A Study on Corporate Governance and Financial Fraud In the Kingdom of Bahrain


Authors : Maryam Ali Mohamed Al Musalam.

Volume/Issue : Volume 4 - 2019, Issue 1 - January

Google Scholar : https://goo.gl/DF9R4u

Scribd : https://goo.gl/vLzbFi

Thomson Reuters ResearcherID : https://goo.gl/KTXLC3

Abstract : This case study was conducted to determine the relationship between corporate governance and financial fraud in the different business in the Kingdom of Bahrain. The study was conducted in order to help the stakeholders and other users of the financial statement about the possibility of those charged with governance to commit financial fraud. This study could also be a good source of information for future researches of other students particularly from AMA about financial fraud and corporate governance. The objectives of this research include analyzing the impact of board of directors on combating financial fraud in the commercial companies in Bahrain, examining the effect of audit committee size in reducing the financial fraud, understanding the impact of company ownership structure in reducing the financial fraud, studying the effects of audit firm type in reducing the financial fraud and analyzing the impact of the board composition on opposing financial fraud in the commercial companies in Bahrain. A descriptive research was utilized in this study. Questionnaires were distributed among the financial executives of the different companies in Bahrain using Convenience Sampling method. A total of 48 sample size was identified and where questions were rated using the Likert Scale. The information gathered were analysed using the SPSS software, aside from T-test, regression and Cronbach’s Alpha. The results of this research showed that there is a significant relationship between the size of the board directors, size of the audit committee, ownership structure, audit firm type and the board composition with financial fraud. It is recommended that Board of Directors should be a least six with two of them coming from external sources, managers must give more attention to investors’ interests of the organization, all Corporate Governance should design measures avoid the malpractices, organizations must encourage the participation of shareholders in board meetings, companies must disclose related party transactions with the major investors and directors, and companies must utilize external board members in audit committee.

Keywords : Audit, Corporate Governance, Financial Fraud, Fraud, Governance.

This case study was conducted to determine the relationship between corporate governance and financial fraud in the different business in the Kingdom of Bahrain. The study was conducted in order to help the stakeholders and other users of the financial statement about the possibility of those charged with governance to commit financial fraud. This study could also be a good source of information for future researches of other students particularly from AMA about financial fraud and corporate governance. The objectives of this research include analyzing the impact of board of directors on combating financial fraud in the commercial companies in Bahrain, examining the effect of audit committee size in reducing the financial fraud, understanding the impact of company ownership structure in reducing the financial fraud, studying the effects of audit firm type in reducing the financial fraud and analyzing the impact of the board composition on opposing financial fraud in the commercial companies in Bahrain. A descriptive research was utilized in this study. Questionnaires were distributed among the financial executives of the different companies in Bahrain using Convenience Sampling method. A total of 48 sample size was identified and where questions were rated using the Likert Scale. The information gathered were analysed using the SPSS software, aside from T-test, regression and Cronbach’s Alpha. The results of this research showed that there is a significant relationship between the size of the board directors, size of the audit committee, ownership structure, audit firm type and the board composition with financial fraud. It is recommended that Board of Directors should be a least six with two of them coming from external sources, managers must give more attention to investors’ interests of the organization, all Corporate Governance should design measures avoid the malpractices, organizations must encourage the participation of shareholders in board meetings, companies must disclose related party transactions with the major investors and directors, and companies must utilize external board members in audit committee.

Keywords : Audit, Corporate Governance, Financial Fraud, Fraud, Governance.

Never miss an update from Papermashup

Get notified about the latest tutorials and downloads.

Subscribe by Email

Get alerts directly into your inbox after each post and stay updated.
Subscribe
OR

Subscribe by RSS

Add our RSS to your feedreader to get regular updates from us.
Subscribe