UNDERSTANDING ACCOUNTING FRAUD MOTIVATION, PROTECTION PROCEDURES, AND FIRMS’ PERFORMANCE: EXTERNAL AUDITORS’ PERSPECTIVE

Abstract

This paper explores accounting fraud motivation, protection procedures, and the impact on firms‘ performance from the perspective of external auditors. Data were collected through semi-structured interviews with highly experienced external public auditors. This paper highlights personal and environmental factors as the two most essential fraud motivations. Examining and checking on the internal audit system‘s strengths and weaknesses are more important in detecting fraud than training and auditing procedures. Besides, the findings show that modern technology can minimize the chances of fraud by providing efficient and timely preventive measures (Halbouni et al., 2016). However, it is difficult for software developers to create systems that address new types of fraud, explaining why human auditing skills are vital in detecting procedures. The findings highlight similarities and differences in technology use in the private and public sectors‘ fraud protection procedures. Furthermore, fraud activities, directly and indirectly, affect revenues, reputation, and customer trust, respectively (Omar et al., 2016). By understanding the motivations for fraud, protection procedures, and the impact on firms‘ performance, this study has the potential to contribute to the development of best practices and effective strategies for preventing, detecting, and managing accounting fraud.