Suluo, S. J., & Mayemba, B. K. (2023). Determinants of bank employees’ engagement in asset misappropriation in Tanzania. Business Management Review, 26(1), 92-103. Web.
The article “Determinants of Bank Employees’ Engagement in Asset Misappropriation in Tanzania” by Suluo and Mayemba refers to this type of occupational fraud as asset misappropriation. The study is based on the derivation of factors influencing the decision to engage in this kind of activity using the “fraud triangle theory’s elements of pressure, opportunity, and rationalization” (Suluo & Mayemba, 2023, p. 92). As subcategories, the study of fraudulent behavior and strategies for limiting it is highlighted.
Within the framework of the article under examination, a study of employee motivation based on the fraud triangle is presented. The authors point out that if there were an opportunity to commit illegal behavior, most studied participants would have done it. At the same time, the article stressed that the presence of pressure and rationalization does not significantly impact this decision.
The leading causes of fraudulent behavior are “inadequate supervision, poor segregation of duties, weak management, and insufficient system control” (p. 95). These aspects pose significant risks in internal controls and increase the possibility of asset misappropriation. The Tanzanian banking sector on which the article is based does not have these weaknesses, as it implements robust internal control systems and surveillance mechanisms (Suluo & Mayemba, 2023). These methods are effectively used for detecting fraud.
The presence of fraud schemes can significantly impact the individuals involved in them and the organization itself. This may result from legal liabilities and job loss at the individual level. This may be followed by various fines and loss of income, which will negatively affect employees’ lives. On the part of the organization, fraud schemes can also lead to problems with the law, financial losses, deterioration of reputation, and deprivation of essential clients and stakeholders. One of the policies that can be recommended to prevent fraud is to pay attention to ethical training to reduce temptation among employees.
Han, J. (2023). How does governance affect the control of corruption in India? A configurational investigation with Fs/QCA. Economies, 11(2), 43. Web.
This article considers corruption as the primary category of fraud. Inefficient governance is considered a subcategory that leads to this problem. In the context of the study of corruption in India, the authors show that the central pressure and reason for rationalizing an illegal action is the lack of regulatory measures on the part of organizations and the government.
Therefore, the article draws upon weak existing internal controls in place, which do not pay attention to the multidimensional nature of governance and its impact on the occurrence of corruption. The authors emphasize that “a relatively low level of human resource development dimension is a core causal configuration that induces a high control of corruption” (Han, 2023, p. 14). Therefore, the main disadvantage is the lack of access to work with human resources.
The development of educational governance and the formation of vital human resource management can be used as potential methods for detecting fraud. Limiting the problem under discussion can help reduce the possibility of a collision with litigation for individuals and organizations. This is because it can lead to financial losses for both parties. Moreover, employees may lose their place in the company and receive fines. The company’s consequences may be deterioration of reputation and loss of customer trust. As a policy, it is necessary to strengthen existing internal controls and educate staff on the ethical and legal side of involvement in fraudulent schemes.
Xiuguo, W., & Shengyong, D. (2022). Analyzing financial statement fraud detection for Chinese listed companies using deep learning. IEEE Access, 10, 22516-22532. Web.
The primary category discussed in the article by Xiuguo and Shengyong is financial statement fraud. As a subcategory, the need to introduce intelligent financial statement fraud detection systems is considered to help limit the problem among Chinese companies. When considering the problem through the fraud triangle, the main reason for committing this illegal action becomes “inaccurate reports of CPAs and auditors” (Xiuguo & Shengyong, 2022, p. 22516).
In addition, the company’s lack of supervision and monitoring contributes to rationalization and pressure on employees. Currently, traditional manual detection approaches are “impractical for the management of big semi-structured and unstructured financial data” (Xiuguo & Shengyong, 2022, p. 22517). This weakness in internal controls contributes to increased financial statement fraud cases.
As an approach to detecting fraud, it is necessary to revise the existing strategy to update and improve it. In addition, a potential solution may be the introduction of deep learning technologies. The main contribution of fraud schemes to individuals is the collision with legal proceedings, dismissal, and imposition of fines for the illegal action committed.
On the part of the organization, financial statement fraud can lead to financial losses and deterioration of activities due to the loss of employees. Moreover, possible “losses to shareholders with negative impacts on capital markets” (Xiuguo & Shengyong, 2022, p. 22516). To prevent fraud, it is necessary to introduce new technologies, such as deep learning, improving work strategies, and regulation of activities as policy improvement.
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