Journal articles on the topic 'Bankruptcy frauds'
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Dimitrijević, Dragomir, and Dejan Jovanović. "Economic Motives and Willingness of Young People to Participate in Fraud." Naše gospodarstvo/Our economy 68, no. 3 (September 1, 2022): 18–27. http://dx.doi.org/10.2478/ngoe-2022-0015.
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Abstract Fraud is linked to economic and financial pressures that force people to commit it. Any fraud, regardless of the gender and age of the fraud perpetrators, inevitably leaves a short-term or long-term negative mark on society’s economy. Many financial frauds in the past (Enron, WorldCom, Parmalat) have left profound negative consequences on global financial markets. Such “financial strikes” on the financial markets led to financial losses of many companies (not only those in which frauds were committed), the dismissal of many workers, and even the bankruptcy of companies. Successful detection and prevention of fraud imply the harmonious and efficient operation of several factors. One of them understands people’s attitudes towards fraud. It is necessary to understand what motivates an individual to commit fraud and the conditions under which someone would commit fraud. Plenty of resources and time have been invested in understanding the motives for adult fraud, i.e., mature people. Experience has shown that it is much more challenging to educate people of that era about the harmful effects of fraud and thus convince them not to commit fraud. For these reasons, the subject of this paper is the consideration of the attitudes of the younger population towards fraud in Serbia. More precisely, the paper discusses the attitudes of young people aged 18 to 30 regarding motives, pressures, and opportunities to commit fraud, participate in corruption, or offer bribes. The main objective is to indicate the tendency of young people to participate in fraud and examine whether respondents’ gender influences their willingness to participate in fraud. The research results suggest that, according to young people, the main motive why someone would participate in fraud is financial gain and that young people would participate in fraud only if they could get medical intervention sooner. They also believe that fraud is most prevalent in public administration and that men are more prone to fraud than women, but that the influence of gender is very small.
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Eutsler, Jared, Erin Burrell Nickell, and Sean W. G. Robb. "Fraud Risk Awareness and the Likelihood of Audit Enforcement Action." Accounting Horizons 30, no. 3 (May 1, 2016): 379–92. http://dx.doi.org/10.2308/acch-51490.
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SYNOPSIS Prior research indicates that issuing a going concern opinion to financially stressed clients generally reduces the risk of litigation against the auditor following a bankruptcy (Kaplan and Williams 2013; Carcello and Palmrose 1994). However, we propose that a going concern report may indicate prior knowledge of financial distress, an important fraud risk factor, and this may have repercussions for the auditor if a fraud is subsequently uncovered. Consistent with counterfactual reasoning theory, experimental research suggests that a documented awareness of fraud risk actually increases the likelihood of litigation against the auditor following a fraud (Reffett 2010). This concern has been echoed by the professional community (AICPA 2004; Golden, Skalak, and Clayton 2006) and may be exacerbated by the current outcome-based regulatory environment (Peecher, Solomon, and Trotman 2013). To examine this issue we review Auditing and Accounting Enforcement Releases (AAERs) issued by the Securities and Exchange Commission (SEC) for alleged financial reporting frauds between 1995 and 2012. Results suggest that going concern report modifications accompanying the last set of fraudulently stated financials are associated with a greater likelihood of enforcement action against the auditor. This finding is consistent with counterfactual reasoning theory and suggests that, from a regulatory perspective, auditors may be penalized for documenting their awareness of fraud risk when financial statements are later determined to be fraudulent.
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Tandon, Deepak, and Neelam Tandon. "Ballooning Non-Performing Assets in Indian Banking and Insolvency and Bankruptcy Code." International Journal of Political Activism and Engagement 6, no. 1 (January 2019): 1–24. http://dx.doi.org/10.4018/ijpae.2019010101.
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The Indian Banking sector is witnessing a phenomenal deterioration of asset quality, raising potential losses for not making enough provisions or setting aside capital to combat the non-performing assets. The aftermath of this is that the sustainability of robust banking is becoming a big question. Over the period of time, NPAs and bad loans have adding to a spiralling manner in Indian Banks. In this data-driven banking, various frauds have occurred due to lapses in operational risk, and non-adherence to procedures. Despite the treatment of stressed assets, prompt corrective action as per asset quality report by regulators but results are appearing at a very slow pace. Strength and sustainability of the credit growth is the need for robust banking in the times to come.
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Khan, Mansoor. "International Anti-Money Laundering Measures and Professional." International Journal of Business and Management Research 9, no. 3 (September 10, 2021): 307–19. http://dx.doi.org/10.37391/ijbmr.090309.
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Money laundering is one of the biggest and the fastest growing problems in the contemporary world. It is seen that in legitimate economy most of the dirty money i.e. 38.6% comes from the investment fraudulent schemes, bankruptcy fraud and corporate frauds whereas, 27.5% comes from drug trafficking. This rising trend of money laundering and other financial frauds are due to several reasons, which include the activities in businesses that do not comply with professional ethics. The current research is a qualitative research that has used secondary data to derive the results. Because the study followed a deductive approach, the results of the study have been derived by utilising the existing theories and established data from published literature and different reports. The analysis of the obtained data has been conducted in the form of content analysis to attain the objectives of the current study. The findings of the study suggest that the international organisations have taken several steps to ensure the reduction of money laundering by imposing several unified acts based on the Vienna Convention and the Palermo Convention. It has also been found that ethically compliant professional activities also play an integral part against money laundering. Some of these activities have been reported as forming strong codes of conduct for monetary operations, informing the bad repercussions of participating in money laundering activities, and having proper control and management strategies in position that can have adequate monitoring on institutional improper conduct. The study recommends that every state should have regulated and monitored free trade zones as they are often used as the cornerstone of money laundering. Moreover, a centralised reporting system of the financial institutions have also been recommended, alongside the establishment of a regulatory body for the lawyers and accountants.
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Ilter, Cenap. "Group of companies and inter-company fraud: a case from Turkey." Journal of Financial Crime 23, no. 2 (May 3, 2016): 427–40. http://dx.doi.org/10.1108/jfc-12-2014-0064.
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Purpose This paper aims to present a real case of inter-company fraud where the Group’s Bank lent money to a Group company and was never repaid. The company generates its own cash, but instead of repaying its debt to the Bank, it funds other Group companies. Considering the Bank as being a public depository institution and its illiquid situation, the case presents a fraud within the Group. In this regard, the paper is considered to be an exemplary case for the accounting literature. Design/methodology/approach The paper analyses one of the Group Company’s audit reports for the years 2003 and 2004 and explains the type of frauds committed by the Company’s management. The study approximates the total US dollar figures that were inappropriately transferred to the other Group’s companies in 2003. Findings The study examines the real case and discusses the reasons that led to the Group’s bankruptcy. Lack of governmental controls may lead to bankruptcy of banks that have been abused by its owners by transferring loans to other group companies exceeding the legal limits observable by the banks. Practical implications Auditors, accountants and accounting lecturers, as well as professors, talk about fraudulent accounting practices. The study explains a specific accounting fraud case in a group of companies. It explores the type of inter-company money transfers without a valid base. The author is of the opinion that readers with an accounting background will benefit from reading the case. Social implications Economics is the study of allocation of scarce resources to the best use. Public’s savings must be directed to the companies that produce the value added to the society. On the other hand fraudulent money transfers within the group companies involving bank(s) may distort this allocation. Public money-deposits might be wasted by dishonest business owners. The study is aimed to disseminate this information to public in general. Originality/value The case study has been built on a real audit report from Turkey. The names and the locations of the companies have been changed, and the figures have been approximated in US dollar terms. The events and findings on the audit reports have not been changed, and each fraudulent event has been individually discussed.
