Fraud Prevention Measures Research Articles

Building the Foundation: Towards a Theoretical Framework for Forensic Accounting

This study proposed a forensic accounting theory after examining how the impact of certain variables and their interplay on forensic accounting practices can contribute to developing integrated and robust fraud prevention strategies, enhance organizational accountability, and strengthen the overall integrity of financial and internal control systems. In literature, most studies on forensic accounting and fraud prevention have primarily focused on broader aspects such as governance, ethics, and accountability and are largely predicated on theories such as fraud diamond theory and agency theory that seek to understand the causes of fraud, highlighting the importance of forensic accounting in fraud prevention and detection, without suggesting practical forensic accounting frameworks. Also, the forensic accounting theory developed by Peterson Ozil in 2020 examines how the investigator’s attitude or mindset at the time of decision-making influences the outcomes of a forensic investigation. While these studies provide valuable insights into the overall context of fraud prevention, there is a scarcity of research on the specific forensic accounting processes that should be implemented to enhance the effectiveness of fraud prevention measures. This is the significant difference between the current study and previous studies. Therefore, the proposed Vutumu Forensic Accounting Theory serves as the guiding philosophy that underpins the integrated approach of combining control system reliance, litigation support, whistleblower hotlines, sustainable governance systems, ethical philosophy, digital fraud review frequencies, accounting record to reporting quality, and the frequency of system reviews, thereby enabling organizations to establish a proactive framework that addresses various dimensions of fraud prevention and detection. The implementation of the theory emerges as a formidable and comprehensive anti-fraud strategy, seamlessly integrating multiple elements to create a robust defense against fraudulent activities, safeguarding financial integrity, ethical conduct, and accountability within organizations. Furthermore, it is the researcher’s desire that this study serve as a foundation for further research and practical implementation of forensic accounting frameworks in strengthening the ability to detect and prevent fraud.

Fraud Prevention Strategies and Financial Stability of Insurance Companies in Kenya

Insurance companies play a crucial role in reducing risks and uncertainties, making them a vital part of the economy. However, they are vulnerable to various types of fraudulent activities, such as false claims, premium misuse, and financial record manipulation. While efforts have been made to address these challenges, more investigation is needed to determine the effectiveness of fraud prevention methods in maintaining financial stability. This research project aims to bridge this gap by exploring the empirical connections between internal control frameworks, transaction monitoring processes, financial audit procedures, and the overall financial stability of insurance companies in the Kenyan market. The goal is to understand how these techniques can deter fraud, promote regulatory compliance, and strengthen the organizational structures in the industry. Additionally, the study examines established theories like agency theory, risk management theory, institutional theory, and game theory to clarify the theoretical basis supporting these tactics and their impact on the financial stability and longevity of insurance companies. The conclusion of the study offers valuable insights regarding the correlation between fraud prevention measures and financial stability within the insurance sector.

Exploring the Role of Human Capital in Mediating the Impact of Fraud Prevention Planning and Development Planning on the Welfare of Society

Village funds play a crucial role in local development, especially in rural areas often marginalized in national development. However, a case study in South Aceh Regency highlights misuse of these funds through fictitious projects and price manipulation, harming public finances and hindering local economic growth. The study surveyed the entire population of 260 villages in South Aceh Regency. Using a formula considering 28 variable indicators and 4 research dimensions, a minimum sample size of 112 respondents was determined. The sample included Village Officials, Finance Section Heads, Development Section Heads, and Tuha Peut (village elders), and was increased to 120 respondents to ensure representativeness and reliability. Data analysis, conducted using Smart PLS software with the SEM model. The results indicate significant positive relationships between Fraud Prevention and The Welfare of Society p value 0.002, as well as between Development Planning and Human Resources p Value 0.006. These findings suggest that effective fraud prevention measures and robust development planning efforts contribute to enhancing overall well-being and human resource capacity in rural communities. They emphasize the importance of implementing strategies addressing financial integrity and socio-economic development concurrently to drive sustainable progress. Conversely, hypotheses H2, H3, and H5 are not supported by the analysis, indicating no significant relationships between Fraud Prevention and Human Resources p value 0.919, Development Planning and The Welfare of Society p value 0.458, as well as Human Resources and The Welfare of Society p value 0.637.

