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An empirical analysis of the relation between corporate governance characteristics and the prevention of financial statement fraud

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  • Nouha Khoufi
  • Walid Khoufi

Abstract

Currently, fraud has become a real phenomenon, and insurance companies are making efforts to identify and implement effective means of fraud prevention. The paper aims to investigate whether corporate governance structure may have favoured the reducing of financial irregularities. It proposes modelling the relation between certain governance characteristics and financial statement fraud regarding French listed firms during the period 2009-2013. The research design of this study involves logit cross-sectional regression analysis of 25 fraud firms and 25 no-fraud firms. The study shows that the inclusion of outside members on the board of director increases the board's effectiveness at monitoring management for the prevention of financial statement fraud. The finding will contribute to enhance the existing corporate governance policy in France to foster the achievement of zero financial statement fraud.

Suggested Citation

  • Nouha Khoufi & Walid Khoufi, 2018. "An empirical analysis of the relation between corporate governance characteristics and the prevention of financial statement fraud," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 17(4), pages 347-362.
    • Handle: RePEc:ids:ijmede:v:17:y:2018:i:4:p:347-362
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    Cited by:

    1. Patrick Velte, 2023. "The link between corporate governance and corporate financial misconduct. A review of archival studies and implications for future research," Management Review Quarterly, Springer, vol. 73(1), pages 353-411, February.
    2. Gianni Onesti & Riccardo Palumbo, 2023. "Tone at the Top for Sustainable Corporate Governance to Prevent Fraud," Sustainability, MDPI, vol. 15(3), pages 1-16, January.

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