Abstract:
This study aims to examine the difference of in the appropriateness of the Fraud Triangle Model
and the Fraud Diamond model in assessing the likelihood Fraudulent Financial Statement. As a
result of the increase of manager's desires toward maximizing their personal benefits on account
of the benefits of other parties; they tend to follow unethical behavior, through committing fraud,
which has a negative impact on the reliability of the information represented by the financial
Statements. To restrict this unethical behavior some studies (Okoli and Izedonmi, 2014; AlNimer,
2015; Rahimi and Amini, 2015) pointed out to the possibility of relying on external audit
process, particularly when it is of a good quality, because of its ability to prevent Fraud in the
Financial Statements.
The Study uses Logistic Regression Model to investigate this relationship. The sample consists
of 100 firms listed in the Egyptian stock exchange for in 2012. The likelihood of Fraudulent
Financial Statement is measured by the integrated results of three models that detect fraud, which
includes; Altman Z Score, P Score and Beneish M- Score. The results of Regression indicate
significant difference between the degree of relevance of Fraud Diamond Model in assessing the
likelihood Fraudulent Financial Statements, Compared to that of the Fraud Triangle Model,
Despite the absence of significant effect of some factors of Fraud Diamond Model, the results
reveal that the factors of Fraud Diamond Model are a good tool for assessing the likelihood
Fraudulent Financial Statements in Egypt. |
International Journal of Social Science & Economic Research