A conceptual study on challenges in web merchandising

Web merchandising presents a countless of challenges for online retailers seeking to establish and maintain a competitive edge in the digital marketplace. This study examines the multifaceted hurdles faced by e-commerce businesses, encompassing factors such as intense competition, consumer behavior, data management complexities, personalization demands, mobile optimization imperatives, SEO, dynamic pricing considerations, security and fraud prevention measures. Retailers need to take a complete approach that combines modern technology, data analytics, and an in-depth understanding of consumer preferences in order to successfully manage these issues. Businesses may improve client interaction, boost online visibility, and promote long-term success in the dynamic field of web retailing by taking on these difficulties directly.

APAKAH MANAJEMEN LABA MERUSAK PRINSIP TRANSPARANSI DAN AKUNTABILITAS INFORMASI KEUANGAN?

The practice of earnings management is carried out by companies to present financial reports that are appealing to stakeholders. However, some manipulations conducted in the context of earnings management are feared to compromise the transparency and accountability principles of financial reporting. The differing definitions of earnings management presented by experts also contribute to making this topic controversial. This literature review aims to elucidate and re-examine the practices of earnings management and perspectives from both sides: the proponent side supporting earnings management practices and the opposing side rejecting the implementation of earnings management in companies. The review's findings indicate that earnings management practices can be supported through the implementation of fraud prevention measures aimed at preserving these practices to continue operating within the confines of financial accounting standards.

Detecting Credit Card Fraud through Data Mining

The credit card industry grapples with a significant challenge in the form of credit card fraud, necessitating a comprehensive understanding of the various types of fraudulent activities and the evaluation of techniques deployed to detect such activities. Diverse strategies are employed by credit card firms and financial institutions, including banks, to prevent fraud, tailored to address the range of illicit behaviours encountered. The overarching goal of these efforts is to reduce instances of credit card fraud. However, persistent issues with current methodologies can lead to the erroneous classification of legitimate credit card users as fraudulent. Detecting credit card fraud through data mining entails analysing extensive datasets to identify patterns, anomalies, and trends indicative of fraudulent activities. Consequently, when employing data mining in credit card fraud detection systems, the outcome typically involves the recognition and flagging of transactions as potentially fraudulent or valid, contributing to enhanced fraud prevention measures.

Fraud Detection and Prevention in Accounting Emerging Technologies and Best Practices in Delhi NCR

This report investigates the integration of emerging technologies and best practices to enhance fraud detection and prevention in the accounting systems of Delhi NCR, India. With accounting fraud posing significant challenges globally, effective measures are essential for mitigating financial losses and reputational damage. The study reviews existing fraud detection technologies, including data analytics, artificial intelligence, and continuous auditing, highlighting their potential to address evolving fraud schemes. Additionally, it examines robust accounting practices such as segregation of duties, internal controls, and whistleblower hotlines as fundamental to fraud prevention. Emerging trends like blockchain technology, cloud-based solutions, and behavioural analytics are also explored for their potential in bolstering fraud detection efforts. The unique context of Delhi NCR, characterized by regulatory landscape, cultural factors, and infrastructure development, is considered in tailoring fraud prevention strategies. The research employs quantitative and qualitative methods, including regression analysis, to evaluate the effectiveness of training programs and awareness campaigns on fraud prevention and assess the correlation between training frequency and fraud occurrence. Findings suggest a significant positive relationship between perceived effectiveness of fraud detection technologies and overall effectiveness of fraud prevention measures. However, limitations such as sample size constraints and reliance on self-reported data are acknowledged, highlighting the need for further research in understanding the multifaceted dynamics of fraud detection and prevention in Delhi NCR's accounting landscape.

