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Auditors’ Perceptions of the Effectiveness of Fraud Prevention and Detection Methods

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  • Deepa Mangala
  • Pooja Kumari

Abstract

Fraud has emerged as an undesirable offshoot of human greed and pressure to perform in growing corporate world. It has led to erosion of stakeholders’ confidence across the globe. Now, they see the annual reports and other corporate filings with scepticism. Despite increasing instances of fraud, the anti-fraud mechanism of the business organisations is not up-to-date. The present study aims to examine the effectiveness of fraud detection and prevention methods used by corporate sector. A survey of 336 auditors seeking their perception about effectiveness of various anti-fraud methods has been conducted. The findings reveal that corporate governance is the most effective tool against fraud. Use of information technology, timely audit, regular inspection and corporate policies and procedures, also, play a vital role in curbing fraudulent practices in an organisation. Thus, the findings suggest that expenditure on effective anti-fraud methods should not be viewed as an expense; instead, it must be considered as an investment as it saves from the potential losses due to fraud and damage to business stability, revenue and image.

Suggested Citation

  • Deepa Mangala & Pooja Kumari, 2017. "Auditors’ Perceptions of the Effectiveness of Fraud Prevention and Detection Methods," Indian Journal of Corporate Governance, , vol. 10(2), pages 118-142, December.
    • Handle: RePEc:sae:ijcgvn:v:10:y:2017:i:2:p:118-142
    DOI: 10.1177/0974686217738683
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    References listed on IDEAS

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    Cited by:

    1. Ari Fahimatussyam Putra Nusantara & Gugus Irianto & Yeney Widya Prihatiningtias, 2020. "Fraud prevention and detection practices in the perspective of Jember Regency internal auditor," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 377-384, July.
    2. Mwangi Severinah Wanjiru & James Ndegwa, 2020. "The Influence of Fraud Risk Management on Fraud Occurrence in Kenyan listed Companies," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 147-160, October.

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