An empirical investigation of fraud risk assessment and knowledge requirement on fraud related problem representation in Nigeria
Author(s):
Oluwatoyin Muse
Johnson Popoola (College of Business, School of Accountancy,
Universiti Utara Malaysia, Sintok, Malaysia)
Ayoib B
Che-Ahmad (College of Business, School of Accountancy,
Universiti Utara Malaysia, Sintok, Malaysia)
Rose Shamsiah
Samsudin (College of Business, School of Accountancy,
Universiti Utara Malaysia, Sintok, Malaysia)
Abstract:
Purpose
– The paper aims to investigate Task
Performance Fraud Risk Assessment (TPFRA) and Knowledge Requirement (KR) of the
forensic accountant and auditor on Fraud-Related Problem Representation (FRPR)
in the Nigerian public sector.
Design/methodology/approach
– The study used cross-sectional design and
400 survey questionnaires. The respondents are real professional people
(auditors and forensic accountants in the Nigerian public sector) as true
representatives to enhance the generalization of the outcomes. A total of 36
indicator items was measured on five-point Likert scale from 1 (strongly
disagree) to 5 (strongly agree). Partial Least Square – Structural Equation
Modelling 2.0 3M and IBM SPSS Statistics 20.0 were used as the primary
statistical analysis tool for the study.
Findings
– The results of the present study confirm the
positive relationship between KR on TPFRA, positive relationship of KR on FRPR
and positive relationship of FRPR and TPFRA. Specifically, the results revealed
that FRPR positively mediates the relationship between TPFRA and KR (forensic
accountant and auditor) in the areas of fraud prevention, detection and
response.
Research
limitations/implications
– The first limitation deals with fraud and
corrupt practices in a developing country, Nigeria. Examining the mediating
influence of FRPR on KR and TPFRA in the public sector could be considered as
sensitive and raise the issue of bias. The second limitation is the adoption of
cross-sectional design in which data are collected at one point in time.
Researchers are encouraged to use a longitudinal design to explore interactions
between KR, FRPR and TPFRA.
Practical implications
– This empirical study has revealed the value
of KR (forensic accountant and auditor) as a significant capability requirement
in the workplace. In addition, it shows the importance of FRPR as an important
mental state in decision-making or judgment and also the significance of FRPR
as an important mediating variable on KR and TPFRA.
Originality/value
– No nation is immune to fraud, and loss due
to fraud in the public sector is enormous and costly; the result of this
research will improve the KR of auditors and forensic accountants in the areas
of fraud detection, prevention and response. It will also contribute to the
regulatory, legal and institutional frameworks in accounting and auditing
systems in Nigeria and portend an increase in demand for forensic accountants.
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