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Integrating Ethical Values into Fraud Triangle Theory in Assessing Employee Fraud: Evidence from the Malaysian Banking Industry

Author

Listed:
  • Said, Jamaliah
  • Alam, Md. Mahmudul

    (Universiti Utara Malaysia)

  • Ramli, Masitah
  • Rafidi, Marhamah

Abstract

This study attempts to integrate ethical values into the fraud triangle theory in the context of Malaysian banking industry. Primary data were collected through the survey of 108 questionnaires administered to the employees of the top three largest banks in Malaysia. The findings revealed that ethical values were negatively related to employee fraud, and two elements of fraud triangle theory, namely, opportunity and rationalization, were positively related to employee fraud. This implies that high ethical value is crucial to mitigate employee fraud. To minimize employee fraud, the banking industry should reduce opportunities and employee negative rationalization through strong internal control. This study contributes to literature on the occurrences of employee fraud, which is not widely discussed, especially in the context of the banking industry in developing countries.

Suggested Citation

  • Said, Jamaliah & Alam, Md. Mahmudul & Ramli, Masitah & Rafidi, Marhamah, 2020. "Integrating Ethical Values into Fraud Triangle Theory in Assessing Employee Fraud: Evidence from the Malaysian Banking Industry," SocArXiv xpqrs_v1, Center for Open Science.
    • Handle: RePEc:osf:socarx:xpqrs_v1
    DOI: 10.31219/osf.io/xpqrs_v1
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    References listed on IDEAS

    as
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