Determinants of Asset Misappropriation at the Workplace: An Application of the S.C.O.R.E. Model

Abstract

This thesis investigates the prevalence of asset misappropriation at the workplace and examines the dominant factors that influence individuals to misappropriate assets at the workplace. Relying on the most recent theory on fraud (the S.C.O.R.E. model) as the theoretical basis, the study examines the effect of Pressure, Rationalization, Capability, Opportunity/Strength of Internal Control System and Ego on Asset Misappropriation at the workplace whilst controlling for the effect of Ethical Values. Further, the study ascertaines if the Perceived Strength of Internal Controls moderates favourably the relationship that these factors have with Asset Misappropriation. A total of 883 valid responses from individuals working in various organizations in Ghana, collected by means of a self-administered questionnaire, were used for the analysis. The hypothesized relationships of the study were tested by means of a structural model analysis using the Partial Least Square based Structural Equation Modelling technique. Results from the structural model analysis demonstrate that individuals misappropriate assets at their workplace due to pressures they face, their ability to rationalize their actions as not wrong, their capabilities and their egos. The results, however, indicate that the extent to which an individual will misappropriate asset depends on the person’s perception of the strength of internal control mechanisms at the workplace. The findings of the study make significant contributions to the fraud discourse. Theoretically, the study is among the first to provide an empirical support for the applicability of the S.C.O.R.E. model in the fraud literature. Again, the study extends the knowledge on occupational fraud literature by examining an area that has received the least research attention: asset misappropriation. The study, as well, highlights the important role of internal controls in reducing the occurrence of asset misappropriation at the workplace. Besides, whereas most studies on occupational fraud focus on one organization, this study is among a few that investigates the phenomenon asset misappropriation across several sectors. The findings from the study are beneficial to business owners, managers of firms and policy makers in establishing ways to mitigate the occurrence of asset misappropriation at the workplace. The study highlights the factors that influence individuals to misappropriate assets at the workplace which points out red flags to look out for. To academic researchers, the study makes insightful recommendations on conducting similar studies with different approaches and focuses, to enrich the emerging discourse on asset misappropriation fraud.