, the more fraud cases increase, which results in a positive IPI influence on fraud. The results of the Regression Test Variable X1 has a coefficient of 3.536459 and a probability of 0.043, which is less than 0.05, while the variable X2 has a coefficient of -6.62755 and a probability of 0.003 is less than 0.05, which means that isn't it according to theory? If ICG and IPI increase, fraud will decrease, and Interaction Results in This Research Produce a new Variable. Regression Test Results Variable X1 has a coefficient of 17.47975 and a Probability of 0.007, which is less than 0.05, and Variable X2 has a coefficient of 4.735987 and a Probability of 0.406, which is more significant than 0.05 can be interpreted in the same direction and the Interaction Between X1, X2 ICG and IPI can be said to be Perfect that ICG Initially positive, from the ICG results, IPI becomes negative. Significantly, the higher the IPI score. An increase in ICG will reduce fraud cases.