Main Article Content
Abstract
This article empirically investigated proactive financial statement fraud detection techniques 30 among nongovernment organisations in the eThekwini region, South Africa. The data for this thesis was gathered from 87 staff via the use of a mixed research method with knowledgeable individuals in the field of fraud risk management. SPSS used descriptive statistics analysis while all the interview questions were analysed using conventional thematic analysis via NVivo. Robustness analysis was entirely performed using AMOS for CFA was used to estimate statistical models. SEM simultaneously estimated the link between detective financial statement fraud practices. The study’s results and findings of both the questionnaire and interviews reflected statistically significant agreement that NGOs should use proactive forensic auditing techniques in order to detect financial statement fraud among NGOs in the eThekwini region of South Africa.
Keywords
Article Details
Copyright (c) 2022 Jean Damascene Mvunabandi, Bomi Cyril Nomlala, Harold Patrick
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
References
- Abdi, A. G. (2017). The impact of forensic audit services on fraud detection among commercial banks in Kenya. University of Nairobi.
- Aigienohuwa, O., Okoye, E. I., & Uniamikogbo, E. O. (2017). Forensic accounting and fraud mitigation in the Nigerian banking industry. Accounting and Taxation Review, 1(1), 177–195.
- Akenbor, C. O., & Ironkwe, U. (2014). Forensic auditing techniques and fraudulent practices of public institutions in Nigeria. Journal of Modern Accounting and Auditing, 10(4), 451–459.
- Akinbowale, O. E., Klingelhöfer, H. E., & Zerihun, M. F. (2020). An innovative approach in combating economic crime using forensic accounting techniques. Journal of Financial Crime, 27(4), 1253–1271.
- Albrecht, W. S., Albrecht, C., & Albrecht, C. C. (2008). Current trends in fraud and its detection. Information Security Journal: A Global Perspective, 17(1), 2–12.
- Amin, K., & Harris, E. E. (2017). Nonprofit stakeholder response to going-concern audit opinions. Journal of Accounting, Auditing and Finance, 32(3), 329–349.
- Andres-Alonso, P. de, Garcia-Rodriguez, I., & Romero-Merino, M. E. (2016). Disentangling the financial vulnerability of nonprofits. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 27, 2539–2560.
- Bredenkamp, D. P. (2015). The development of an investigation process for commercial forensic practitioners in South Africa. North-West University.
- Brown, P., Brunnhuber, K., Chalkidou, K., Chalmers, I., Clarke, M., Fenton, M., Forbes, C., Glanville, J., Hicks, N. J., Moody, J., Twaddle, S., Timimi, H., & Young, P. (2006). How to formulate research recommendations. BMJ, 333(7572), 804–806.
- Dalnial, H., Kamaluddin, A., Sanusi, Z. M., & Khairuddin, K. S. (2014). Detecting fraudulent financial reporting through financial statement analysis. Journal of Advanced Management Science, 2(1), 17–22.
- Dan, S., Maria, M., Adina, P., & Rodica, B. (2010). The “Credibility Crisis” of auditing proffesion: An empirical study in Romania. Annals of Faculty of Economics, 1(2), 912–918.
- Dorminey, J. W., Fleming, A. S., Kranacher, M.-J., & Riley, R. A. (2010). Beyond the Fraud Triangle. The CPA Journal, 80(7), 17–24.
- Dorseh, S. S., & Tevmouri, S. (2019). The impact of forensic auditors on corporate governance. Journal of Accounting and Social Interests, 9(3), 69–85.
- ENSafrica. (2010). Lifestyle audits are a critical management tool to identify fraud. Lexology.
- Etherington, E. C. and S. (2018). Governance in the Non-Profit sector. In Communicating Causes. Routledge.
- Farouk, M. A., Nafiu, B. M., & Saidu, A. (2016). Economic growth of Nigeria: Does oil revenue matters? International Journal of Economics and Financial Research, 2(10), 176–182.
- Fortvingler, J., & Szívós, L. (2016). Different approaches to fraud risk assessment and their implications on audit planning. Periodica Polytechnica Social and Management Sciences, 24(2), 102–112.
- Halbouni, S. S. (2015). The role of auditors in preventing, detecting, and reporting fraud: The case of the United Arab Emirates (UAE). International Journal of Auditing, 19(2), 117–130.
- Hamdani, R., Kumalahadi, & Urumsah, D. (2017). The classification of corruption in indonesia: a behavioral perspective. SHS Web of Conferences 10002.
- Jackson, R. D. C., & Stent, W. J. (2010). Auditing notes for South African students. LexisNexis.
- Kassem, R. (2016). Detecting financial reporting fraud: the impact and implications of management motivations for external auditors - evidence from the Egyptian context. Loughborough University.
- Kimathi, B. K. (2018). Effect of Fraud Risk Management on Financial Performance of Non-Governmental Organisations in Nairobi County. University of Nairobi.
- Maguire, M., & Delahunt, B. (2017). Doing a thematic analysis: A practical, step-by-step guide for learning and teaching scholars. All Ireland Journal of Higher Education., 9(3), 27–34.
