Title: An empirical analysis of the relation between corporate governance characteristics and the prevention of financial statement fraud

Authors: Nouha Khoufi; Walid Khoufi

Addresses: Accounting Methods, University of Sfax, FSEG 3018, Sfax, Tunisia ' Department of Business and Business Strategies, University of Sfax, IHEC 3061, Sfax, Tunisia

Abstract: Currently, fraud has become a real phenomenon, and insurance companies are making efforts to identify and implement effective means of fraud prevention. The paper aims to investigate whether corporate governance structure may have favoured the reducing of financial irregularities. It proposes modelling the relation between certain governance characteristics and financial statement fraud regarding French listed firms during the period 2009-2013. The research design of this study involves logit cross-sectional regression analysis of 25 fraud firms and 25 no-fraud firms. The study shows that the inclusion of outside members on the board of director increases the board's effectiveness at monitoring management for the prevention of financial statement fraud. The finding will contribute to enhance the existing corporate governance policy in France to foster the achievement of zero financial statement fraud.

Keywords: corporate governance; financial statement fraud; corporate fraud; board of directors; audit committee; logistic regression model.

DOI: 10.1504/IJMED.2018.096254

International Journal of Management and Enterprise Development, 2018 Vol.17 No.4, pp.347 - 362

Received: 24 Mar 2018
Accepted: 17 Sep 2018
Published online: 19 Nov 2018 *

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