Articles

Determinations of Fraud in Local Governments in the Province of Aceh

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Fraud refers prohibited activities undertaken by individuals both internal and external to the organization, with the aim of obtaining personal and/or collective benefits that result in an immediate disadvantage to other entities. This study aims to examine the effect of the fraud hexagon theory on fraud in Local Government. The test tool used is multiple linear regression analysis using SPSS. Participants in this study consisted of districts and cities in Aceh Province. The findings of this study show that each independent variable, specifically pressure (X1), opportunity (X2), rationalization (X3), capability (X4), arrogance (X5), and collusion (X6), has a major effect on fraud activities in the local government environment in Aceh Province. This research is expected to assess and ensure the effectiveness of risk mitigation measures in countering the various factors that contribute to the occurrence of fraudulent activities. In addition, the findings of this study can serve as additional scientific material for local government entities that intend to improve their fraud prevention strategies.

A Study into the Effects of Internal Audit on the Financial Performance of Commercial Banks in Zambia (A case of Standard Chartered)

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Commercial banks play an important role in an economy by providing financial services. However, in the course of providing these financial services, banks face risks such as fraud that pose a threat to the financial performance of the bank ultimately affecting both shareholders and stakeholders. The internal audit is one of the functions that were created to help mitigate or prevent these risks. The purpose of this study was to determine the effects of internal audit on the financial performance of commercial banks in Zambia with Standard Chartered being the case study. The study had 3 specific objectives; to determine the relationship between internal audit and the financial performance of Standard Chartered, to determine the impact of internal controls on the financial performance of Standard Chartered and to determine the impact of internal audit independence on the financial performance of Standard Chartered. The study presented the theoretical and conceptual frameworks as part of the literature study, which focused on information that is relevant to the internal audit function and the financial performance of commercial banks. The sample population for the study was 156 respondents and the researcher used a questionnaire and interviews to collect data as this was the most appropriate tool given the time of 3 months to complete the research. The questionnaire administered to respondents used the five-point likert scale to rate the responses of the respondents. The researcher used the Statistical Package for Social Sciences (SPSS version 20) software to process and analyse quantitative data while qualitative data was analysed using the thematic analysis. The software was also used to ensure reliability and validity of the research findings. To make the findings easy to understand and interpret, the findings were presented using pie charts, bar charts and tables. Based on the findings, the study concluded that there is a strong positive relationship between internal audit and the financial performance of Standard Chartered. The findings also found that internal controls and internal audit independence have a strong positive impact on the financial performance of Standard Chartered. This research will aid in making sure shareholders and management are aware of the impact internal audit has on the financial performance of commercial banks due to its role as a control system put in place to safeguard interests of both shareholders and stakeholders. The researcher recommended that Standard Chartered must always make sure their internal control systems technology are up to date and that they must also train their internal audit staff regularly to enhance their informational and technical competency. The researcher then proposed what future researchers can research on with regards to this research topic.