- Misra, A., & Walden, V. (2016). Proactive: fund analysis: integrating advanced forensic data analytics capabilities can help auditors mitigate fraud risks and demonstrate returns. Internal Auditor, 73(2), 33–37.
- Ocansey, E. O. N. D. (2017). Forensic accounting and the combating of economic and financial crimes in Ghana. European Scientific Journal, 13(31), 379–393.
- Peltier-Rivest, D., & Lanoue, N. (2015). Cutting fraud losses in Canadian organizations. Journal of Financial Crime, 22(3), 295–304.
- Peter, Z., Masoyi, Dadi, A., Ernest, Inyang, E., & Gabriel, A. O. (2014). Application of forensic auditing in reducing fraud cases in Nigeria money deposit banks. Global Journal of Management and Business Research: DAccounting and Auditing, 14(3), 154–166.
- Popoola, O., Ahmad, A., & Samsudin, R. (2014). Forensic accounting knowledge and mindset on task performance fraud risk assessment. International Journal of Business and Management, 9(9), 118–134.
- Rooyen, H. J. N. Van. (2008). The practitioner’s guide to forensic investigation in South Africa. Henmar Publications.
- Ruankaew, T. (2016). Beyond the fraud diamond. International Journal of Business Management and Economic Research, 7(1), 474–476.
- Shakouri, M. M., Taherabadi, A., Ghanbari, M., & Jamshidinavid, B. (2021). Explaining the Beneish model and providing a comprehensive model of fraudulent financial reporting(FFR). International Journal of Nonlinear Analysis and Applications, 12(Special Issue), 39–48.
- Sikka, P. (2009). Financial crisis and the silence of the auditors. Accounting, Organizations and Society, 34(6–7), 868–873.
- Snyder, H., Andersen, M., & Zuber, J. (2017, March). Nonprofit Fraud: How Good are Your Internal Controls? Strategic Finance. https://sfmagazine.com/post-entry/march-2017-nonprofit-fraud-how-good-are-your-internal-controls/
- Sorunke, O. A. (2016). Personal ethics and fraudster motivation: The missing link in fraud triangle and fraud diamond theories. International Journal of Academic Research in Business and Social Science, 6(2), 159–165.
- Srivastava, R. P., & Mock, T. J. (2005). Why we should consider belief functions in auditing research and practice. The Auditor’s Report, 28(2), 1–8.
- Sumartono, Urumsah, D., & Hamdani, R. (2020). Skills of the forensic accountants in revealing fraud in public sector: The case of Indonesia. Journal of Accounting and Investment, 21(1), 180–194.
- Uniamikogbo, E., Adeusi, A. S., & Amu, U. C. (2019). Forensic audit and fraud detection and prevention in the Nigerian banking sector. Accounting and Taxation Review, 1(1), 177–195.
- Weber, J., & Gillespie, J. (1998). Differences in Ethical Beliefs, Intentions, and Behaviours. Business , 37, 447–467.
- Wilken, A. (2016). Assessing the relevance of external auditors and forensic accountants when performing fraud risk assessments. North-West University.
References
Abdi, A. G. (2017). The impact of forensic audit services on fraud detection among commercial banks in Kenya. University of Nairobi.
Aigienohuwa, O., Okoye, E. I., & Uniamikogbo, E. O. (2017). Forensic accounting and fraud mitigation in the Nigerian banking industry. Accounting and Taxation Review, 1(1), 177–195.
Akenbor, C. O., & Ironkwe, U. (2014). Forensic auditing techniques and fraudulent practices of public institutions in Nigeria. Journal of Modern Accounting and Auditing, 10(4), 451–459.
Akinbowale, O. E., Klingelhöfer, H. E., & Zerihun, M. F. (2020). An innovative approach in combating economic crime using forensic accounting techniques. Journal of Financial Crime, 27(4), 1253–1271.
Albrecht, W. S., Albrecht, C., & Albrecht, C. C. (2008). Current trends in fraud and its detection. Information Security Journal: A Global Perspective, 17(1), 2–12.
Amin, K., & Harris, E. E. (2017). Nonprofit stakeholder response to going-concern audit opinions. Journal of Accounting, Auditing and Finance, 32(3), 329–349.
Andres-Alonso, P. de, Garcia-Rodriguez, I., & Romero-Merino, M. E. (2016). Disentangling the financial vulnerability of nonprofits. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 27, 2539–2560.
Bredenkamp, D. P. (2015). The development of an investigation process for commercial forensic practitioners in South Africa. North-West University.
Brown, P., Brunnhuber, K., Chalkidou, K., Chalmers, I., Clarke, M., Fenton, M., Forbes, C., Glanville, J., Hicks, N. J., Moody, J., Twaddle, S., Timimi, H., & Young, P. (2006). How to formulate research recommendations. BMJ, 333(7572), 804–806.
Dalnial, H., Kamaluddin, A., Sanusi, Z. M., & Khairuddin, K. S. (2014). Detecting fraudulent financial reporting through financial statement analysis. Journal of Advanced Management Science, 2(1), 17–22.
