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Category: ICAS 2016 Proceedings
Author: Ach Maulidi
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Abstract

This paper offers additional worth insights and knowledge to enhance our understanding of the causes of fraud beyond fraud triangle framework by analyzing the worst current corporate scandals from various perspective of theories. These insights are synthesized from contemporary thinking and current research findings aimed to give significant contribution to practitioners in terms of the fighting against fraudulent financial statement and as well as academic environment in terms of developing theory. Undoubtedly, imperfect prevention mechanisms, for example, due to lack of adequate managing information systems, are categorized as a major factor that allows business organizations to become very vulnerable to be defrauded by perpetrators. Financial fraud can be perpetrated by organizational insiders or outsiders. However, the catastrophic threat comes from disgruntle workers, regardless level of positions in that company, who are authorized to access the company’s systems. Insider threats become the most hazardous threat and a very complicated concern to solve because they typically have already known the firm’s system weaknesses. In this case, greed and acquisitiveness from organizational insider threat may arise due to powerful belief that firm should pay for perceived inequities. Accordingly, this paper suggests recommendations in the form of plausible applicable measures to fight against this kind of crime.

Keywords: fraud triangle, fraudulent financial statement, fight against, corporate scandals, prevention, threat references

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