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Tanti Wulandari, Andrianto, and Ma’ruf Syaban. "Praktik Fraud Dalam Kasus Kepailitan Perusahaan." Majalah Ekonomi 26, no. 2 (December 21, 2021): 82–96. http://dx.doi.org/10.36456/majeko.vol27.no2.a4741.
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This research aims to knowing Fraud Practices that occur in the Bankruptcy process in a company such as well as fraud in the implementation of the process of recording financial statements, effectiveness Internal control, strengthening the code of ethics and triggering the attitude of the Company's leaders. This research approach uses descriptive qualitative research methods and uses Inductive data analysis. Through triangulation techniques, researchers conduct data mining regarding fraud that occurred before the company was declared bankrupt by using data collection techniques with interviews with companies and curators who help deal with this case and then observe the object of research on the data related to fraud. The results of the study show that the practice of fraud often occurs in companies experiencing bankruptcy, in this case in several Processes settlement of bankruptcy, the company has the potential for fraud to occur in it, including Fraud in the Company's financial process, one of which is the Board of Directors combining finance personally with the Company's finances, in addition at the time of the bankruptcy determination tracing only based on the facts of assets alone does not consider the existence of financial statements owned by the company in previous periods. Conditions for Fraud This causes the company to go bankrupt.
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Fauzia, Ika Yunia. "MENDETEKSI KEBANGKRUTAN SECARA DINI PERSPEKTIF EKONOMI ISLAM." EKUITAS (Jurnal Ekonomi dan Keuangan) 19, no. 1 (February 2, 2017): 90. http://dx.doi.org/10.24034/j25485024.y2015.v19.i1.1758.
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Early bankruptcy detection can be carried out well when an entrepreneur implements integrity and competence in managerial systems, accounting reporting systems, capital structure usage system and business security system from fraud. Related to bankruptcy, Islamic economics recognized iflas (bankruptcy) and muflis (bankrupt entity). A law subject to a muflis is known as al-Hajr. This is a qualitative research with linear snowball method used as data collection technique. 10 of entrepreneurs who went bankrupt were interviewed. The interview rolled like a snowball for one by one informant was interviewed persuasively to gain important information on their causes of bankruptcy. Results of this study explained that the majority of the bankruptcy was caused by the use of capital structure that did not conform qualifications, followed by the lack of proper accounting reporting, poor management systems, lack of professionalism and fraudulence from internal and external aspects.
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Aprillia, Frida, Iwan Supriyanto, Miranti Handayani, Susie Sugiarti, Dorit Hartini, and Arman Syah Putra. "The Relationship Between Internal Control And Compensation Appropriateness For Accounting Fraudulent Actions In Retail Companies." International Journal of Educational Research & Social Sciences 3, no. 3 (June 25, 2022): 1220–30. http://dx.doi.org/10.51601/ijersc.v3i3.379.
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The background of this research is how to find accounting fraud in a retail company, which consists of internal control variables and compensation suitability. Therefore, with accounting fraud, it can be prevented from an early age so that retail companies can continue to move forward in the future. The method used in this study is to use the literature review method and use quantitative methods by conducting a survey to 22 retail companies in order to find out frauds that exist in retail companies. The problem in this research is how to find out accounting fraud in a retail company that raises variables from internal control and compensation suitability with the two variables, it will be known what fraudulent actions occurred in retail companies so that retail companies can progress and develop so that they do not the loss is getting worse. The purpose of this study is how to find out accounting frauds in a retail company, because the fraud can make a retail company close and go bankrupt. Therefore, with preventive measures, it can be seen what things can prevent the company from cheating.
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Irawan, Justin Axel, and Weli Weli. "FRAUD PENTAGON AND POTENTIAL BANKRUPTCY AT PROPERTY & REAL ESTATE COMPANY." AJAR 5, no. 02 (August 27, 2022): 145–69. http://dx.doi.org/10.35129/ajar.v5i02.341.
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The purpose of this study is to analyze the effect of indicators on pentagon fraud on potential bankruptcy in property & real estate companies for the 2018 - 2020 reporting year. Pentagon fraud consists of indicators of pressure, rationalization, capability, arrogance, and opportunity while potential bankruptcy uses the Zmijewski model. Data was collected using content analysis methods from financial reports and annual reports obtained from the official website of the Indonesia Stock Exchange (IDX) and the company's official website. The method of data analysis was carried out using regression analysis with the help of SPSS software. The results of the analysis of 129 company report data show that only one indicator of the fraud pentagon has an effect on the potential for bankruptcy, namely pressure. There is no empirical support for other indicators, namely Rationalization, Capability, Arrogance and Opportunity for potential bankruptcy. This study provides a theoretical contribution to the study of the fraud pentagon and the potential for bankruptcy. A better understanding of indicators of fraud enables companies to prevent potential bankruptcy.
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Reddic, Willie, Sandra W. Shelton, and Georgi K. Shmagel. "A Repeat Offender of Corruption: South MunaiGas Case Study." Journal of Forensic Accounting Research 2, no. 1 (October 1, 2017): A91—A107. http://dx.doi.org/10.2308/jfar-51930.
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ABSTRACT Fraud is a serious and growing international problem, and can greatly affect a company's performance. The current case highlights the impact that culture can have on corporate corruption through the culture of a specific organization, as well as through the broader culture of a society. In this case, Russian NorthOilService (NOS) acquired 98 percent of the shares of the near-bankrupt Kazakh drilling company, South MunaiGas (SMG) in 2007. NOS management realized that SMG's weak financial standing was caused by corporate fraud and corruption, among other factors. Unfortunately, NOS was unable to prevent the new management team of SMG from committing fraud, despite NOS's anti-fraud efforts after acquisition. This actual case study focuses on the accounting and other frauds perpetrated by the SMG management team and the anticorruption measures implemented by NOS. It addresses fraud, bribery, corruption, and misappropriation of assets through inappropriate procurement procedures, in a cultural environment differing substantially from U.S. corporate contexts. This case is suitable for use in auditing, corporate governance, and fraud examination courses.
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Попова, Светлана, Svetlana Popova, Ольга Зотикова, Olga Zotikova, Светлана Ливадина, and Svetlana Livadina. "Methods of diagnostics of fictitious and deliberate bankruptcy on the basis of financial statements." Services in Russia and abroad 8, no. 9 (December 24, 2014): 56–64. http://dx.doi.org/10.12737/10796.
