The Fraud Detecting Scorecard－A Fraud Detecting Model from Balanced Scorecard Perspective

• In Event: Research in Progress

Abstract

This paper constructs a new fraud detecting model to address a firm’s corporate governance and strategic management issues from the balanced scorecard perspective, namely a Fraud Detecting Scorecard. According to many case surveys, frauds activities often takes advantage of a firm’s long-term growth plans; and it changes as long with company’s strategic plan as well. As such that in order for fraud detection scheme to be effective, it is important to enhance it in accordance with company’s grand strategy. The balanced scorecard is a very effective management tool that adopted by many firms in their strategy execution and performance evaluation, and in addition it also provides a future roadmap for the company. By incorporating Donald R. Cressey’s fraud triangle hypothesis with Drs. Robert S. Kaplan and David P. Norton’s concept of BSC, we attempts to integrate the motive (or pressure) factor with financial and customer perspectives, opportunistic factor with internal business processes perspectives, and rationalization factor with learning and growth perspectives. By using the fraud causal factors to test each perspective of the strategy, and the potential breaking points can be determined; and by removing one of the elements in the fraud triangle, it is possible reduce the likelihood of fraudulent activities, from a long-term perspective.

Authors

• Bo-Tsang Liau, National Chengchi University

• Yen-Chun Kuo, National Taiwan University