The hidden nexus: exploring financial determinants of fraud in Malaysian public listed companies

Financial fraud remains a substantial threat in publicly listed firms in Malaysia, presenting dangers to investors, stakeholders, and the overall economy. This study examined the correlation between financial factors and the incidence of financial fraud in these companies. This study specifically investigated the influence of management performance ability (MPAB) and financial structure ability (FSAB) on the degrees of financial fraud (FFL). The study used a quantitative methodology to examine data from financial statements, corporate governance reports, and documented fraud cases in publicly listed corporations in Malaysia. The study utilised a Random Effect Regression model to address unobserved differences among organisations, resulting in more precise estimations of the effects of independent variables on financial fraud. The results demonstrated strong inverse correlations between both MPAB and FSAB and FFL, highlighting the crucial need of strong financial frameworks and efficient management in reducing fraudulent actions. This study emphasised the necessity for ongoing enhancements in financial structures and management methodologies to establish a corporate climate that is more open and responsible. These findings are essential for policymakers, corporate governance practitioners, and risk management professionals who want to improve the honesty and stability of financial markets, eventually promoting sustainable economic growth and strengthening investor confidence.