FACTORS AFFECTING COMMITTING OF ACCOUNTING FRAUD IN PUBLIC AND PRIVATE BANKS IN WOLKITE TOWN OF GURAGE ZONE, ETHIOPIA

Abstract

A study entitled factors affecting committing of accounting fraud in public and private banks in Wolkite town of Gurage zone, Ethiopia was conducted with the aim of identifying the types of accounting frauds committed and identifying major motivating factors for employees responsible for committing accounting frauds. Data for this study were collected using a semi-structured questionnaire. Both descriptive and econometric methods of data analysis were used for analysing data. Multiple linear regression model as part of the econometric analysis was used to analyse and identify factors affecting committing of accounting fraud in bank. The result of descriptive analysis showed that employees in bank are forced to commit frauds because of the motivation, the opportunity they accessed and rationalization. The result of econometric analysis also revealed that variables namely adherence to accounting rules, internal control effectiveness management morality, information asymmetry, and suitability of the motivational rewarding system were found to significantly determine the commitment of accounting fraud in private and public banks in the study area. The study finally recommended that limiting employees’ access to only the assets, systems, and information necessary for them, keeping in the morality of management, providing different incentive and compensation mechanisms, strengthening the internal bank controlling systems, communicating the employees in a bank with uniform information, and improving awareness of the employees to obey for the accounting rules for minimizing the accounting fraud in private and public banks.