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Fraud interpretation and disclaimer audit opinion: evidence from the Solomon Islands Public Sector (SIPS)

Malau, W.; Ohalehi, P.; Badr, E.; Yekini, Kemi

Authors

W. Malau

P. Ohalehi

E. Badr

Kemi Yekini



Abstract

Purpose – Financial Transactions Fraud (FTF) and Financial Statements Fraud (FSF) grew exponentially during the last decades coupled with complex and sophisticated technological developments. This study investigates the practitioners’ interpretation of fraud with recurring audit issues in the Disclaimer Audit Opinions (DAOs) reports within the Solomon Islands Public Sector (SIPS).
Design/methodology/approach - The empirical study involves qualitative data analysis. The analysis alongside theoretical developments is informed by the “fraud triangle” theory.
Findings – The research results revealed the practitioners’ acknowledgement of financial statement Fraud, Financial Transaction Fraud and fraud in the SIPS, as generally prevalent and aligned to some components of the fraud triangle theory. This study is sceptic about the good intentions of the International Public-Sector Accounting Standards –Cash-basis (IPSAS) framework and favours the Provincial Government Act 1997 and the Public Finance Management Act 2013 (PFMA) requirements. It further suggests that fraud is positively linked to repeated audited report issues and the executive management when DAOs issues appear repeatedly in annual audit reports.
Originality – This study contributes to the literature on fraud and attempts to link the interpretation of fraud with recurring audit issues in the Disclaimer Audit Opinions (DAOs) reports in the Solomon Islands Public Sector (SIPS). It views fraud awareness and knowledge from the perspective of the audit practitioner. There is an increasing need to understand how fraud knowledge impacts decision making and the actions of auditors and others, an area that is underdeveloped.

Citation

Malau, W., Ohalehi, P., Badr, E., & Yekini, K. (2019). Fraud interpretation and disclaimer audit opinion: evidence from the Solomon Islands Public Sector (SIPS). Managerial Auditing Journal,

Journal Article Type Article
Acceptance Date Nov 11, 2018
Online Publication Date Jun 26, 2019
Publication Date Jun 26, 2019
Deposit Date Nov 14, 2018
Publicly Available Date Nov 14, 2018
Print ISSN 0268-6902
Publisher Emerald
Peer Reviewed Peer Reviewed
Keywords Solomon Islands, Auditing, Fraud, Financial Statement Fraud, Disclaimer Audit Opinions, Public Sector
Public URL https://nottingham-repository.worktribe.com/output/1258530
Publisher URL https://www.emerald.com/insight/content/doi/10.1108/MAJ-04-2018-1867/full/html

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