FINANCIAL STATEMENT FRAUD

Abstract

Prevention is better than cure. Past actions with adverse effects could be used as guidance for future generations. The occurrences of the Enron scandal and the WorldCom scandal are two examples of financial statement fraud cases that involved accounting professionals. Such events inflict the companies with substantial financial losses and give the accounting profession a bad reputation. Thus, this study was carried out to identify the determinants that drive accounting practitioners to commit such frauds by using the Theory of Planned Behaviour, which explains three factors of human behaviour that could influence someone’s intention in doing something. A survey questionnaire was used to collect data among potential accounting practitioners in a public university in Selangor. The results showed a significant positive relationship between subjective norms and perceived behavioural control towards behavioural intentions to commit financial statement fraud. Based on the findings, it is suggested that preventive measures against fraud in financial statements can be done by providing potential accounting practitioners with suitable knowledge and instilling awareness among them about the importance of focussing on ethical considerations when making decisions.