The perception of accountants/auditors on the role of corporate governance and information technology in fraud detection and prevention

Syed Waleed Ul Hassan, Samra Kiran, Samina Gul, Ibrahim N. Khatatbeh and Bibi Zainab

Journal of Financial Reporting and Accounting, 2023, vol. 23, issue 1, 5-29

Abstract: Purpose - This paper aims to investigate the perceptions of financial accountants and both internal and external auditors regarding the impact of corporate governance (CG) and information technology (IT) on the detection and prevention of fraud within organizations. Design/methodology/approach - Primary data were collected from 250 financial accountants, internal auditors and external auditors through questionnaires. The non-probability snowball sampling technique was used for data collection, with the samplet-test, one-way ANOVA and paired samplet-test applied for analysis. Findings - The results indicate that robust CG practices and IT techniques significantly aid in detecting and reducing fraudulent activities by minimizing opportunities, rationalizations, pressures and capabilities of potential employees to commit fraud. Internal controls also play a significant role in reducing instances of fraud. Notably, ethical officers and ethical training were not perceived as significantly effective in preventing and detecting fraud, leading to a perception that fraudulent practices are prevalent and increasing the risk of future fraudulent activities. Research limitations/implications - This study recommends the adoption of strong CG practices to identify potential fraud within an organization. Moreover, IT techniques should be tailored to specific needs for effective utilization. Furthermore, the government should increase awareness regarding data provision by departments, organizations and other related personnel. Future research could use secondary data from various regions to expand the literature in this field. Originality/value - This research uniquely combines three significant factors: CG, IT and forensic accounting in fraud detection and prevention. It contributes to the enhancement of literature about fraud and its preventive and detective measures. The results of this study set the seed for future research, government policymaking and enhanced organizational practices.

Keywords: Fraud detection; Fraud diamond; Corporate governance; Information technology (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfrapp:jfra-05-2023-0235

DOI: 10.1108/JFRA-05-2023-0235

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