THE DYNAMICS AND CONTROL OF CORPORATE FINANCIAL STATEMENT FRAUD

Author Name: Subhan, Rika Syahadatina

Volume: 01 &  Issue:

Country: Indonesia

DOI NO.: 08.2020-25662434 DOI Link: http://www.doi-ds.org/doilink/11.2020-65867542/

Affiliation:

1. Prodi Akuntansi Fakultas Ekonomi Universitas, Madura,Indonesia

ABSTRACT

This paper offers additional worth insight and knowledge that enhance our understanding of the causes of fraudulent financial statement. These insights are synthesised from contemporary thinking and prior empirical fraud studies. This paper isto give a significant contribution to practitioners in terms of fighting against fraudulent financial statement and academics in terms of developing fraud theory. We acknowledge, imperfect prevention mechanisms, for example, due to lack of adequate information system management, are categorised as a major factor that makes organisations very vulnerable defrauded by their employees. It is true that fraud can be perpetrated by organisational insiders or outsiders. However, the catastrophic threat comes from disgruntle organisational insiders, regardless the level of positions in the company. It is because they are legally authorised to access the company’s systems and know the weaknesses of control systems. In relation to the psychological factors of perpetrators, greed, dignity, and acquisitiveness are highly likely adhered to fraud perpetrators coming from organisational insiders. Such factors arise because a powerful belief that organisation should pay for the perceived inequities.

Key words: Fraudulent Financial Statement, Greed, Dignity, Acquisitiveness