Unravelling Financial Statement Fraud in Emerging Markets: Insights from Vietnam with the Fraud Diamond Framework

Nguyen Thu Nha Trang (), Luu Tien Thuan (), Nguyen Doan Linh Nhi () and Vo Cam Tu ()

International Journal of Applied Economics, Finance and Accounting, 2025, vol. 22, issue 1, 68-81

Abstract: This study examines factors influencing financial statement fraud (FSF) in Vietnamese listed companies using the Fraud Diamond Framework and explores how the COVID-19 pandemic shapes these factors in emerging markets. Logistic regression analysis was conducted on data from 216 companies listed on the HOSE and HNX stock exchanges between 2017 and 2021, analyzing key variables across pre-COVID-19 and COVID-19 periods. The results reveal six significant factors associated with FSF. External pressure and financial stability positively correlate with FSF, while financial targets have a negative impact. Ineffective monitoring and director changes are positively linked to FSF, whereas frequent auditor changes mitigate fraud risks. The COVID-19 period intensified financial pressures, highlighting the dynamic nature of fraud determinants during crises. The findings emphasize the need for adaptive governance strategies to address FSF during economic uncertainty. The study provides recommendations for strengthening governance frameworks and fraud detection measures to improve transparency and investor trust in emerging economies. This study uniquely applies the Fraud Diamond Framework in a growing economy, offering insights on FSF mitigation during crises and the interplay between governance and economic factors.

Keywords: COVID-19; Diamond fraud model; Financial statements; Fraud; Listed companies. (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://onlineacademicpress.com/index.php/IJAEFA/article/view/2240/1126 (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:oap:ijaefa:v:22:y:2025:i:1:p:68-81:id:2240

Access Statistics for this article

More articles in International Journal of Applied Economics, Finance and Accounting from Online Academic Press
Bibliographic data for series maintained by Heather Rothman ().