A Survey on the Role of Technological Innovation in Nigerian Deposit Money Bank Fraud Prevention

Technological innovation plays a pivotal role in transforming the landscape of fraud prevention within Nigeria Deposit Money Banks (DMBs). This research explores the multifaceted impact of advanced technologies on fortifying the defenses of DMBs against fraudulent activities. Leveraging a comprehensive analysis of survey results and empirical data, the study delves into the perceptions and attitudes of stakeholders towards the integration of innovative solutions, including advanced data analytics, machine learning algorithms, real-time monitoring systems, and block chain technology. The findings reveal a widespread consensus among participants regarding the positive impact of these technologies on early fraud detection, prevention, and overall security. Notably, 86% of respondents acknowledge the positive impact of advanced data analytics and machine learning algorithms, emphasizing their potential benefits in thwarting fraudulent activities. Real-time monitoring systems, artificial intelligence, robust encryption, and cyber security protocols were also recognized by a majority of participants, affirming their crucial roles in bolstering fraud prevention measures within DMBs. The study employs a chi-square test to establish significant relationships between technological innovation and the enhancement of fraud prevention mechanisms, supported by calculated values exceeding critical thresholds. Furthermore, the abstract highlights the importance of continuous staff training, collaboration with fintech innovators, and regular security audits as integral components of a holistic fraud prevention strategy. The overall positive sentiments expressed by respondents underscore the transformative potential of technological innovation in mitigating fraud risks. This study contributes valuable insights that inform decision-making processes, guiding the strategic integration of advanced technologies within the Nigerian banking sector to reinforce operational frameworks against emerging fraud challenges. Technological innovation stands as an indispensable catalyst for fortifying the defense mechanisms of Nigeria Deposit Money Banks against fraud. The seamless integration of advanced technologies not only enhances security measures but also fosters a more robust, efficient, and resilient banking system, thereby mitigating risks and fostering sustainable growth in the financial sector.

Machine Learning Techniques for Fraud Detection in Financial Services

Fraudulent activities remain a critical challenge for financial institutions, prompting a continual quest for robust detection mechanisms. While effective to a certain extent, traditional rule-based approaches often fall short of capturing fraudsters' evolving tactics. In response, the integration of machine learning (ML) techniques has emerged as a promising avenue to bolster fraud detection capabilities. This paper presents a comprehensive review of recent advancements in ML algorithms specifically tailored for fraud detection within the realm of financial services. Leveraging a plethora of methodologies, including supervised, unsupervised, and semi-supervised learning, researchers and practitioners have endeavored to devise innovative strategies to combat fraudulent transactions effectively. Supervised learning techniques, such as logistic regression, decision trees, random forests, and gradient-boosting machines, have garnered significant attention due to their ability to learn from labeled data and discern patterns indicative of fraudulent behavior. Conversely, unsupervised learning methods, including clustering and anomaly detection algorithms, strive to identify transactional data irregularities without needing labeled examples. Semi-supervised learning techniques bridge the gap between supervised and unsupervised approaches by leveraging a small set of labeled data in conjunction with a larger pool of unlabeled data to enhance detection accuracy. A pivotal aspect in the efficacy of ML models for fraud detection lies in feature engineering. Given the unique characteristics of financial data, feature selection and transformation play a vital role in capturing meaningful signals while mitigating noise. Techniques such as PCA (Principal Component Analysis), LDA (Linear Discriminant Analysis), and feature scaling are commonly employed to preprocess data and extract relevant features that encapsulate the underlying patterns of fraudulent behavior. Despite the strides made in ML based fraud detection, several challenges persist. Imbalanced datasets, wherein fraudulent transactions constitute a minority class, pose a significant hurdle, potentially leading to biased models favoring the majority class. Addressing this imbalance requires careful consideration of sampling techniques, cost-sensitive learning, and performance metrics tailored to asymmetric distributions. Furthermore, the interpretability of ML models remains a pressing concern, particularly in highly regulated industries like finance. Explainable AI (XAI) methodologies, such as SHAP (SHapley Additive exPlanations) and LIME (Local Interpretable Model-agnostic Explanations), seek to elucidate the decision-making process of complex models, fostering trust and transparency in their deployment. Looking ahead, the convergence of emerging technologies, including deep learning and blockchain, holds promise for enhancing fraud detection capabilities. Deep learning architectures, with their ability to automatically extract hierarchical features from raw data, offer potential avenues for improving detection accuracy, albeit at the cost of interpretability. Similarly, the immutable nature of blockchain technology presents opportunities for enhancing data integrity and transaction transparency, thereby fortifying fraud prevention measures.