Dan, S., Maria, M., Adina, P., & Rodica, B. (2010). The “Credibility Crisis” of auditing proffesion: An empirical study in Romania. Annals of Faculty of Economics, 1(2), 912–918.
Dorminey, J. W., Fleming, A. S., Kranacher, M.-J., & Riley, R. A. (2010). Beyond the Fraud Triangle. The CPA Journal, 80(7), 17–24.
Dorseh, S. S., & Tevmouri, S. (2019). The impact of forensic auditors on corporate governance. Journal of Accounting and Social Interests, 9(3), 69–85.
ENSafrica. (2010). Lifestyle audits are a critical management tool to identify fraud. Lexology.
Etherington, E. C. and S. (2018). Governance in the Non-Profit sector. In Communicating Causes. Routledge.
Farouk, M. A., Nafiu, B. M., & Saidu, A. (2016). Economic growth of Nigeria: Does oil revenue matters? International Journal of Economics and Financial Research, 2(10), 176–182.
Fortvingler, J., & Szívós, L. (2016). Different approaches to fraud risk assessment and their implications on audit planning. Periodica Polytechnica Social and Management Sciences, 24(2), 102–112.
Halbouni, S. S. (2015). The role of auditors in preventing, detecting, and reporting fraud: The case of the United Arab Emirates (UAE). International Journal of Auditing, 19(2), 117–130.
Hamdani, R., Kumalahadi, & Urumsah, D. (2017). The classification of corruption in indonesia: a behavioral perspective. SHS Web of Conferences 10002.
Jackson, R. D. C., & Stent, W. J. (2010). Auditing notes for South African students. LexisNexis.
Kassem, R. (2016). Detecting financial reporting fraud: the impact and implications of management motivations for external auditors - evidence from the Egyptian context. Loughborough University.
Kimathi, B. K. (2018). Effect of Fraud Risk Management on Financial Performance of Non-Governmental Organisations in Nairobi County. University of Nairobi.
Maguire, M., & Delahunt, B. (2017). Doing a thematic analysis: A practical, step-by-step guide for learning and teaching scholars. All Ireland Journal of Higher Education., 9(3), 27–34.
Misra, A., & Walden, V. (2016). Proactive: fund analysis: integrating advanced forensic data analytics capabilities can help auditors mitigate fraud risks and demonstrate returns. Internal Auditor, 73(2), 33–37.
Ocansey, E. O. N. D. (2017). Forensic accounting and the combating of economic and financial crimes in Ghana. European Scientific Journal, 13(31), 379–393.
Peltier-Rivest, D., & Lanoue, N. (2015). Cutting fraud losses in Canadian organizations. Journal of Financial Crime, 22(3), 295–304.
Peter, Z., Masoyi, Dadi, A., Ernest, Inyang, E., & Gabriel, A. O. (2014). Application of forensic auditing in reducing fraud cases in Nigeria money deposit banks. Global Journal of Management and Business Research: DAccounting and Auditing, 14(3), 154–166.
Popoola, O., Ahmad, A., & Samsudin, R. (2014). Forensic accounting knowledge and mindset on task performance fraud risk assessment. International Journal of Business and Management, 9(9), 118–134.
Rooyen, H. J. N. Van. (2008). The practitioner’s guide to forensic investigation in South Africa. Henmar Publications.
Ruankaew, T. (2016). Beyond the fraud diamond. International Journal of Business Management and Economic Research, 7(1), 474–476.
Shakouri, M. M., Taherabadi, A., Ghanbari, M., & Jamshidinavid, B. (2021). Explaining the Beneish model and providing a comprehensive model of fraudulent financial reporting(FFR). International Journal of Nonlinear Analysis and Applications, 12(Special Issue), 39–48.
Sikka, P. (2009). Financial crisis and the silence of the auditors. Accounting, Organizations and Society, 34(6–7), 868–873.
Snyder, H., Andersen, M., & Zuber, J. (2017, March). Nonprofit Fraud: How Good are Your Internal Controls? Strategic Finance. https://sfmagazine.com/post-entry/march-2017-nonprofit-fraud-how-good-are-your-internal-controls/
Sorunke, O. A. (2016). Personal ethics and fraudster motivation: The missing link in fraud triangle and fraud diamond theories. International Journal of Academic Research in Business and Social Science, 6(2), 159–165.
Srivastava, R. P., & Mock, T. J. (2005). Why we should consider belief functions in auditing research and practice. The Auditor’s Report, 28(2), 1–8.
Sumartono, Urumsah, D., & Hamdani, R. (2020). Skills of the forensic accountants in revealing fraud in public sector: The case of Indonesia. Journal of Accounting and Investment, 21(1), 180–194.
Uniamikogbo, E., Adeusi, A. S., & Amu, U. C. (2019). Forensic audit and fraud detection and prevention in the Nigerian banking sector. Accounting and Taxation Review, 1(1), 177–195.
Weber, J., & Gillespie, J. (1998). Differences in Ethical Beliefs, Intentions, and Behaviours. Business , 37, 447–467.
Wilken, A. (2016). Assessing the relevance of external auditors and forensic accountants when performing fraud risk assessments. North-West University.