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In the current situation in the field of competition, globalization and integration of the world economy a modern organization must be highly competitive, financially stable, with high adaptation to changes in internal and external environment. Sharp fluctuations in external conditions, particularly complicating the process of management, may lead the company to bankruptcy. Bankruptcy can be related to numerous credit and financial relations, and is characterized by such a state of an organization in which it is impossible to pay obligations. In a situation where the cash amount of liabilities exceeds a certain limit, individuals and legal entities are declared insolvent, that is bankrupt. At the same time they cease all activities, including commercial one. Managers experiencing financial difficulties can protect theirr organization from closing via initiation of bankruptcy proceedings, searching for opportunities to restore its solvency. This article presents a systematic form data on the effect of fraud in bankruptcy to change the balance sheet items and income statement of the organization. The article indicates the important role of accounting (financial) statements, which allow to timely evaluate the property and financial position of the organization, to design a successful forecast of its operation. Authors present a list of suspicious transactions that have a negative impact on the financial and economic state of bankruptcy, which is based on analysis of existing experiences of diagnosis of fictitious and deliberate bankruptcy. The results can be used in the professional activity of managers and specialists, as well as a mechanism for improving diagnostic signs of fictitious and deliberate bankruptcies, in particular, for experts and arbitration managers.
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Salim, Rusnaldi. "PERLINDUNGAN KONSUMEN DALAM KEPAILITAN." Jurnal Hukum 36, no. 1 (June 8, 2020): 25. http://dx.doi.org/10.26532/jh.v36i1.11195.
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This study aims to provide an explanation of the consumer protection process in the event that business actors experience bankruptcy and the process of dispute resolution between producers and consumers against producers who fall bankrupt in realizing consumer protection in accordance with positive legal provisions in Indonesia. This study uses a Juridical Empirical Method. The results obtained from this study are the process of resolving consumer disputes in the event that a business actor goes bankrupt based on positive law in Indonesia can be pursued using the litigation and non-litigation channels. Settlement through non-litigation channels is carried out by means of Mediation, Conciliation and Arbitration. The responsibility of the company / business actor towards consumers if the company has been declared a fraud, namely by paying compensation in accordance with a written agreement that has been agreed by both parties. This step was taken to achieve consumer protection.
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Кубанцев, Сергей, and Sergey Kubantsev. "Criminal Liability for Unlawful Actions in Bankruptcy in the USA." Journal of Russian Law 2, no. 1 (December 12, 2013): 113–23. http://dx.doi.org/10.12737/1822.
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The article describes the application of criminal law in the United States to persons who commit crimes during or immediately before of the bankruptcy, initiated into the United States. The focus is on the judicial interpretation of legislative criteria bankruptcy fraud.
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O'Bryan, David W., Jeffrey J. Quirin, and Mary Jo Goedeke. "Tax Return Analysis in a Fraud Examination: The Case of the Bankruptcy Auditor." Journal of Forensic Accounting Research 5, no. 1 (August 4, 2020): 123–41. http://dx.doi.org/10.2308/jfar-19-015.
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ABSTRACT The tax return is often a key piece of evidence in a forensic accounting engagement. Forensic accounting students need to understand what a tax return can tell its reader about the taxpayer. This case is designed for an introductory or advanced course in fraud examination or forensic accounting. Students are placed in the hypothetical role of a person beginning a job as a bankruptcy auditor with the United States Trustee Program. The bankruptcy auditor must utilize two consecutive years of tax returns to determine the primary sources of income and assets for the debtor. Information from the tax returns will be compared to the bankruptcy petition to identify red flags that could indicate the debtor has committed fraud or abuse of the bankruptcy process. Successful completion of this case requires students to integrate skills from auditing, taxation, business law, and forensic accounting and communicate findings in a written report.
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Nainggolan, Dony. "FRAUD PENTAGON DAN ANCAMAN KEBANGKRUTAN STUDI PADA PERUSAHAAN PERBANKAN." BALANCE: Jurnal Akuntansi, Auditing dan Keuangan 19, no. 2 (February 7, 2023): 172–202. http://dx.doi.org/10.25170/balance.v19i2.3882.
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The purpose of the study was to determine the effect of the fraud pentagon on the threat of bankruptcy in banking companies listed on the Indonesia Stock Exchange in 2018-2020. The fraud Pentagon consists of five indicators namely external pressure, effective monitoring, auditor turnover, director turnover and the number of frequent CEO photos. While the threat of bankruptcy is measured by the X-Score. The method of data analysis is descriptive and hypothesis testing using multiple linear regression analysis. The research sample is 122 financial statements from 42 banking companies listed on the Indonesia Stock Exchange in 2018-2020. The results showed that external pressure variables and changes in auditors had an effect on the threat of bankruptcy. While the variables of effective supervision, the change of directors and the number of CEO photos that often have no effect on the threat of bankruptcy
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Akbar, Nahruddien. "Konstruksi Akuntansi Kerugian, Praktik Kepailitan Mengungkap Fraud Laporan Keuangan Klien." JRB-Jurnal Riset Bisnis 3, no. 1 (October 1, 2019): 9–19. http://dx.doi.org/10.35592/jrb.v3i1.976.
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The purpose of this study is to interpret the construction of accounting losses in disclosing fraud and the bankruptcy practices of client financial statements. The research method used is a qualitative method - the interpretive paradigm with a phenomenal approach with method triangulation is done by comparing information or data in different ways. To obtain the truth of reliable information and a complete picture of certain information, researchers can use interview and observation or observation methods to check the truth. In addition, researchers can also use different informants to check the correctness of the information. Triangulation of this stage is done if the data or information obtained from the subject or research informants is doubtful. The results of this study were filing bankruptcy at the Commercial Court involving a supervisory judge and curator. In determining the validity of accounts payable by a supervisory judge used the science of forensic accounting and loss accounting, with the curator in charge of distributing bankruptcy (assets) to creditors in the order of division of property for separatist creditors, Preferred creditors and congruent creditors (creditors who have no collateral). In general, fraud actions carried out by debtors are by hiding assets and sales while fraud is carried out with the motive to obtain bankruptcy (assets).
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Mădălin-Mihai, Moțoc. "ESTIMATION OF BANKRUPTCY RISK BASED ON AUDIT OPINIONS: CASE STUDY IN ROMANIA." Acta Scientiarum Polonorum. Oeconomia 20, no. 3 (February 1, 2022): 33–43. http://dx.doi.org/10.22630/aspe.2021.20.3.23.
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In a world focused on growth, capital accumulation and continuous economic development, it is important to build safety levers to ensure that investors see a return on their investments. Media outlets, brokers, financial institutions and the business environment are now referring, more than ever, to investment policies not only of companies, but also of individuals with sustainable economic capital. Platforms such as Forex, e-Toro, Capital.com, Libertex, cryptocurrency trading platforms and free access to the Stock Exchange now make it extremely easy for third-party investors, with promises of significant returns in a very short period of time. But are all these exhortations and “marketing guns” directed at individuals’ finances devoid of speculative interest? The purpose of this paper is to identify a model of bankruptcy risk estimation that is based on the opinions of audit companies regarding the reasonableness of annual financial statements and their associated fraud risk. This paper presents an empirical approach to the insolvency phenomenon, based on the opinions of the auditors who classify the audited companies as having an associated fraud risk. The study was conducted at the level of companies on the main trading market of the Bucharest Stock Exchange. The results show that an audited company as having classified by auditors as an associated fraud risk is at least one step closer to bankruptcy, as opposed to companies without an assessed risk of associated fraud. The ability of audit companies to contribute to bankruptcy risk estimation models by flagging fraud risk, based on analysis of financial statements, represents a recurring problem in the specialized literature. This paper brings added value in establishing viable models of bankruptcy risk for big companies on the market.
