EFFECTIVE DETECTION AND PREVENTION OF FRAUD: PERCEPTIONS AMONG PUBLIC AND PRIVATE SECTORS ACCOUNTANTS AND AUDITORS IN SAUDI ARABIA


Finance

EFFECTIVE DETECTION AND PREVENTION OF FRAUD: PERCEPTIONS AMONG PUBLIC AND PRIVATE SECTORS ACCOUNTANTS AND AUDITORS IN SAUDI ARABIA

Fraud has metamorphosed into a major global concern. Regardless of size, profitability, or industry, organizations currently face severe challenges concerning economic and operational sustainability in the wake of deliberate and unethical fraudulent acts. The PricewaterhouseCoopers (hereinafter referred to as PwC) (2020) survey revealed that 47% of international firms were affected by fraud compared to 49% in 2018, 36% in 2016, 37% in 2014, and 34% in 2011. The PwC’s (2020) survey respondents reported total losses of 42 billion USD owing to fraud that negatively impacted brands, reputations, and market shares. Ironically, only 56% of the affected organizations conducted investigations, whereas barely one-third of these companies reported fraudulent outcomes to their boards.
Jméno a příjmení autora:

Faisal D. Alfordy

Rok:
2022
Ročník:
25
Číslo:
3
Klíčová slova:
Fraud awareness, fraud detection and prevention methods, fraud detection technology usage, forensic accounting, public and private sectors
DOI (& full text):
Anotace:
Globalization has inevitably transmuted fraud into a transnational hazard and raised significant apprehensions. Fraud affects organizations worldwide irrespective of nature, size, profitability, or…více
Globalization has inevitably transmuted fraud into a transnational hazard and raised significant apprehensions. Fraud affects organizations worldwide irrespective of nature, size, profitability, or industry. The pervasive nature of fraud serves a premise to study the menace further. Hence, this research investigated the perceptions among accountants and auditors on the effectiveness of fraud detection and prevention by public and private Saudi organizations. This research presented an exploratory case study within the Saudi Arabian social, economic, and cultural environment. Data-gathering through inquiries and questionnaires were performed among accountants, internal and external auditors from public and private sectors. The results revealed that accountants and auditors in Saudi private and public firms were highly cognizant on fraud awareness, general guidelines, subsequent responsibilities, and reporting venues. In addition, both sectors were found to have invested extensively in fraud detection and prevention technologies. Also, employees were found not have been regularly trained on fraud prevention and detection. Furthermore, forensic accounting, being a relatively new genre in fraud detection and prevention, is found sparingly utilized among public and private sectors’ organizations. Forensic accounting is yet to be accorded adequate authority in the Saudi context, and was found superficially placed under the Saudi Organization of Certified Public Accountants (SOCPA). Despite qualification, experience, and age being recognized as key elements to Saudi accountants and auditors in fraud detection and prevention, lack of proper training leaves employees with limited dexterity and exposes them to legal repercussions. In general, the current legal infrastructure in Saudi Arabia needs to be revisited to improve effective detection and prevention of fraudulence. This study provided insights into the Saudi Arabian fraud detection & prevention, hardware, infrastructure, and human resources as the contributors of a fraud-free society.
Sekce:
Finance

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