Fraud Triangle from the Perspective of Accountants in the Czech Republic
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Fraud Triangle from the Perspective of Accountants in the Czech Republic Marie Paseková 1 & Jana Helová 1 Miroslava Dolejšová 1
&
# International Atlantic Economic Society 2020
JEL M41 Companies consider the risk of fraud to be insignificant. Therefore, they take few or no preventive measures. However, rationalizations, opportunities and motivations for fraud might be present in all firms. Fraud triangle model theory (Cressey, American Journal of Sociology, 1954) has been utilized in various studies. Authors (Loebbecke et al., A Journal of Practice and Theory, 1989) have used this theory to find the best model for assessing and detecting fraud (Smith, Managerial Auditing Journal, 2005). Various analytic procedures for fraud measurement have been used to predict fraudulent behaviour (Blocher, The Role of Analytical Procedures in Detecting Management Fraud, 1992) and detect the probability of accountants committing fraud (Kwan and Kwan, International Review of Business Research Papers, 2011). Literature reviews and current trends in fraud (Albrecht et al., Information Security Journal a Global Perspective, 2008) have identified fraud triangle peaks and industry differences depending on the length of time an accountant has been in practice, the level of education achieved and the possibility of penalties. Generally, conducting fraud and delinquency research has proven to be challenging and problematic, although this type of research is vital for all enterprises. Similar research has not been completed in the Czech Republic. Therefore, this study will extend the existing literature to include conditions in the Czech Republic. Three research questions have been identified: 1) Are there any circumstances in the company that provide the most opportunities for accounting fraud? (opportunity peak);
* Jana Helová [email protected]
1
Thomas Bata University in Zlin, Zlín, Czech Republic
Paseková M. et al.
2) What are the most common reasons for accounting fraud? (motivation peak); and 3) Do accountants have a legitimate reason to believe that when others cheat, they can do the same? (rationalization peak). These research questions are in line with previous research (Baxevani and Mylonas, Scientific Bulletin – Economic Sciences, 2014; Kolman, The Internal Auditor, 2007), which serves as a baseline for the creation of this research survey. The survey was conducted in 2018 and 2019. A total of 337 accountants and accounting companies in the Czech Republic completed the 18-question online survey with an approximate completion time of 10 minutes. Accounting companies were asked to have the chief account complete the survey. Each potential participant was contacted only once and 128 responses were received (response rate: 38%). The results of qualitative and quantitative preliminary research suggested methods of identifying or eliminating potential fraud threats. The dataset was evaluated using descriptive statistics, a one-sample test of proportions and a chi-square test of independence at a 5% significance level. R
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