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Singh, Kanwal D. P., and Anant Vijay Maria. "Bankruptcy Fraud and Victim Redressal System: A Time for Change." Journal of Victimology and Victim Justice 2, no. 2 (August 5, 2019): 184–201. http://dx.doi.org/10.1177/2516606919841792.
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The white-collar crimes in India are either underreported or brushed away due to crony capitalistic tendencies. The non-reporting of such crimes renders the victims without any due redressal, which in turn leads to the catastrophic problem of non-availability of an appropriate legal framework or statistics to address the core problem. This then leads to the bigger problem of victimology with respect to white-collar crimes in India. The world faced a similar problem and rather a peculiar one when the US economy was in shambles due to the subprime crisis wherein the banks, regulatory framework, Congressmen and many other parts of the state machinery were part of the inevitable downward spiral of the US economy. Several decades of investigations and analysis of the subprime crisis of 2008 led to the juxtaposition of bankruptcy fraud and its redressal by victim-oriented schemes. The innocent victims had no remedy left except for prosecution which also was not taken seriously by the Attorney General of the USA. This article, thus, analyses the menace of bankruptcy fraud qua its impact on the victims. The article is divided into three parts: Part I analyses the US bankruptcy legal framework and its victim compensation schemes. Part II analyses the UK position of the same while discussing the recent framework for redressal of Insolvency Services and Victim Compensation. Part III analyses India’s current Insolvency and Bankruptcy Code, 2016, the offences under the said Code and the need for its redressal and a greater need for a victim-oriented scheme in order to protect the framework and the innocent victims suffering due to bankruptcy fraud.
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Juškaitė, Gintarė. "Intentional bankruptcies and methods of detection." Buhalterinės apskaitos teorija ir praktika, no. 26 (January 12, 2023): 3. http://dx.doi.org/10.15388/batp.2022.47.
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Bankruptcy can happen to any company, but it is very difficult to identify intentional bankruptcies that are carried out for personal gain. Currently, there is no precise methodology for identifying intentional bankruptcies, so the process depends on the skills and qualifications of the investigator. The purpose of this research is to provide a method for identifying intentional bankruptcies after examining fraud in the financial statements and their impact on the probability of bankruptcy. The paper identifies the main methods of fraud bankruptcy detection, distinguishing forensic science as the main method for doing so. The paper conducts research, which was modeled on research conducted by other authors to test the effectiveness of bankruptcy prediction methods and the effectiveness of financial indicators in detecting fraud. The research evaluated the trends of the Altman Z'-Score model and the application of binary logistic regression analysis to a sample of intentional and unintentional bankruptcies. The regression analysis provided a model for determining intentional bankruptcies and identified the following indicators: net profit/assets, liabilities/assets, liabilities/equity, and Altman Z'-Score. An independent t-test was also performed to show the differences in the means of financial ratios between intentional and unintentional bankruptcies. The results of the T-test indicated that it is important to calculate and evaluate the following additional indicators: current assets/assets, receivables/income. The results of the research may help to identify the likelihood of intentional corporate bankruptcies and thus facilitate the sophisticated methods used to date.
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Wood, Roderick J. "Direct Payment Clauses and the Fraud Upon the Bankruptcy Law Principle: Re Horizon Earthworks Ltd. (Bankrupt)." Alberta Law Review 52, no. 1 (November 4, 2014): 171. http://dx.doi.org/10.29173/alr19.
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Kazakova, Natalia, and Anna Sivkova. "FINANCIAL SECURITY AND ECONOMIC DEVELOPMENT: METHODS OF ANALYSIS AND RISK MANAGEMENT (THE CASE OF RUSSIA)." EUrASEANs: journal on global socio-economic dynamics, no. 2(9) (March 30, 2018): 68–80. http://dx.doi.org/10.35678/2539-5645.2(9).2018.68-80.
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Under the conditions of today’s megarisks, the general level of instability of the world economy is only rising, the number of unprofitable organizations with overdue debts increases, and this creates additional threats to financial security of the states. In this regard, the presented research results have scientific and applied importance for risk management of financial security of economic entities on the basis of the suggested control and analytical concept. The suggested concept includes; monitoring, diagnostics, prevention of crisis situations, including bankruptcy, corporate fraud or financial irregularities in the economy. Accounting for the specifics of economic entities in the analysis, diagnostics and control of their activities is aimed at developing an effective management system for corporate fraud and bankruptcy prevention. The conceptual principles of information and analytical support, improved methods used in analyzing, evaluating and monitoring financial security contribute to the development of this methodology for economic analysis and control, ensuring their effectiveness and transparency. The comprehensive toolkit offered here for diagnosing financial security allows identifying the areas of increased bankruptcy risks, fraudulent actions or ineffective business management; unify the control process, thereby reducing labor intensity and improving the quality of control measures.
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Will, Susan, Henry N. Pontell, and Richard Cheung. "Risky Business Revisited: White-Collar Crime and the Orange County Bankruptcy." Crime & Delinquency 44, no. 3 (July 1998): 367–87. http://dx.doi.org/10.1177/0011128798044003002.
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Orange County's bankruptcy is the largest governmental bankruptcy in U.S. history. Initial reports blamed the county's financial difficulties on the county treasurer's gambling with taxpayer dollars in the high-risk derivative market. This article forwards the argument that it was not simply “risky business” that caused the bankruptcy; rather, fraud and other forms of white-collar crime played a significant role in the $2 billion debacle. Using concepts and theories from the literature on white-collar crime and drawing comparisons with other financial scandals, most notably the savings and loan crisis, the authors argue that the financial downfall of Orange County was due to a “criminogenic environment” that allowed for concerted ignorance among officials who were motivated by a fear of falling from their positions of power.
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Astrakhantseva, Irina, and Roman Astrakhantsev. "Fraud transactions revealing as phase of financial analysis in Forensic Economic Examination." SHS Web of Conferences 94 (2021): 03011. http://dx.doi.org/10.1051/shsconf/20219403011.
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The scientific research study is about financial methodology analysis improving in the framework of forensic economic examination. The objective bankruptcy date is one of the issues within the forensic examination. The authors propose to supplement the classical financial analysis with a special section, which analyzes transactions for compliance with market conditions, identifies schematic and fictitious transactions, and also determines the degree of their impact on the occurrence of property insufficiency and signs of bankruptcy. The author's classification of possible schematic transactions, as well as methods for establishing the fact of compliance with the market situation are proposed. As the criterion for the maximum permissible deviations of transaction values from market values, it is proposed to use a value in an amount not exceeding the change in values by more than two times. The technical assets identified as a result of fictitious transactions are proposed to be deducted from the market value of assets when calculating the net assets of the organization, which will allow the most correct determination of the objective bankruptcy date.
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Galinskaya, A. E. "The Use of Special Knowledge by Defense in Economic Crime Investigations." Theory and Practice of Forensic Science, no. 4(44) (December 30, 2016): 46–53. http://dx.doi.org/10.30764/1819-2785-2016-4-46-53.
