The Effectiveness of Forensic Auditors in the Insurance Process

Yanika Caruana, Simon Grima, Yannis Thalassinos and Peter J. Baldacchino

International Journal of Finance, Insurance and Risk Management, 2020, vol. 10, issue 4, 134-158

Abstract: Purpose: With this study, the authors aim to design a measure to determine the effectiveness of having Forensic Auditors in the Insurance Business. Moreover, in doing this to determine whether this measure is affected by different demographic variables. Design/Methodology: To prove the effectiveness of forensic auditors in the insurance industry, the authors designed a questionnaire using criteria of effectiveness established by Bond et al. (2011) which was completed by 402 valid participants. The criteria revolved around having procedural, substantive, transactive and normative effectiveness. Findings: Results show that engaging forensic auditors in the insurance industry are effective. Forensic auditors are needed in the claims process of insurance firms, and possibly, they should further be engaged in the risk management team of an insurance company. However, with regards to determining the compensation amount, respondents showed a lack of trust, and prefer if forensic auditors work together with loss adjusters, lawyers, and actuaries to enhance their service. Practical Implications: With the engagement of forensic auditors, there would be added benefits to society. Although insurance firms may not eventually benefit in lower claims costs, they would benefit in the way they decide to reserve. Society would also benefit from such engagement, for instance, from enhanced knowledge of fraud detection thereby affecting the behaviour of society towards insurance business, which would ultimately reduce opportunities and capabilities of fraudsters.

Keywords: Forensic Auditing; Forensic Auditors; Fraud; Insurance Firms; Insurance Claims. (search for similar items in EconPapers)
JEL-codes: G22 M42 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://journalfirm.com/journal/244/download (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ers:ijfirm:v:10:y:2020:i:4:p:134-158

Access Statistics for this article

More articles in International Journal of Finance, Insurance and Risk Management from International Journal of Finance, Insurance and Risk Management
Bibliographic data for series maintained by Marios Agiomavritis ().