Investigating Financial Reporting Fraud Intentions in Malaysian Small and Medium Enterprises (SMEs): A Proposed Framework

  • Dr Yunita Awang Universiti Teknologi MARA
  • Azuraidah Taib Universiti Teknologi MARA
  • Shazalina Mohamed Shuhidan Universiti Teknologi MARA
  • Norfadzilah Rashid Universiti Sultan Zainal Abidin, Gong Badak Campus
Keywords: Conceptual model, Intention for fraud, Fraud in financial reporting, Financial statement fraud, Small and Medium Enterprises

Abstract

Fraud is widely regarded as the most important corporate problem in today's economic environment, and it is only becoming worse, especially in a tight-budget situation. Fraud in financial reporting refers to the intentional falsification of financial facts to mislead financial statement users. It undermines investors' trust in published financial statements. This study aims to identify the factors influencing intention for fraud in financial reporting in Malaysian Small and Medium Enterprises (SMEs). Hence, this study proposes a conceptual framework for financial reporting fraud intentions in Malaysian SMEs using the Theory of Planned Behaviour (TPB) as an underlying theory and supplemented by Rest's four-component model. The proposed framework comprises four main variables – attitude, subjective norm, perceived behavioral control and ethical judgment, while gender is treated as a control variable. This study enhances the current body of knowledge on unethical intention literature. It expands the applications of the TPB model in predicting intention for financial reporting fraud in the setting of small businesses. Additionally, the findings will contribute as a preventive safeguard against fraud in financial reporting

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Published
2025-02-18
How to Cite
Awang, Y., Taib, A., Mohamed Shuhidan, S., & Rashid, N. (2025). Investigating Financial Reporting Fraud Intentions in Malaysian Small and Medium Enterprises (SMEs): A Proposed Framework. Information Management and Business Review, 17(1(I), 204-213. https://doi.org/10.22610/imbr.v17i1(I).4388
Section
Research Paper