Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory

Fraud cases in financial institutions have increased globally in recent years and Malaysia is no exception. Internal actors committed the most frauds, causing 69% of organisations to suffer from their actions, as compared to only 17% organisations dealing with frauds caused by external actors. Movin...

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Published in:Edelweiss Applied Science and Technology
Main Author: Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
Format: Article
Language:English
Published: Learning Gate 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85205690272&doi=10.55214%2f25768484.v8i5.1670&partnerID=40&md5=74a93df2ca47966a3013e59496ea9fee
id 2-s2.0-85205690272
spelling 2-s2.0-85205690272
Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
2024
Edelweiss Applied Science and Technology
8
5
10.55214/25768484.v8i5.1670
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85205690272&doi=10.55214%2f25768484.v8i5.1670&partnerID=40&md5=74a93df2ca47966a3013e59496ea9fee
Fraud cases in financial institutions have increased globally in recent years and Malaysia is no exception. Internal actors committed the most frauds, causing 69% of organisations to suffer from their actions, as compared to only 17% organisations dealing with frauds caused by external actors. Moving towards the future, a greatest concern of fraud in Malaysia revolves around asset misappropriations. It is necessary to understand why people commit fraud to reduce the number of asset misappropriation occurrences. Thus, the research aims to investigate factors influencing asset misappropriation in financial institutions. The research suggested elements in the Fraud Diamond Theory as influencing factors, namely pressure, opportunity, rationalization, and capability. Data for the research was obtained from a survey questionnaire that polled public attitudes with regards to the selected factors influencing asset misappropriation occurrences. 111 respondents participated in the survey, for which the findings showed that only pressure and capability had a significant relationship with asset misappropriation. Opportunity and rationalisation were found to have no significant relationship with asset misappropriation. This implies that personal integrity is a more critical issue, as compared to rationalisation. The research is hoped to help financial institutions by assisting banking and financial sectors, as well as policymakers in managing risks of fraud and developing policies to reduce operational risk. © 2024 by the authors.
Learning Gate
25768484
English
Article
All Open Access; Gold Open Access
author Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
spellingShingle Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
author_facet Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
author_sort Isa F.H.M.; Alias N.; Ali M.M.; Haron N.H.; Sadique R.B.M.; Johan N.
title Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
title_short Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
title_full Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
title_fullStr Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
title_full_unstemmed Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
title_sort Factors influencing asset misappropriation in financial institutions: The application of fraud diamond theory
publishDate 2024
container_title Edelweiss Applied Science and Technology
container_volume 8
container_issue 5
doi_str_mv 10.55214/25768484.v8i5.1670
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85205690272&doi=10.55214%2f25768484.v8i5.1670&partnerID=40&md5=74a93df2ca47966a3013e59496ea9fee
description Fraud cases in financial institutions have increased globally in recent years and Malaysia is no exception. Internal actors committed the most frauds, causing 69% of organisations to suffer from their actions, as compared to only 17% organisations dealing with frauds caused by external actors. Moving towards the future, a greatest concern of fraud in Malaysia revolves around asset misappropriations. It is necessary to understand why people commit fraud to reduce the number of asset misappropriation occurrences. Thus, the research aims to investigate factors influencing asset misappropriation in financial institutions. The research suggested elements in the Fraud Diamond Theory as influencing factors, namely pressure, opportunity, rationalization, and capability. Data for the research was obtained from a survey questionnaire that polled public attitudes with regards to the selected factors influencing asset misappropriation occurrences. 111 respondents participated in the survey, for which the findings showed that only pressure and capability had a significant relationship with asset misappropriation. Opportunity and rationalisation were found to have no significant relationship with asset misappropriation. This implies that personal integrity is a more critical issue, as compared to rationalisation. The research is hoped to help financial institutions by assisting banking and financial sectors, as well as policymakers in managing risks of fraud and developing policies to reduce operational risk. © 2024 by the authors.
publisher Learning Gate
issn 25768484
language English
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accesstype All Open Access; Gold Open Access
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