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Fraud interpretation and disclaimer audit opinion: Evidence from the Solomon Islands public sector (SIPS)

Malau, Walter Cameron; Ohalehi, Paschal; Badr, Eldin Soha; Yekini, Kemi

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Authors

Walter Cameron Malau

Paschal Ohalehi

Eldin Soha Badr



Abstract

PURPOSE:
Financial transactions fraud (FTF) and financial statements fraud (FSF) grew exponentially during the past decades coupled with complex and sophisticated technological developments. This study aims to investigate the practitioners’ interpretation of fraud with recurring audit issues in the disclaimer audit opinions (DAOs) reports within the Solomon Islands public sector (SIPS).

// DESIGN/METHODOLOGY/APPROACH:
The empirical study involves qualitative data analysis. The analysis alongside theoretical developments is informed by the “fraud triangle” theory.

// FINDINGS:
The research results revealed the practitioners’ acknowledgement of FSF, FTF and fraud in the SIPS, as generally prevalent and aligned to some components of the fraud triangle theory. This study is sceptic about the good intentions of the International Public-Sector Accounting Standards –Cash-basis framework and favours the Provincial Government Act 1997 and the Public Finance Management Act 2013 requirements. It further suggests that fraud is positively linked to repeated audited report issues and the executive management when DAOs issues appear repeatedly in annual audit reports.

// ORIGINALITY/VALUE:
This study contributes to the literature on fraud and attempts to link the interpretation of fraud with recurring audit issues in the DAOs reports in the SIPS. It views fraud awareness and knowledge from the perspective of the audit practitioner. There is an increasing need to understand how fraud knowledge impacts decision making and the actions of auditors and others, an area that is underdeveloped.

Citation

Malau, W. C., Ohalehi, P., Badr, E. S., & Yekini, K. (2021). Fraud interpretation and disclaimer audit opinion: Evidence from the Solomon Islands public sector (SIPS). Managerial Auditing Journal, 36(2), 240-260. https://doi.org/10.1108/MAJ-04-2018-1867

Journal Article Type Article
Acceptance Date Nov 11, 2018
Online Publication Date Jun 26, 2019
Publication Date May 14, 2021
Deposit Date Jan 8, 2020
Publicly Available Date Jan 8, 2020
Journal Managerial Auditing Journal
Print ISSN 0268-6902
Electronic ISSN 1758-7735
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 36
Issue 2
Pages 240-260
DOI https://doi.org/10.1108/MAJ-04-2018-1867

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Copyright Statement
© 2019 Emerald Publishing Limited. This is the accepted manuscript of an article published by Emerald in Managerial Auditing Journal,
available online: https://doi.org/10.1108/MAJ-04-2018-1867





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