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The paper examines actions taken by defense when financial and economic assessment is warranted in the course of economic crime investigation; the order of commission of financial and economic assessment by the investigator or court in order to establish a fact of bankruptcy fraud; capacity of the defense to contest expert testimony; errors committed by forensic economists when conducting financial and economic assessment in the criminal investigation of bankruptcy fraud; ways to prevent forensic expert mistakes; the wording of conclusions in the expert witness report; problems associated with the use of uncertified methodologies of forensic assessment; attitudes demonstrated by various courts within the Russian justice system towards the use of special knowledge by defense economic crime investigations, including the position of the European Court of Human Rights (ECtHR) in light of the European Convention; procedural and non-procedural documentation used by the defense in economic crime investigations.
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Kwak, Wikil, Yong Shi, and Gang Kou. "Predicting Bankruptcy After The Sarbanes-Oxley Act Using The Most Current Data Mining Approaches." Journal of Business & Economics Research (JBER) 10, no. 4 (March 23, 2012): 233. http://dx.doi.org/10.19030/jber.v10i4.6899.
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Our study proposes several current data mining methods to predict bankruptcy after the Sarbanes-Oxley Act (2002) using 2007-2008 U.S. data. The Sarbanes-Oxley Act (SOX) of 2002 was introduced to improve the quality of financial reporting and minimize corporate fraud in the U.S. Because of this SOX implementation, a companys financial statements are assumed to provide higher quality financial information for investors and other stakeholders. The results of our data mining approaches in our bankruptcy prediction study show that Bayesian Net method performs the best (85% overall prediction rate with 94% in AUC), followed by J48 (85% with 82% AUC), Decision Table (83.52%), and Decision Tree (82%) methods using financial and other data from the 10-K report and Compustat. These results are better than previous bankruptcy prediction studies before the SOX implementation using most current data mining approaches.
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Knežević, Snežana, Marko Špiler, Marko Milašinović, Aleksandra Mitrović, Stefan Milojević, and Jovan Travica. "Using Beneish M-Score and Altman Z-Score models to detect financial fraud and company failure." Tekstilna industrija 69, no. 4 (2021): 20–29. http://dx.doi.org/10.5937/tekstind2104020k.
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Bankruptcy is a risk that any company can face, regardless of its size. The importance of predicting a company's bankruptcy for years before its development is enormous, and it is important for financial sustainability. Financial reporting is an important platform for making financial decisions of investors and creditors. In recent years, the frequency of false financial reporting by firms has increased and there are concerns about investors' confidence in capital market. Academics and industry experts adopt a variety of risk management techniques to detect fraudulent financial reporting. A case study was applied in this paper. Based on publicly available financial data (disclosed financial statements) of a domestic textile company for the period 2017-2020, whose shares are listed on the stock exchange, a survey was conducted based on the application of Altman's Z-Score model and Beneish M-Score model. Financial distress is an important criterion to monitor when assessing the likelihood of fraud reporting. When a company is operating poorly, there is a greater motivation to engage in fraudulent financial reporting. The findings show that the results differ according to the applied method in terms of identifying the possibility of bankruptcy and the possibility of fraud in the financial statements of the observed company. The results of the study can be important to investors, auditors, regulators, bankers, tax and other government bodies.
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Zeigler, Luther. "The Fraud Exception to Discharge in Bankruptcy: A Reappraisal." Stanford Law Review 38, no. 3 (February 1986): 891. http://dx.doi.org/10.2307/1228567.
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Widiantari, Ni Wayan, and I. Wayan Sudiana. "Pengaruh Bystander Effect, Efektivitas Pengendalian Internal dan Tekanan Finansial Terhadap Kecenderungan Kecurangan Akuntansi Pada Lembaga Perkreditan Desa." Hita Akuntansi dan Keuangan 4, no. 1 (January 12, 2023): 77–88. http://dx.doi.org/10.32795/hak.v4i1.3583.
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An act of violating the law that is carried out intentionally to gain personal gain and harm many people is often referred to as a tendency to fraud. The tendency of fraud that continues to be allowed will cause losses for the company to bankruptcy. With this in mind, this study was conducted to analyze the relationship between the bystander effect, internal control effectiveness, and financial pressure on the propensity for accounting fraud. Employees at LPD LPD in Penebel District were used as a population with a research sample of 163 respondents. This study uses multiple linear regression analysis techniques which then produce data showing that the bystander effect and increasing financial pressure will make the tendency of fraud to be higher. The effectiveness of good internal control will reduce the level of tendency to fraud.
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Eckert, Christian, Nadine Gatzert, and Alexander Pisula. "Spillover effects in the European financial services industry from internal fraud events." Journal of Risk Finance 20, no. 3 (August 12, 2019): 249–66. http://dx.doi.org/10.1108/jrf-07-2018-0117.
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Purpose Previous research observed that large internal fraud events in the general financial services industry imply negative spillover effects, whereas internal fraud in investment banks can imply significantly positive effects for other banks. This paper aims to shed further light on this contradictory result. Design/methodology/approach For this purpose, the authors compare the spillover effects of the three largest cases of rogue trader events in investment banks (Company 1, 1995; Company 2, 2008; Company 3, 2011) on the largest competing non-announcing banks and insurance companies in Europe based on an event study. Findings The results show that while the respective announcing firm suffered significant market value losses that even led to bankruptcy in case of Company 1, spillover effects on other banks and insurers were twofold. In particular, in case of Company 2 and Company 3, spillover effects on other financial firms were significantly positive depending on the event window, indicating a dominating competitive effect, whereas the Company 1 event with its resulting bankruptcy led to significantly negative spillover effects and thus contagion. Originality/value The results offer a first indication that the severity of the event in terms of its consequences for the announcing firm is crucial, as internal fraud events have the potential to significantly worsen the market values of other financial services firms, which is in contrast to the typically observed positive effects.
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Grove, Hugh, and Maclyn Clouse. "The role of risk management in corporate governance: Guidelines and applications." Risk Governance and Control: Financial Markets and Institutions 7, no. 4-1 (2017): 92–99. http://dx.doi.org/10.22495/rgc7i4c1art1.
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Risk management should be a key concern of board members to enhance corporate governance in any organization. Eleven key numbers, ratios, and models were advocated in this paper for risk management analyses, including an analysis of their variability with graphs. They are applied to Kaisa, a Chinese property developer, located in Shenzhen but incorporated with limited liability in the Cayman Islands. The importance of such risk management analyses was demonstrated in this paper as Kaisa destroyed $12.9 billion in four different types of investments: $2.2 billion in stock market value, $0.3 billion in private equity investments, $2.5 billion in global bonds, and $7.9 billion in Chinese short-term and long-term debt. Thus, the use of key financial statement metrics, including fraud models and ratios, has been shown here to provide enhanced corporate governance with risk management guidelines and applications. Boards of Directors need to pay attention to key financial statement metrics, which have been shown to work over and over again, as with Kaisa in this paper. These key metrics usually start with operating cash flows which then may indicate problems with debt service (the fixed charge coverage ratio) which then may lead to bankruptcy predictions by the Altman bankruptcy model. To cover up such survival problems, companies often resort to earnings management and even fraudulent financial reporting which are typically red flagged by the quality of earnings, the quality of revenues, the new fraud model and the old fraud model.
