The influence of fraud elements on asset misappropriation: a fraud triangle perspective / Nur Hazilah Zulkaply

Fraud has continuously grown to become a serious issue and becoming a major business problem. It can affect any organization regardless of the sector; either from the private or public sector. The impact of fraud to any organisation is indescribable. Not only it causes financial defeat but it can also result in loss of productivity, loss of confidence among investors as well as loss of excellent employees due to high turnover. Hence, fraud serves as a major concern especially among investors and organisations’ external parties. Despite multiple efforts to combat fraud, fraud has continued to become a serious problem with asset misappropriation to be the most common type of fraud compared to other types of fraud. One of the causes could be due to the lack of understanding on what influence the fraud to happen and the implication of committing fraud. This research examines the perception of the employees of the company on asset misappropriation occurrences. Specifically, this research examines the influence of fraud elements by using the fraud triangle of perceived pressure, perceived opportunity and rationalisation on the occurrences of the asset misappropriation among the employees. Survey was done through online survey form using Google, through electronic mail and through direct, face-to-face approach and the study revealed that that there is a significant linear relationship between perceived pressure and perceived opportunity toward the occurrence of asset misappropriation. This indicates that the existence of pressure and opportunity would motivate fraud occurrence. This research however finds that rationalization does not influence the occurrence of asset misappropriation. This research also may assist the policy makers of the company to implement a preventive measure of fraud.