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

Author

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  • Yunita Awang
  • Azuraidah Taib
  • Shazalina Mohamed Shuhidan
  • Norfadzilah Rashid

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

Suggested Citation

  • Yunita Awang & Azuraidah Taib & Shazalina Mohamed Shuhidan & Norfadzilah Rashid, 2025. "Investigating Financial Reporting Fraud Intentions in Malaysian Small and Medium Enterprises (SMEs): A Proposed Framework," Information Management and Business Review, AMH International, vol. 17(1), pages 204-213.
    • Handle: RePEc:rnd:arimbr:v:17:y:2025:i:1:p:204-213
    DOI: 10.22610/imbr.v17i1(I).4388
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    References listed on IDEAS

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    5. Yunita Awang & Suhaiza Ismail, 2018. "Determinants of financial reporting fraud intention among accounting practitioners in the banking sector," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(1), pages 32-54, February.
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