Abstract

In the current scenario of the business world, organizations face the pervasive problem of corporate fraud. This leads to huge losses and deprivation results in reduced profitability, diminished shareholders returns, loss of growth in opportunities and in certain cases even these threaten the sustainability of the organizations. Though dedicated investigations units and courts, specific legislation enhanced awareness and monitoring organizations in developing countries but still corporate fraud are abound. Therefore, establishing the key drivers for corporate fraud will enable the organizations to better evaluate their risk strategy and also to understand how to reanalyzing the role of corporate governance in regards to corporate fraud in developing countries.

The qualitative research was used firstly with deductive approach in this study in order to establish the key drivers of corporate fraud; and secondly, to assess the role of corporate governance in addressing these drivers of corporate fraud. A total number of 10 structured, and semi-structured on-line based interviews through Zoom were conducted with the gatekeepers, bank managers and the compliance officers in a diverse range of organizations to explore this research. A further 2 interviews were conducted with the experts in the field of forensic investigation and corporate governance, whose insights views were used to test the initial findings for the triangulation process. The insight derived formed the basis of the data which was analyzed to produce the findings for this research.

From this research, both the internal and external drivers of corporate fraud identified some common themes, though the diverse nature of the organizations researched. Illegal collusion between employees as well as financial distress because of recent economic failure were found to be amongst the key drivers. More particularly, findings indicated that corporate governance does and even play a critical role in regards to these drivers, and thus making the organization more conscious and proactive to address corporate fraud.

Nevertheless, poor and inadequate implementation of corporate governance standards weakens the effectiveness. Thereupon, the real picture is that corporate governance is not legislated and contributes to the haphazard manner in which this is applied in different organizations in developing countries. To conclude that, corporate governance needs to be more supported by an ethical culture which can therefore serve its actual purpose. Despite findings, evidence that corporate governance is neglected by certain organizations. However, the findings from the derived triangulations exercise in strong support on the above findings.