Solomon Islands’ Banking and Finance Sector Plagued by Fraud Cases

Alarming Growth of Financial Transactions Fraud and Financial Statements Fraud

A recent study has highlighted the alarming growth of financial transactions fraud (FTF) and financial statements fraud (FSF) in Solomon Islands, with complex technological developments exacerbating the issue. The research found that auditors and accounting practitioners acknowledge the prevalence of FSF, FTF, and fraud within the public sector, aligning with components of the fraud triangle theory.

Repeated Audited Report Issues Linked to Fraud Cases

According to the study, repeated audited report issues and executive management are positively linked to fraud cases. This is a concern for the country’s financial stability as it suggests that fraudulent activities may be going unchecked.

Doubts Over Effectiveness of International Public-Sector Accounting Standards

The research also casts doubt on the effectiveness of the International Public- Sector Accounting Standards - Cash-basis framework in preventing fraud.

Recommendations for Policymakers

The study recommends revisiting the Provincial Government Act 1997 and the Public Finance Management Act 2013, which are seen as more effective in addressing financial irregularities. It is crucial for policymakers to take note of these findings and implement measures to prevent and detect fraudulent activities in the country’s banking and finance sector.

Fraud Awareness and Knowledge Crucial

Fraud awareness and knowledge play a critical role in decision-making among auditors and other stakeholders. As such, it is essential to understand how fraud impacts the actions of those involved.

Contribution to Literature on Fraud

The study contributes to the literature on fraud by providing insights into the interpretation of fraud with recurring audit issues in Solomon Islands’ public sector.

Call to Action for Financial Authorities and Policymakers

The findings of this research serve as a wake-up call for the country’s financial authorities and policymakers to take immediate action to address the growing problem of banking and finance fraud in Solomon Islands.