The Influence of Compensation Suitability, Internal Control, Regulatory Enforcement, and the Use of Information Technology on Fraudulent Behaviour in the Management of Village Funds

Preventive measures are needed to prevent fraud in the management of village funds. Fraud prevention measures are a way to reduce opportunities and prevent any activity from evaluating the risk of fraud. The purpose of this study was to determine whether factors such as compnesation suitability, internal control, regulatory enforcement and the use of information technology affect fraudulent behaviour that occurs in the management of village funds. This quantitative research uses the census sampling method and collects data from all village officials in Lambai Sub-district, North Kolaka Regency. In total, 72 village officials agreed to be respondents in this study. The results of this study indicate that the components of compensation suitability and internal control affect fraudulent behaviour negatively and significantly. Meanwhile, regulatory enforcement and the use of information technology affect fraudulent behaviour negatively and insignificantly.

Pengaruh Kompetensi Badan Pengawas, Budaya Organisasi Dan Sistem Pengendalian Internal Terhadap Pencegahan Fraud

Preventing fraud is a measure taken to lessen the likelihood that dishonest individuals will deceive others for financial gain. The research team wanted to know if there was a correlation between a strong internal control system, a strong corporate culture, and a low incidence of fraud. This investigation was carried out at the North Denpasar District Village Offices. A total of 66 people were polled for this study's samples. To gather information, we'll be using a questionnaire. In the meantime, the outer and inner PLS models are used in the data analysis procedure. According to the results of the simulations, the effectiveness of fraud prevention measures is enhanced by the competence of the supervisory body. A company's culture can make a big difference in how effectively it combats fraud. When it comes to preventing fraud, the internal control system plays a crucial role.

Towards a Cyber Resilient Banking System: Effectiveness of Cyber Fraud Risk Management Strategies Adopted by Commercial Banks in Zimbabwe

The advent of digital financial technology left the business community and its clients celebrating convenient ways of online shopping, paying bills and money transfers. However, digital banking technology came with its share of challenges, due to highly digitalised economies in the context of the Fourth Industrial Revolution, cyber fraudsters are increasingly targeting and leveraging on financial market infrastructures. Cyber security of banking institutions and the financial systems across the globe remains a major concern of Central Banks, investors, internal auditors and financial risk managers. The purpose of this research paper was to examine the efficacy of cyber fraud prevention measures used by commercial banks in Zimbabwe. The study also looked into the difficulties encountered in managing cyber-fraud. Results indicate that cyber fraud risk management strategies adopted by Commercial banks are partly effective which indicates existence of opportunities for cyber fraudsters to attacks and get away with it at the expense of clients, banks and the financial system as a whole. Results also indicate that Commercial banks are facing quite a number of challenges which include the following: lack of sophisticated systems, cyber attackers are always ahead, some of the clients do not take awareness messages send to them seriously, some clients share passwords and credit cards and lack of enough education and knowhow of employees. The study therefore concludes that, cyber fraud risk management strategies adopted by Commercial banks are partly effective. Monetary and fiscal authorities need to continue monitoring Commercial banks with regard to implementation of cyber security risk based supervision framework.

FRAUD AS A THREAT TO THE ECONOMIC SECURITY OF ECONOMIC ENTITIES

This article examines the essence of fraud, its conceptual apparatus. Based on the analysis of the types of fraud, a generalized classification has been compiled. Organizational and general social fraud prevention measures are proposed to ensure the economic security of economic entities.

A decentralized trust management mechanism for crowdfunding

Crowdfunding is an act of raising funds from the public to support an individual or organizational project, and the success of crowdfunding projects lies in gaining backers' trust. In practice, however, crowdfunding platforms are rife with fraudulent crowdfunding projects. While some crowdfunding platforms use third-party auditors to verify projects before publishing, this also runs the risk of collusion between crowdfunders and auditors. The recent introduction of blockchain has increased the transparency of crowdfunding, but they, too, lack fraud prevention measures. Obviously, existing crowdfunding trust management schemes are not applicable under a zero-trust scenario. In this study, we propose a blockchain-based trust management mechanism for crowdfunding to address the fraudulent behavior in the existing crowdfunding systems. We introduce an auditor committee to audit crowdfunding projects credibly. A random selection algorithm on the blockchain enables the distributed generation of auditor committees with a trade-off between the randomness of selection and auditor expertise. The audit results are based on independent auditing by the audit committee members and are presented by the smart contract, avoiding the influence of third parties. In addition, we also provide an incentive mechanism to encourage auditors who perform accurate audits. Theoretical analyses and experiments show that our scheme can effectively deal with malicious behaviors and has an acceptable overhead.

