Factors Affecting Accounting Fraud in Malaysian SMEs

Sudhashini Nair, Sashvin Ramani, Kayalvily Tabianan, Ilangovan Perumal, Neeta Jayabalan


Accounting fraud is a serious phenomenon affecting businesses globally due to the deliberate manipulation and alteration of financial records. This may lead to massive financial loss to the companies, destroying the company’s image and the employees’ lives. Furthermore, the effect will devastate SMEs as they may fail to sustain their businesses due to the outcomes of fraudulent behavior. This study takes a closer look at Malaysian SMEs with the aim of examining whether relationships may exist between pressure, opportunity, rationalization, ethical values and accounting fraud in Malaysian SMEs. This study is conducted with the goal to contribute to the existing knowledge on accounting fraud in SMEs, which can facilitate the creation of policies and standards for curbing or minimizing accounting fraud. A deductive approach was employed using a quantitative method. Data were collected from 155 managers from SMEs in the state of Selangor, Malaysia using online questionnaires. Data analysis was performed using the Statistical Package for Social Sciences (SPSS) software. The application of the SPSS software was necessary in testing the reliability of the data, linearity, correlation, and multiple regression tests, and examining the relationships between the independent and dependent variables. The research results revealed that only pressure and opportunity had a significant positive relationship with accounting fraud in Malaysian SMEs. The scientific novelty of the study was the test results on the rationalization and ethical values that refute the results of past studies. This study provides implications for the research findings.


Keywords: accounting fraud, pressure, opportunity, rationalization, ethical values.


DOI: https://doi.org/10.55463/hkjss.issn.1021-3619.60.26


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