The Antecedents of Fraud Triangle and Integrity in Relation to Asset Misappropriation Behaviour in Malaysia Companies: The Moderating Effect of Perceived Strength of Internal Controls

Tay, Si Wei (2022) The Antecedents of Fraud Triangle and Integrity in Relation to Asset Misappropriation Behaviour in Malaysia Companies: The Moderating Effect of Perceived Strength of Internal Controls. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

Asset misappropriation is the most common sort of fraud in Malaysia. Even though asset misappropriation may seem to be a minor issue that has no effect on the overall health of the business, if left unchecked, it will only worsen and become more difficult to address. Study of local authorities in Malaysia shows asset misappropriation is a big problem in the public sector and is also widespread in other businesses. This topic also is an understudied area of occupational fraud research, and this study fills in some of the gaps by looking at the motivations that lead employees in a variety of industries to misuse company assets. Relying on the Fraud Triangle Theory and Attribution Theory as the theoretical framework, the study examines the effect of Fraud Opportunity, Life Pressures, Rationalisation, Integrity and Perceived Strength of Internal Control on Asset Misappropriation at the workplace in Malaysia. Further, the study intends to verify the perceived strength of internal controls have specific moderates’ effect towards the link between antecedents of fraud triangle and integrity regarding asset misappropriation by using Multi-Group Analysis. With that, a quantitative research study is conducted through the collection of primary data via online survey questionnaires from 177 employees working in Malaysian companies to satisfy the research questions and objectives. The study’s findings shed new light on the topic of asset misappropriation, the subject of little interest in Malaysia prior to this. It is hoped that the findings of this research will help employers better understand what motivates employee misappropriation asset so that preventative measures may be put in place to reduce and eventually eliminate it. Keywords: Asset Misappropriation, Fraud Triangle Theory, Fraud Opportunity, Life Pressures, Rationalisation, Integrity, Perceived Strength of Internal Controls