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Wan Fauzi, Wan Noor Asmuni, Marziana Madah Marzuki, Muhaniza Zainal Ariffin, and Nor Balkish Zakaria. "Fraud Diamond Factors, Risk Management Practices and the Likelihood of Fraud among Financially Distressed Companies Listed on the Malaysian Stock Exchange." Asia-Pacific Management Accounting Journal 17, no. 2 (August 31, 2022): 131–59. http://dx.doi.org/10.24191/apmaj.v17i2-05.
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Firms have tendencies to manipulate their financial statements when it is at risk of bankruptcy due to financial distress. Based on the Fraud Diamond Theory, there are four factors that motivate firms to perpetrate fraud, namely pressure, opportunity, rationalization and capability. Therefore, this study investigated the effect of these fraud diamond factors on the likelihood of fraudulent financial reporting among financially distressed firms in Malaysia. In addition, this study investigated whether the new amendment of code of corporate governance on risk management practices can mitigate the effect of these four factors on the likelihood of fraudulent financial reporting. Based on a sample of 53 financially distressed firms from 2014 until 2019, this study found that two fraud diamond factors which are pressure and capability significantly influenced firms’ financial distress and thus influenced the likelihood of fraud. The study found that risk management can reduce pressure and thus reduce the likelihood of fraud of financially distressed firms. Meanwhile, distressed firms change directors to replace with competent ones. Nevertheless, the study found that distressed firms may increase their risk disclosures to cover up their distress by changing directors. This study investigated the prevalence of fraud among distressed firms. Furthermore, it extends the literature of risk management among distressed firms. Keywords: fraud, fraud diamond, risk management, financial distress
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Györy, Csaba. "The institutional context of financial fraud in a post-transition economy: The Quaestor scandal." European Journal of Criminology 17, no. 1 (September 12, 2019): 31–49. http://dx.doi.org/10.1177/1477370819874436.
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The article will analyse the greatest Hungarian securities fraud to date: the Quaestor scandal. Quaestor was a holding of several companies, including one of Hungary’s biggest investment adviser and brokerage firms, which went into bankruptcy in early 2015. Later investigations uncovered a massive fraud with an estimated loss close to €500 million to investors, mainly caused by affiliated companies overselling their bonds many times over the limit set by the securities regulator. Using theoretical approaches from comparative political economy, economic sociology and organizational theory, the article will analyse how the institutional context of economic action on the financial markets was conductive to the fraud. Two major factors in particular will be emphasized: the political economy of finance, especially the underdeveloped nature of financial markets and the lack of a retail investor class; and the relative scarcity of capital.
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Ng, Alexander W., Lasse Mertins, and Charles L. Martin. "Winstar Communications: corporate fraud and auditing procedures." CASE Journal 11, no. 2 (April 2, 2015): 147–53. http://dx.doi.org/10.1108/tcj-07-2014-0053.
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Synopsis Winstar Communications was a successful and fast growing telecommunication company in the 1990s and early 2000s. However, in the early 2000s, the company started to struggle financially. In 2000, Grant Thornton audited Winstar, issuing an unqualified opinion. After Winstar went into bankruptcy in 2002, investors started to question the quality of the audit. This teaching case is based on the Gould v. Grant Thornton case that was tried in the United States Court of Appeals in 2011/2012. It provides accounting students with an opportunity to learn about auditing procedures and the consequences when auditing procedures are not correctly followed. Research methodology Teaching case study. Relevant courses and levels This case study is suitable for introductory undergraduate auditing, advanced undergraduate auditing and master level auditing courses.
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Blythe, Stephen E. "The In Pari Delicto Defense for Auditors in Professional Negligence Cases: Imputation of Managers’ Unlawful Acts to the Client Firm." Accounting, Economics and Law - A Convivium 5, no. 2 (July 1, 2015): 193–226. http://dx.doi.org/10.1515/ael-2013-0057.
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AbstractThe Enron scandal, the Sarbanes-Oxley Act and the 2008 financial crisis have resulted in new laws and regulations regarding auditor liability and an evolution of some of the old ones. One of the older laws is the in pari delicto defense: in a lawsuit brought by a corporation alleging that its auditor was negligent in failing to detect a manager’s fraud, the auditor may be able to use that defense if the manager’s fraud is imputable to the company. Since a bankruptcy trustee or a receiver steps into the shoes of the bankrupt company it represents, a similar defense (the Wagoner Rule) may also be applicable if a trustee or a receiver files a negligence lawsuit against the company’s auditor. However, in pari delicto is inapplicable when: (1) the wrongful acts of the manager are so adverse to the corporate client that the manager is deemed to have totally abandoned the corporation for its, or a third party’s, sole benefit (unless the manager is also the sole shareholder, or the company has incurred a short-term benefit because of the fraud); (2) the corporate client had at least one innocent manager or shareholder who could have prevented or stopped the fraud if he had known about it; (3) the auditor does not deal with the corporate client in good faith and engages in unlawful conduct; or (4) the plaintiffs are totally innocent shareholders (but in this case, the in pari delicto defense is still applicable with respect to culpable shareholders). The State of New York has been on the cutting edge in the evolution of the in pari delicto defense, and this defense is strongest there. Other states recognizing the defense include New Jersey, Pennsylvania, and (in dicta) Delaware (only if the company has engaged in actual wrongdoing). Finally, these are examples of recent evolution of in pari delicto: (a) the Sarbanes-Oxley Act’s prohibition of management from interfering with or deceiving the auditor; such statutory violations of management could be used by the auditor at trial in proving the applicability of the in pari delicto defense and (b) the new constraints on off-balance sheet leases, expected to be released shortly by the Financial Accounting Standards Board, may decrease management’s ability to deceive the auditor in the first place.
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Elder, Randal J., Diane J. Janvrin, and Paul Caster. "Peregrine—Twenty Years of Fraudulent Cash Balances." Issues in Accounting Education 29, no. 2 (December 1, 2013): 337–48. http://dx.doi.org/10.2308/iace-50690.
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ABSTRACT In July 2012, Peregrine Financial Group filed for bankruptcy following the discovery that $215 million in customer balances had been embezzled. Investigation revealed that its Chief Executive Officer, Russell Wasendorf, Sr., fooled auditors and regulators for 20 years by preparing fictitious bank statements and cash balance confirmations to hide the theft of cash. The fraud was uncovered when Peregrine's regulator, the National Futures Association (NFA), demanded that Peregrine participate in an electronic confirmation process for verification of customer accounts. This case discusses how the fraud was allowed to go undetected for 20 years, the importance of auditing cash, and how new electronic confirmation technology improves the ability to authenticate confirmation responses. The case is suitable for use in both auditing and accounting information system courses.
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Widhoyoko, Samuel Anindyo, Deoga Payudha, Jeannada Natasha, and Jerremy Immanuel. "THE ROLES OF FORENSIC ACCOUNTANTS IN PREVENTION AND DETECTION OF MONEY LAUNDERING IN PHOENIX ACTIVITIES." INDONESIAN JOURNAL OF ACCOUNTING AND GOVERNANCE 1, no. 1 (December 10, 2019): 83–111. http://dx.doi.org/10.36766/ijag.v1i1.5.
