ICAS Proceedings

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Category: ICAS 2016 Proceedings
Author: Ach Maulidi
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Abstract

The main aim of this study is to deal with fraudulent financial statement in business organizations. This study suggests that whistleblowing system and staff awareness of fraud empirically can minimize and mitigate financial statement fraudulently reported. Apart from that, this study also finds several aspects that can help firms to establish effective whistleblowing system and effective reporting mechanisms that might encourage an individual to report malpractice or wrongdoing occurring in the firm. In other words, based on this study, the most effective factors that can run whistleblowing system effectively are proactive safety/protection program, easy accessibility of exposure for employees, followed up whistleblower's reports or complaints, and financial incentives (reward) program, and, this study also confirms that online forms constitute the most effective reporting mechanism to blow misstatement whether caused by fraud or error.

Keywords: Fraudulent financial statement, business organizations, whistleblowing system, staff awareness of fraud

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