The Influence of Perceived Pressure, Opportunity and Rationalisation on the Intention of Employees to Commit Fraud in Malaysian Companies: Employee's Capability as a Moderator

Wong, Chun Hing (2022) The Influence of Perceived Pressure, Opportunity and Rationalisation on the Intention of Employees to Commit Fraud in Malaysian Companies: Employee's Capability as a Moderator. Final Year Project (Masters), Tunku Abdul Rahman University College.

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Abstract

In recent years, the fraud environment has become more complex, especially with the COVID-19 pandemic (Pham 2022). PwC Malaysia (2020) has discovered that most Malaysian companies are not doing enough to measure or disclose their incidents of fraud, which means they might not have a proper understanding of the root causes of the crisis that impacted them. Employee commits fraud will lead to negative effects to the Malaysian companies when the corporate governance mechanism is weak (Nawawi & Salin 2016). Hence, this study aims to examine the influence of perceived pressure, opportunity and rationalisation on the intention of employees to commit fraud in Malaysian companies and employee’s capability as a moderator. The data was collected from 119 of the employees from Malaysian companies through online survey questionnaire in order to satisfy the research questions and objectives. These findings showed the intention of employee to commit fraud during COVID-19 pandemic can be predicted when employees’ pressure is high, when opportunity is available in their company as well as employee rationalises his or her unethical behaviour in order to cover their action to avoid sanction. In this study, the capability of the employee (job tenure) as the moderator has been explored to examine whether the fraud triangle theory can influence the intention of employees to commit fraud. However, this study found that the capability is not sufficient as the outcomes of this study had explored there are not statistically significant relationship between all independent variables (perceived pressure, perceived opportunity and rationalisation) and employee’s fraud intention when capability of the employee (job tenure) as the moderator. The findings in this study may assist the academic community may further consider the findings of this research that pressure, opportunity and rationalisation have the impact on the fraud incidents in Malaysian companies by providing a curriculum to overcome these problems. Furthermore, it also helps Malaysian companies identify the factors leading to employees' intent to commit fraud in order to protect Malaysian companies from any unethical act by employees. These findings may also help them to monitor the employee's work and strengthen the internal control of the company based on the factors in order to reduce the fraud that occurs.