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The process of company liquidation is always full of money laundering allegations and vulnerable to fraud. This fraudulent scheme is referred to as phoenix activity. The main purpose of phoenix activity is to avoid liability and expenses, which detriments the stakeholders. This research explains the importance of the role of forensic accountants prior, during, and after bankruptcy. The methodology used in this research is literature review examining the problems through various researches and frameworks. The literature review discusses three aspects related to fraudulent bankruptcy scheme i.e. motivation, the scheme processes and litigation processes. The research concludes that the presence of forensic accountants is important in the insolvency prevention and detection, in their roles as(1) independent and hired experts; (2) professional legal assistance providers of Anti-Money Laundering (AML) and asset manager; (3) business valuation experts; (4) private investigators; and (5) surveillance body for anti-money laundering purposes.
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Dobrovlynina, Olga, Ksenia Kondratieva, and Ksenia Patyrbaeva. "Types of Bankruptcy Fraud in the Russian Federation: Issues of Legal Regulation." Law. Journal of the Higher School of Economics, no. 3 (September 10, 2017): 34–49. http://dx.doi.org/10.17323/2072-8166.2017.2.34.49.
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Box, Marcus, Karl Gratzer, and Xiang Lin. "The Asymmetric Effect of Bankruptcy Fraud in Sweden: A Long-Term Perspective." Journal of Quantitative Criminology 35, no. 2 (April 21, 2018): 287–312. http://dx.doi.org/10.1007/s10940-018-9380-2.
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Ulandari, Ni Kadek Sri Ayu, and Ni Ketut Muliati. "Pengaruh Efektivitas Pengendalian Internal, Kesesuaian Kompensasi, dan Moralitas Individu Terhadap Kecenderungan Kecurangan (Fraud) pada Lembaga Perkreditan Desa di Kecamatan Kerambitan." Hita Akuntansi dan Keuangan 3, no. 4 (October 31, 2022): 69–78. http://dx.doi.org/10.32795/hak.v3i4.3226.
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F
Fraud is a type of purposeful behavior where one individual harmed another party. The company will go bankrupt if fraud is permitted to continue. Understanding the negative effects is crucial for businesses to prevent various types of fraud that could happen within the organization. This study was carried out to examine the variables that affect the likelihood of fraud, including the effectiveness of internal controls, the appropriateness of compensation, and individual morality. 98 respondents from the Village Credit Institution in Kerambitan District were included in the research samples. Multiple linear regression analysis approaches will be used to examine research data in the future. The findings of this study suggest that internal control efficiency, appropriateness of remuneration
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Lamoza Ressidnarry, Lamoza Ressidnarry, and Julianti Sjarief. "ANALISIS PENGARUH KEBANGKRUTAN, AUDITOR SPESIALISASI INDUSTRI DAN CORPORATE GOVERNANCE TERHADAP FRAUDULENT FINANCIAL REPORTING." BALANCE: Jurnal Akuntansi, Auditing dan Keuangan 18, no. 1 (July 8, 2021): 27–51. http://dx.doi.org/10.25170/balance.v18i1.2297.
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Fraudulent financial reporting often occurs in company management. Management who has a cooperation contract with the principal, there are often differences in interests between management and shareholders. The difference in interests makes it possible for management to commit fraud. Therefore, the factors that cause fraudulent financial reporting need to be known.
This study aims to examine the effect of bankruptcy, auditors specializing in industry and corporate governance (consisting of managerial ownership, number of audit committee meetings and composition of independent commissioners). The population of this research is manufacturing companies in the consumer goods industry which are listed on the Indonesia Stock Exchange 2015-2018. Based on the purposive sampling method in the sample selection process, 38 companies were obtained as samples. Hypothesis testing is carried out by logistic regression analysis using the SPSS version 21 program.
The results of this study are bankruptcy, managerial ownership and the composition of independent commissioners have an effect on fraudulent financial reporting. Meanwhile, auditors specializing in industry and the number of audit committee meetings have no effect on fraudulent financial reporting.
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Syarif Hidayat. "Bangkrut dalam al-Quran; Studi Tematis Pemahaman Kata Khasara dalam Al-Qur’an." SALIHA: Jurnal Pendidikan & Agama Islam 5, no. 2 (July 30, 2022): 233–49. http://dx.doi.org/10.54396/saliha.v5i2.366.
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This paper examines how Bankruptcy in the Qur'an. Understanding is obtained through the meaning of the word Khasara in the Qur'an. This study uses library research, and uses an approach to the interpretation of the Qur'an in terms of thematic interpretation. The method used in the discussion of this paper is qualitative, this method is used to find the desired meaning of the word Khahara, the existing data is processed for further interpretation into concepts that can support the objectives and objects of discussion. After searching the meaning of the word khashara, an understanding is obtained that the bankruptcy described in the Qur'an includes several circumstances; First, do not follow the rules, do things that can break the order, tend to be arbitrary, Second, follow things that are generally inappropriate or should not be followed, Third, people who betray or violate the agreement, Fourth, orders us to fair or fair and do not commit fraud, Fifth, focus on one thing that is not in principle and neglect other things that are more important
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Grove, Hugh, and Maclyn Clouse. "A financial risk and fraud model comparison of Bear Stearns and Sehman Brothers: was the right or wrong firm bailed out?" Corporate Ownership and Control 11, no. 1 (2013): 68–87. http://dx.doi.org/10.22495/cocv11i1conf1p7.
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In March 2008, the US government bailed out a failing Bear Stearns by arranging a sale to JP Morgan Chase, with US government guarantees for many Bear Stearns’ toxic assets that came with the acquisition. In September 2008, the US government failed to bail out a failing Lehman Brothers, which then went into bankruptcy. Soon thereafter, the US government established a bailout program for many other failing financial institutions. This paper uses financial risk and fraud models to attempt to answer the question as to why Bear Stearns was bailed out, but Lehman Brothers was not. Based on the analysis, was the right or wrong firm bailed out? In summary, these financial risk and fraud models show potential for developing effective risk management monitoring and stronger corporate governance in order to enhance relationships between management, financial reporting, and the stability of the economic system in crisis and post-crisis conditions.
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Haryanti, Rizka. "Analisis Kecurangan Laporan Keuangan PT Asuransi Jiwasraya dengan Analisis Fraud Pentagon." Sanskara Akuntansi dan Keuangan 1, no. 02 (January 31, 2023): 92–99. http://dx.doi.org/10.58812/sak.v1i02.70.
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The risk of fraud in the financial statements is a risk that will always exist as a result of disclosing misstatements borne by the Company's management. PT Asuransi Jiwasraya went bankrupt and failed to pay. The purpose of this study is to identify fraudulent financial statements from Jiwasraya using the pentagon fraud theory. The pentagon fraud theory is a theory developed from Cressey's 1953 fraud triangle theory. The five elements of risk are: pressure; chance; rationalization; Need; arrogance. The method used in this research is a quantitative descriptive method. PT Asuransi Jiwasraya (Persero) lost investment funds for the JS Saving Plan product due to being unable to pay interest and customer investment funds. PT. Asuransi Jiwasraya officially closed on May 31 2021 and was transferred to PT Asuransi Jiwa IFG (IFG Life).