Bank Verification Number and Fraud Prevention and Detection in Nigerian Banks

This study examines the roles of the Bank Verification Number (BVN) in detecting and preventing fraudulent activities in the Nigerian banking sector. The specific objectives are to assess the effectiveness of BVN in fraud detection and prevention and identify challenges facing its implementation. Descriptive and regression analyses were conducted using data from respondents in the Nigerian banking sector. The R-squared value of 0.613 infers that all the identified factors account for 61.3% of the variation in BVN’s ability to prevent fraud in Nigerian banks, while the F-statistic diagnosing the fitness of the model shows that all t.he independent variables are statistically significant (F=55.203) for the model this implied that the majority of respondents view BVN as an effective tool in preventing and detecting fraud. Bank-related factors such as average customer size, total deposit, and staff strength significantly influence BVN’s efficacy in fraud prevention. However, The R-squared value of 0.517 infers that all the identified factors account for 51.7% of the variation in challenges facing implementation of BVN in Nigerian banking industry, while the F-statistic diagnosing the fitness of the model shows that all the independent variables are statistically significant (F=37.268) for the model this implied that challenges such as lack of cooperation among financial institutions and poor regulatory performance hinder BVN implementation. Therefore, study recommended that include strengthening BVN implementation, addressing challenges, conducting awareness programs, and continuously monitoring bank-related factors to enhance fraud prevention measures. Collaboration and further research are also recommended to improve BVN’s effectiveness in fraud prevention.

Fraud Risk Analysis Fraud Prevention Detection with Fraud Triangle and Financial Ratios at PT. Garuda Indonesia (Persero) Tbk.

This study aims to detect the risk of fraud in the financial statements and ongoing fraud prevention measures if there are irregularities in the financial statements. The issue of earnings management in the financial statements of PT Garuda Indonesia (Persero) Tbk by significantly increasing profits has raised a lot of suspicion and greatly harmed many parties, especially investors who invested in this company. The analysis was carried out using the fraud triangle variable and by asking for opinions from experts in their respective fields or professions related to fraud, such as auditors, accounting staff and employees who assist in the presentation of financial statements. The sample included 30 respondents. The calculation of financial ratios was done by calculating the ratio of liquidity, profitability, and solvency to detect fraud risk. The results of the analysis of fraud detection during the 2017-2019 period showed that there was an indication of markups on the company’s capital and profits in 2019. During those three years there was a decline in the company’s performance including its effectiveness in paying its short-term debt. This is in line with the opinion of auditors and users of financial statements who have predicted fraud and profit markups in the financial statements.

The Influence of Internal Control, Company SOP and Auditor Professionalism on Fraud Prevention Measures

Main Purpose - The main objective of this study is to determine the effect between variables, namely internal control, company SOPs, and auditor professionalism with simultaneous and partial fraud prevention actions that occur in bakery companies.Method - Purposive sampling in the study when it was a saturated sample of 105 employees of a bakery company listed on the Jakarta Stock Exchange for the 2017-2021 period. This research is quantitative as the method so that the data is tested with SPSS IBM 22 through multiple regression approach.Main Findings - Internal control (PI) has a positive and significant effect on fraud prevention measures because high internal control reflects lower fraud risk according to the complexity of company procedures and the complexity of the business itself. The company's SOP (SP) has a positive and significant effect on fraud prevention because the company's SOP that is carried out properly by all company employees will provide guidelines for all employees to submit and do it. Auditor professionalism (AP) has a positive and significant effect on fraud prevention measures because it can be assumed that the quality and professional competence of auditors can implement higher standards in presenting financial information in a transparent and accountable manner.Theory and Practical Implications - The current research implications are focused on future investors, companies and researchers. The implication of this research concludes that with the implementation of internal control, company SOPs as well as high professional auditors and regular audit frequency can guarantee high quality of company financial information and free from fraud.Novelty – Previous researchers only focused on the fraud triangle theory with the location of service companies as indicators for pressure, opportunity and rationalization, but in this study the researchers took Gone theory which focused on the authority of power, the demands of life needs and the prestige of the leadership lifestyle that occurred in bread company.

