Exploring External Auditors' Perceptions of the Motivations behind Management Fraud in Egypt – A Mixed-Method Approach

Kassem, Rasha (2018). Exploring External Auditors' Perceptions of the Motivations behind Management Fraud in Egypt – A Mixed-Method Approach. Managerial Auditing Journal, 33(1) pp. 16–34.

DOI: https://doi.org/10.1108/MAJ-11-2016-1470

Abstract

Purpose – This paper aims to explore the perceptions of external auditors’ on the motivations behind management fraud, which could increase the likelihood of detecting financial reporting fraud.

Design methodology/approach – Mixed research methods, namely, an online questionnaire and semi-structured interviews, were used for data collection from external auditors in Egypt.

Findings – The findings revealed that the desire to get remuneration or bonuses and the need to secure financing are the most common motivations behind management fraud in Egypt. The current study also found other motivations behind management fraud that could be more specific to the Egyptian context.

Research limitations/implications – Gaining access to small- and medium-size audit firms, in particular, was very difficult. This study did not use factor analysis to determine whether differences exist among the motives/factors, which should be the focus of future studies.

Practical implications – This study was the first to provide empirical evidence on the motivations behind management fraud in the context of a developing nation such as Egypt. The findings of this study could be important for Egyptian regulators and external auditors who wish to reduce fraud risks in their own country. The findings could also help external auditors across the globe in recognising the signs that can trigger management motivations to engage in financial reporting fraud, which in turn could increase the likelihood of detecting financial reporting fraud.

Originality/value – This study was the first to provide empirical evidence on the motivations behind management fraud in the context of a developing nation such as Egypt. The findings of this study could be important for Egyptian regulators and external auditors who wish to reduce fraud risks in their own country. The findings could also help external auditors across the globe in recognising the signs that can trigger management motivations to engage in financial reporting fraud, which in turn could increase the likelihood of detecting financial reporting fraud.

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About

• Item ORO ID
• 79506
• Item Type
• Journal Item
• Keywords
• Egypt; external auditors; auditor’s liability; financial reporting fraud detection; fraud risk assessment; management motivations
• Academic Unit or School
• Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
  Faculty of Business and Law (FBL) > Business
  Faculty of Business and Law (FBL)
• Depositing User
• Rasha Kassem