engleski

Accountants' views regarding the effectiveness of fraud prevention controls

Confidence in the reliability and objectivity of the financial statements has been significantly reduced due to numerous accounting and auditing scandals. The paper provides a systematization of the existing scientific fraud inside and the various causes of fraud occurrence. Moreover, it highlights the importance of control mechanisms in preventing undesirable fraud events occurrence. This paper puts emphasis on design and implementation of appropriate internal controls systems, in order to assure high quality information presented in financial statements. Fraud prevention controls have a significant role in ensuring reliable financial reporting. In addition to the overview of the existing fraud awareness the paper examines the most common anti-fraud controls. A review of the conducted empirical research was built upon information made available through companies in the Republic of Croatia on the sample of subjects consisted of accountants and external auditors. For the purpose of this study, the accountants' and external auditors’ perception of effectiveness of the fraud prevention controls is examined. Both, theoretical and empirical results of the paper provide information on the most effective fraud prevention controls that may contribute reducing the risks of fraud, as well as reducing the costs of fraud and shortening the time for fraud detection. The results of the research clearly indicate the significant impact of internal controls on the prevention of fraudulent financial reporting.

fraudulent financial reporting ; fraud prevention control ; accountants ; auditors

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