Impact of Fraud Risk Assessment on Good Corporate Governance: Case of Public Listed Companies in Oman

Rehman Ali () and Hashim Fathyah ()
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Rehman Ali: Internal Audit Department, A’Sharqiyah University, Sultanate of Oman
Hashim Fathyah: Graduate School of Business, Universiti Sains Malaysia, Malaysia

Business Systems Research, 2020, vol. 11, issue 1, 16-30

Abstract: Background: Fraud risk assessment as a control mechanism is becoming necessary due to continuous and never-ending fraudulent activities. Frauds arise regardless of the existence of codes for corporate governance and available control activities such as those of internal and external audit units. It is high time for the corporate governance functions such as Audit and Risk Committees and Senior Management to identify the controls, which can assist in achieving good corporate governance and at the same time provide satisfaction to the shareholders.Objective: This paper intends to identify the relationship between fraud risk assessment and good corporate governance of companies listed in the Muscat Stock Market in the Sultanate of Oman.Methods/Approach: A quantitative method with a descriptive cross-sectional survey design has been utilized and data have been analysed by utilizing PLS-SEM.Result: Fraud risk assessment has a significant direct impact on good corporate governance, and the adoption and implementation of the fraud risk assessment will assist in the achievement of good corporate governance.Conclusion: It is highly recommended that organizations adopt fraud risk assessment as fraud detection, control mechanism, and embed it in their corporate governance policies, which will eventually aid in the achievement of good corporate governance.

Keywords: fraud risk assessment; good corporate governance; corporate governance; audit; and risk committee; senior management (search for similar items in EconPapers)
JEL-codes: G3 G34 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:bit:bsrysr:v:11:y:2020:i:1:p:16-30:n:2

DOI: 10.2478/bsrj-2020-0002

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