Fraudulent financial reporting analyses using Beneish model: evidence from Malaysian public companies

Nurshamimi Sabli, Rosmini Mohd Aripin, Radziah Mahmud and Roszana Tapsir

Global Business and Economics Review, 2023, vol. 29, issue 1, 107-132

Abstract: Increasing fraud cases are alarming, particularly during economic instability periods. In meeting the financial targets and secure financing to sustain business activities, companies may be involved in fraudulent activities. However, such unethical behaviour will adversely affect the sustainability of the business in the long run. Adopting agency theory, this study intends to explore the influence of firm characteristics and corporate governance attributes on the fraudulent financial reporting (FFR) proxied by Beneish model. Based on 754 firm-year observations from public listed companies in Bursa Malaysia from 2018 to 2020, it is found that only firm characteristics have influenced the inclination for fraudulent financial reporting activities. Apart from contributing additional knowledge to existing literature, this study is expected to provide valuable insights to the industry players in Malaysia to curb fraudulent activities through appropriate monitoring mechanisms, from both the firm characteristics and governance.

Keywords: fraudulent financial reporting; FFR; firm characteristics; corporate governance; Beneish model. (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ids:gbusec:v:29:y:2023:i:1:p:107-132

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