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Liodorova, Julija, and Irina Voronova. "FINANCIAL RATIOS FOR DETECTION OF COMPANY’S INSOLVENCY AND BANKRUPTCY FRAUD: SIMILARITIES AND DIFFERENCES." Sociālo Zinātņu Vēstnesis=Social Sciences Bulletin 30, no. 1 (October 28, 2020): 7–29. http://dx.doi.org/10.9770/szv.2020.1(1).
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Box, Marcus, Karl Gratzer, and Xiang Lin. "Destructive entrepreneurship in the small business sector: bankruptcy fraud in Sweden, 1830–2010." Small Business Economics 54, no. 2 (April 18, 2018): 437–57. http://dx.doi.org/10.1007/s11187-018-0043-3.
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ÖZARİ, Çiğdem. "ESTIMATION OF BANKRUPTCY PROBABILITIES BY USING FUZZY LOGIC AND MERTON MODEL: AN APPLICATION ON USA COMPANIES." Business & Management Studies: An International Journal 5, no. 4 (January 7, 2018): 211–34. http://dx.doi.org/10.15295/bmij.v5i4.168.
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In this study, we have worked on developing a brand-new index called Fuzzy-bankruptcy index. The aim of this index is to find out the default probability of any company X, independent from the sector it belongs. Fuzzy logic is used to state the financial ratiointerruption change related with time and inside different sectors, the new index is created to eliminate the number of the relativity of financial ratios. The four input variables inside the five main input variables used for the fuzzy process, are chosen from both factor analysis and clustering and the last input variable calculated from Merton Model. As we analyze in the past cases of the default history of companies, one could explore different reasons such as managerial arrogance, fraud and managerial mistakes, that are responsible for the very poor endings of prestigious companies like Enron, K-Mart. Because of these kind of situations, we try to design a model which one could be able to get a better view of a company’s financial position, and it couldbe prevent credit loan companies from investing in the wrong company and possibly from losing all investments using our Fuzzy-bankruptcy index.
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Bagus Amlayasa, Anak Agung, and Ni Putu Riasning. "The Role of Emotional Intelligence in Moderating the Relationship of Self Efficacy and Professional Skepticism towards the Auditor's Responsibility in Detecting Fraud." International Journal of Scientific and Management Research 05, no. 11 (2022): 01–04. http://dx.doi.org/10.37502/ijsmr.2022.51101.
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The issue of fraud continues to plague organizations and stakeholders around the world because of its tremendous impact on business decisions. Starting from a financial scandal that resulted in the bankruptcy and collapse of a number of giant companies, such as Enron and WorldCom. This condition demands the attention of the auditor profession to actively find illegal acts in the company. Although the auditing standard (SA) No. 240 has determined that the external auditor is responsible for regarding fraud in an audit of financial statements, but in fact not all auditors can fulfill this responsibility. This study aims to examine the role of locus of control, task complexity, turnover intention and professional commitment to the acceptance of dysfunctional audit behavior. The population of this study is partner auditors, managers, supervisors, seniors and juniors who work in all KAP Denpasar City. The sample method used is non-probability with the snowball sampling method, obtained 81 respondents who are willing to fill out the questionnaire. The data analysis technique used to test the hypothesis is to use PLS-SEM analysis, with the help of SmartPLS 3.0 Software. The results show that the auditor's responsibility in detecting fraud directly can be increased by self-confidence and emotional intelligence. Other results show that although professional skepticism directly has not been able to increase the auditor's responsibility in detecting fraud, it will depend on emotional intelligence. It can be concluded that emotional intelligence is a pure moderator of the relationship between professional skepticism and the auditor's responsibility in detecting fraud.
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Nur Apandi, R. Nelly, and Yudha Pradista. "PENGGUNAAN AKUNTANSI FORENSIK DALAM PENYELESAIAN KASUS KEPAILITAN." Jurnal Riset Akuntansi dan Keuangan 2, no. 2 (April 27, 2014): 314. http://dx.doi.org/10.17509/jrak.v2i2.6587.
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This research aim to know how bankrupt process and applying of forensic accountancy in bankrupt. Besides to know constraints any kind of faced in applying forensic accountancy in finishing case of bankrupt. This study uses qualitative methods. Informant this research consists of curators, civil servant, forensic accountants and Auditors.Result of this research indicate that forensic accountancy have role in assisting to finish case of bankrupt. This matter can be seen from some process or step is solving of case of done bankrupt in justice of commercial needing forensic accountancy. The first, checking off receivable and liability at litigation to prove that debtor really is having of debt to all creditor so that ascertain justice in deciding bankrupt an company. Second, enumeration of bankruptasset to data exist in document, financial statement, and debtor boldness with direct inspection in field. Third, checking off receivable and liability at the time of creditor meeting to know really conducted receivable and liability amount in agreement between creditor and debtor. Fourth, at the time of division of bankrupt asset to ascertain sequence of is division of between separatist creditor, preferential, and congruence seen the existence of guarantee or do not at the time of agreement of receivable and liability. Fifth, detecting the existence of indication of fraud that happened at case of bankrupt.
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Yonani, Yonani, Warmiyana Zairi Absi, and Martini Martini. "Principle of Proportionality in Corporate Crimes Based on Actions Against the Law." International Journal of Social Science Research and Review 5, no. 8 (August 15, 2022): 38–42. http://dx.doi.org/10.47814/ijssrr.v5i8.530.
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Context of corporate crime, the principle of proportionality places position that in accordance with provisions in Article 1365 of Civil Code, an act against law in civil law must contain following elements: 1. The existence of an act; 2. The act is against law; 3. There is an error on part of perpetrator; 4. There is a loss for victim; and 5.There is a casual relationship between act and loss. By looking at perpetrator and loss to victim of corporate crime, based on value of justice, it must be seen from side of default and unlawful acts which are considered as fraud and money laundering in context of civil and bankruptcy and may be punished.
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Ouenniche, Jamal, Oscar Javier Uvalle Perez, and Aziz Ettouhami. "A new EDAS-based in-sample-out-of-sample classifier for risk-class prediction." Management Decision 57, no. 2 (February 11, 2019): 314–23. http://dx.doi.org/10.1108/md-04-2018-0397.
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PurposeNowadays, the field of data analytics is witnessing an unprecedented interest from a variety of stakeholders. The purpose of this paper is to contribute to the subfield of predictive analytics by proposing a new non-parametric classifier.Design/methodology/approachThe proposed new non-parametric classifier performs both in-sample and out-of-sample predictions, where in-sample predictions are devised with a new Evaluation Based on Distance from Average Solution (EDAS)-based classifier, and out-of-sample predictions are devised with a CBR-based classifier trained on the class predictions provided by the proposed EDAS-based classifier.FindingsThe performance of the proposed new non-parametric classification framework is tested on a data set of UK firms in predicting bankruptcy. Numerical results demonstrate an outstanding predictive performance, which is robust to the implementation decisions’ choices.Practical implicationsThe exceptional predictive performance of the proposed new non-parametric classifier makes it a real contender in actual applications in areas such as finance and investment, internet security, fraud and medical diagnosis, where the accuracy of the risk-class predictions has serious consequences for the relevant stakeholders.Originality/valueOver and above the design elements of the new integrated in-sample-out-of-sample classification framework and its non-parametric nature, it delivers an outstanding predictive performance for a bankruptcy prediction application.