Factors of fraud triangle affecting the likelihood of material misstatements in financial statements: An empirical study

Journal of Governance and Regulation

article

Thanh Nga Doan¹  Thu Trang Ta² 

[1] School of Accounting and Auditing, National Economics University;National Economics University

关键词: Financial Statements;    Fraud;    Fraud Triangle;    Material Misstatements;    Vietnam;   

DOI  :  10.22495/jgrv12i1art8

学科分类：社会科学、人文和艺术（综合）

来源: Virtus Interpress

【 摘 要 】

This study aims to identify and examine the three components of the fraud triangle theory that affect the likelihood of material misstatements in financial statements. With a sample of 150 listed companies from two stock exchanges in Vietnam, Ho Chi Minh City (HOSE) and Hanoi Stock Exchange (HNX) in 2019, this study uses multinomial logistic regression analysis to examine the relationship among factors. This study shows the impact of using the elements of the fraud triangle theory in forecasting the likelihood of material misstatement (Cressey, 1953; Romney et al., 1980). The results indicate that the following factors affect the possibility of material misstatements in financial statements of companies: debt ratio, return on assets, independence of the board members, selection of an audit firm, auditor change in comparison with the previous year, and historical financial statements with material misstatements. These findings of the study can be utilized to develop strategies to help identify companies that are likely to have material misstatements in their financial statements.

【 授权许可】

CC BY-NC