Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran
This study examines ten indicators associated with fraudulent financial reporting (FFR) in Malaysian public listed companies. We hypothesize that three indicators proxy for management rationalization, four indicators proxy for management motives, and three indicators proxy for the opportunity to com...
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Bahagian Penyelidikan dan Jaringan Industri, UiTM Melaka
2012
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my.uitm.ir.674152022-09-27T08:04:15Z https://ir.uitm.edu.my/id/eprint/67415/ Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran Hasnan, Suhaily Abd. Rahman, Rashidah Mahenthiran, Sakthi Financial management. Business finance. Corporation finance Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure Malaysia This study examines ten indicators associated with fraudulent financial reporting (FFR) in Malaysian public listed companies. We hypothesize that three indicators proxy for management rationalization, four indicators proxy for management motives, and three indicators proxy for the opportunity to commit fraud. Our sample consists of 53 fraud firms convicted of securities fraud and 53 no-fraud firms, which were listed on the Bursa Malaysia and for whom complete set of data is available from 1996-2007. With regard to rationalization, we find that prior violations and founders on the board are positively and significantly associated with FFR, and with regard to motive, we find that financial distress is positively and significantly associated with FFR while family ownership is negatively and significantly associated with FFR. Opportunity for fraud proxies multiple directorships on boards and audit quality are positively and significantly associated with FFR. Additionally, the study finds that earnings management in prior years leads to FFR. The findings of this study have important implications for public policy makers in respect of their future efforts in preventing and reducing the occurrences of FFR. The study should also provide useful insights to auditors, regulators, investors, and other financial statement users about the characteristics of fraud firms. By better understanding these characteristics, financial statement users should be in a better position to identify and curtail fraudulent activity in the future. Bahagian Penyelidikan dan Jaringan Industri, UiTM Melaka 2012 Book Section NonPeerReviewed text en https://ir.uitm.edu.my/id/eprint/67415/1/67415.pdf Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran. (2012) In: RIID 2012: Innovation For Sustainable Growth. Bahagian Penyelidikan dan Jaringan Industri, UiTM Melaka, Alor Gajah, Melaka, p. 82. (Unpublished) |
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Financial management. Business finance. Corporation finance Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure Malaysia |
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Financial management. Business finance. Corporation finance Balance sheets. Financial statements. Including corporation reports. Financial reporting. Financial disclosure Malaysia Hasnan, Suhaily Abd. Rahman, Rashidah Mahenthiran, Sakthi Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
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This study examines ten indicators associated with fraudulent financial reporting (FFR) in Malaysian public listed companies. We hypothesize that three indicators proxy for management rationalization, four indicators proxy for management motives, and three indicators proxy for the opportunity to commit fraud. Our sample consists of 53 fraud firms convicted of securities fraud and 53 no-fraud firms, which were listed on the Bursa Malaysia and for whom complete set of data is available from 1996-2007. With regard to rationalization, we find that prior violations and founders on the board are positively and significantly associated with FFR, and with regard to motive, we find that financial distress is positively and significantly associated with FFR while family ownership is negatively and significantly associated with FFR. Opportunity for fraud proxies multiple directorships on boards and audit quality are positively and significantly associated with FFR. Additionally, the study finds that earnings management in prior years leads to FFR. The findings of this study have important implications for public policy makers in respect of their future efforts in preventing and reducing the occurrences of FFR. The study should also provide useful insights to auditors, regulators, investors, and other financial statement users about the characteristics of fraud firms. By better understanding these characteristics, financial statement users should be in a better position to identify and curtail fraudulent activity in the future. |
format |
Book Section |
author |
Hasnan, Suhaily Abd. Rahman, Rashidah Mahenthiran, Sakthi |
author_facet |
Hasnan, Suhaily Abd. Rahman, Rashidah Mahenthiran, Sakthi |
author_sort |
Hasnan, Suhaily |
title |
Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
title_short |
Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
title_full |
Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
title_fullStr |
Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
title_full_unstemmed |
Indicators of fraudulent financial reporting: Malaysian evidence / Dr. Suhaily Hasnan, Prof. Dr. Rashidah Abd. Rahman and Prof. Dr. Sakthi Mahenthiran |
title_sort |
indicators of fraudulent financial reporting: malaysian evidence / dr. suhaily hasnan, prof. dr. rashidah abd. rahman and prof. dr. sakthi mahenthiran |
publisher |
Bahagian Penyelidikan dan Jaringan Industri, UiTM Melaka |
publishDate |
2012 |
url |
https://ir.uitm.edu.my/id/eprint/67415/1/67415.pdf https://ir.uitm.edu.my/id/eprint/67415/ |
_version_ |
1745565370149765120 |