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Study Reveals Insights into Fraud Prevention Mechanisms in Jordanian Companies

A recent study conducted by researchers has shed light on the effectiveness of fraud prevention mechanisms in Jordanian companies listed on the Amman Stock Exchange (ASE). The study aimed to gather information on respondents’ profiles, their views on fraud and related matters, and their opinions on the existence and effectiveness of fraud prevention mechanisms.

Respondents’ Profile

Methodology

The survey was distributed to 168 companies, with a response rate of 80%. The majority of respondents came from the financial sector (50%), followed by service (24%) and industry (26%). In terms of educational background, 75% of respondents held a bachelor’s degree. The majority of respondents were certified public accountants (35%), certified internal auditors (18%), or certified fraud examiners (4%).

Fraud Prevention Mechanisms

Top Three Mechanisms

The study found that the top three fraud prevention mechanisms in Jordanian companies listed on the ASE are:

  • Management review of internal control
  • Internal audit functions
  • External audits of financial statements

These mechanisms were perceived as being highly effective by respondents.

Least Implemented Mechanisms

On the other hand, three mechanisms achieved low percentages in terms of existence:

  • Job rotation/mandatory vacation (45.9%)
  • Formal fraud risk assessments from specialist professional firms (11.1%)
  • Rewards for whistle-blowers (7%)

This suggests that these mechanisms may not be widely implemented in Jordanian companies, possibly due to internal organizational culture.

Conclusion

The study highlights the importance of effective fraud prevention mechanisms in Jordanian companies. While some mechanisms are widely implemented, others require attention and improvement. The findings of this study can serve as a valuable guide for organizations looking to enhance their fraud prevention strategies and improve transparency and accountability.