The influences of attitude, subjective norm and adherence to Islamic professional ethics on fraud intention in financial reporting

Yunita Awang, Abdul Rahim Abdul Rahman and Suhaiza Ismail

Journal of Islamic Accounting and Business Research, 2019, vol. 10, issue 5, 710-725

Abstract: Purpose - This study aims to examine the influence of attitude, subjective norm and adherence to Islamic professional ethics on fraud intention in financial reporting among Muslim accounting practitioners in the Malaysian banking institutions. Design/methodology/approach - A questionnaire was used for a sample of 121 Muslim accounting practitioners who are participants in the financial reporting process of Malaysian banking institutions. The data are analysed using partial least squares structural equation modelling. Findings - The study found that attitude and subjective norms are positively significant in influencing fraud intention in financial reporting. In other words, the more the respondents were in favour of fraud and perceived that their referent groups would approve or support the behaviour, the stronger their intentions to commit fraud. On the other hand, the result for Islamic professional ethics is insignificant, which indicates that the Muslim accounting practitioners may not be significantly influenced by the Islamic code of professional ethics on their intention towards fraud in financial reporting. Research limitations/implications - The study adds to the scant literature investigating factors influencing Malaysian accounting practitioners’ intentions for fraud in financial reporting in the banking sector. The limitations include the use of scenario leading to the issue of social desirability bias and the use of purposive sampling technique that limits the generalizability of the results. Practical implications - The findings provide potential avenues for Malaysian banking sector managers to enhance their recruitment and training programmes and give some insights to the public, especially the banks shareholders and depositors, into the fraud in financial reporting intention of the actual participants in the financial reporting process. Originality/value - To the author’s knowledge, this paper is the first to examine, in the Malaysian banking setting, the influence of attitude, subjective norms and adherence to Islamic professional ethics on the fraud intention in financial reporting among accounting practitioners. There are few investigations to date on the factors of influencing or mitigating the accounting practitioners’ intention to commit fraudulent reporting.

Keywords: Attitude; Subjective norm; Theory of reasoned action; Professional ethics; Accounting practitioners; Fraud intention (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jiabrp:jiabr-07-2016-0085

DOI: 10.1108/JIABR-07-2016-0085

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