Integrity, Religiosity, Gender: Factors Preventing on Academic Fraud

The purpose of this study is to explain and predict the effect of respondent integrity and religiosity in relation to the possibility of academic fraud, which is mostly done by students. The study was also supposed to look at the effect of gender on students’ academic fraud behavior. This study involved 102 accounting students from public universities in Malang, Indonesia. Researchers used survey methods to collect data, and data were analyzed by SPSS software using multiple linear regression and moderated regression analysis. The findings of this study indicate that a lack of integrity and religion has a negative impact on the likelihood of academic fraud. This shows that students with higher levels of honesty and religion are less likely to commit academic fraud. While gender did not appear to have a substantial impact on the effect between integrity, religiosity, and the likelihood of academic cheating, both male and female students had similar levels of integrity and religiosity. The findings of this study will be useful for universities in formulating academic policies related to academic fraud prevention measures.

Contemporary review of corruption risk studies

This study presents a review of the studies on corruption risk in corporations. It highlights the antecedents of corruption risk, contributes additional knowledge on anti-corruption, and offers some suggestions for future research. Following Tranfield, Denyer, and Smart (2003), a literature search was done on corporate corruption risk and its related terminologies, theories, causes, and effects. In conducting the literature search, top-ranked journals of Science Direct, Springer Link, and Emerald, were used in the Scopus and Google Scholar search engines to find quality papers. The selected online published materials covered the period from 2013 to 2021. The review shows that prior studies have discussed the issue of corruption risk using different measurements and various theories. Also, this study reveals the causes and effects of corruption risk in corporations. This paper suggests a need for future research that will focus on corporate corruption risk, especially in the Malaysian context (Muhamad & Gani, 2020) due to minimal empirical research on corruption issues from a risk perspective. The aspects of corruption risk can become the foundation for effective and proactive community fraud prevention measures that can be implemented by policymakers, regulators, industry players, governments, and non-governmental agencies

Determinants of Effective External Audits for Independent Constitutional Commissions: A Case of Teacher’s Service Commission, Kenya

Effective external auditing enables institutions to meet their financial obligations by instituting effective controls and risk management mechanism to obtain good governance. The current study established the determinants of effective external audits for independent commissions in Kenya: a case of Teachers Service Commission (TSC). The study was premised on three objectives; to determine the influence of audit technical competency, audits independence, and audit duration on effective external audits at TSC. The study adopted a descriptive research design. The study targeted all staff in the finance related departments at the Headquarter, Upper Hill-Nairobi totaling to 299. Questionnaire was distributed through purposive sampling method. The study used descriptive statistics and multiple regression analysis. Multicollinearity and heteroscedasticity were used to test the model’s reliability. The study established that technical competence, audit independence, audit duration, and ethical practices had positive relationship with effective external audits. The study concluded that external auditors adhered to quality standards, exercised good forensic skills, and provided reliable and verifiable reports. The study concluded that TSC ensured that auditors have free and unrestricted access to all financial operations and to the relevant staff at TSC. It concluded that auditors with longer duration possessed adequate experience with TSC systems. The study concluded that external auditors continuously complied with reporting procedures, made professional disclosures of auditing reports, upheld fair, and truthful representation of financial issues. The study recommends that the line Ministry should procure modern ICT external audit tools (software) that can promote efficient and faster audit service delivery including offering adequate compliance with expenditure management, fraud prevention, and detection measures. The study recommends that the commission should create conducive environment so that auditors can adequately plan their activities using auditing guidelines to ensure impartial reporting exercise free from conflict of interests. Keywords: Effective External Audits, Technical Competency, Audits Independence, Audit Duration, and Ethical Practices.