The Inducement of Employees' Intention to Commit Corporate Fraud in Public and Private Sector Mediated by Both Inner and External Factors: a Malaysian Perspective

Wong, Ai Lye (2022) The Inducement of Employees' Intention to Commit Corporate Fraud in Public and Private Sector Mediated by Both Inner and External Factors: a Malaysian Perspective. Masters thesis, Tunku Abdul Rahman University College.

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Abstract

Fraud motivation is a non-stop circulation that had disturbing effects on our world’s economy in addition to contributing unnecessary suffering and increased unemployment for the low and middle class. In light of the economic survival is threatened and the practice of new norms resulting from the Covid-19 pandemic crisis, the line separating acceptable and unacceptable behaviour can, for some, become blurred. Therefore, it is vital to analyse empirically the possibility of corporate fraud by using the theory of Fraud Triangle theory, Fraud Hexagon Theory and Theory of Reasoned Action (TRA). Specifically, this research examines the impact of pressure, opportunity, love of money, rationalization, collusion towards employees’ fraud intention. A total of 250 employees’ data were collected who working in either public or private companies in Malaysia for the purpose of answering the four research objectives. The collected data was further analysed using statistical tools of Statistical Package for theSocial Sciences (SPSS) and Partial Least Squares Path Modeling Method withSmart-PLS. The result reveals that the fraud triangle theory has a significant influence on employees’ tendency to commit fraud. Interestingly, collusion is found to be one of the predictors which contributes effect on the employees fraud intention. Yet, it is surprising that, love of money does not serve as an important factor to influence employees fraud intention in Malaysian companies. Besides, this research contributes to the literature of employees’ fraud intention by providing the initial evidence on the mediation role of collusion as an antecedent towards employees’ fraud intention. From a practical perspective, this research demonstrates further insights by evincing the importance of the segregation of duties, establishing a code of conduct and ethics, educating the employees on ethical issues constantly, enhancing the hiring selection and evaluation in the workplace, performing regular assessments related to employee performance, job satisfaction, creating a work environment that decreases stress by building a secure work environment and incorporate stress reduction habits in preventing fraud occurrences in Malaysian companies.