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Kassem, Rasha
(2022).
DOI: https://doi.org/10.1108/cg-08-2021-0279
Abstract
Purpose
This paper highlights the role and impact of corporate governance in combating fraud by drawing on insights from the literature, identifies gaps in the literature, and suggests new directions for future research.
Design/methodology/approach
The paper is based on a comprehensive general literature review using multiple search engines and databases.
Findings
This paper finds that effective corporate governance can help reduce fraud risk, prevent fraud, and detect fraud, particularly corporate fraud, insider fraud, and asset diversion. Some companies employ corporate governance mechanisms to bolster their reputation following fraud detection. Ineffective corporate governance increases fraud risk, provides the opportunity for perpetrating fraud and reduces the likelihood of fraud detection. The paper sheds light on several governance mechanisms that could help in mitigating fraud risk, as reported in the literature. The paper categorises these governance mechanisms into four broad governance aspects, including (a) board leadership and the role of ethics; (b) board characteristics, composition, and structure, (c) ownership structure, and (d) accountability. The paper proposes a guide summarising these broad fundamental governance aspects, including specific anti-fraud controls and examples of how organisations could enhance ethical cultures and the tone at the top.
Originality/value
This is the first paper to elucidate the role of corporate governance in countering fraud and develop guidance in this area. The proposed guidance could be helpful to businesses leaders, policymakers, researchers, and academics alike.
CORE (COnnecting REpositories)
CORE (COnnecting REpositories)
