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In phase 6, the validation will be conducted to assess the efficiency, the practicality and reliability of the program and identify areas for further improvement. FRAUD DETERRENCE MODEL Identification of the risk factors causing fraudulent activities in the organization in Thailand was carried out using a quantitative research which represented the attitude of the participants in the survey. However, it cannot be concluded that a person displaying such characteristics will commit fraud. Hence, the association rule is more appropriate to be used to find out the important rules for fraud potential to occur in association with each fraud risk factor [19] [20] [28] [30] [32]. POTENTIAL FRAUD RISK BEHAVIORS Apriori algorithm in association rule is selected to find out the potential fraud rules. The samples of 14 strong rules to be used in fraud deterrence model are shown in Table 3. Risk factor Fraud risk behaviors Table 3: 14 best rules for fraud deterrence model Probability to occur fraud Wheeler-dealer attitude Living beyond means and financial difficulties 0.98 Living beyond means, financial difficulties and past legal problems 0.98 Living beyond means and past legal problems 0.96 Past legal problems and refusal to take vacations 0.88 Financial difficulties and refusal to take vacations 0.87 Financial difficulties Living beyond means, wheeler-dealer attitude and past legal problems 0.96 Borrow money from coworkers, wheeler-dealer attitude and past legal problems 0.96 Borrow money from coworkers and wheeler-dealer attitude 0.94 Living beyond means and past legal problems 0.94 Borrow money from coworkers and past legal problems 0.92 Wheeler-dealer attitude and past legal problems 0.92 Past legal problems and refusal to take vacations 0.90 Living beyond means and wheeler-dealer attitude 0.89 Living beyond means Financial difficulties, wheeler-dealer attitude and past legal problems 0.86 From table 3, it seems that “wheeler-dealer attitude”, “financial difficulties” and “living beyond means” are the three key risk factors for a person to potentially commit fraud. However, most people do not want to be a fraudster unless they are in a difficult situation where they are under a lot of pressure and there seems to be no solution for them. For a person to commit fraud, there are usually more than one risk factor involved. For example, an individual who overspends more than he could earn may not commit a fraud. An individual who overspends and has financial difficulty has 98% chances to commit fraud. Nonetheless, fraud can be committed if there is an opportunity and rationalization. SUMMARY OF FRAUD DETERRENCE SYSTEM This model will be used to develop a fraud deterrence system - a tool to predict a potential fraud in the organization. However, it is not easy for staff in the company to fill in the form and admit that they are prone to commit fraud in the organization. Therefore, forensic accountant is needed to conduct a further investigation on staff who are indicated by the system that they may potentially commit fraud i.e. staff who responded that they have 0% or less than 10% of fraud risk behaviors. Forensic accountant will use the personal financial information filled in by staff to check against those questions in the attitude and behavior form. A forensic accountant will also check the financial information of that staff with National Credit Bureau Co.,Ltd. to ensure the accuracy and reliability of the information especially if the staff is at the management level to prevent the white collar crime cases. If needed, forensic accountant may check staff records via Office of the National Anti-Corruption Commission and/or Crime Suppression Division, Royal Thai Police. Human Resources Department should check the records of the staff with their former companies by sampling two to three sources to ensure that the persons do not have bad records regarding legal or performance issues with the previous employers and forward them to the forensic accountant to be used as supporting evidences. The purpose of the fraud deterrence system is to alert or provide an early warning to the owner of the businesses to be aware of the potential fraud. It is a tool to indicate potential frauds in the organization, but it cannot confirm that an individual will be a fraudster. Further investigation should be done by forensic accountant as mentioned to validate the case. If a fraudster has a motivation to commit fraud, without an opportunity, fraud cannot be committed. Therefore, risk management should also be developed and implemented in the firm to deter the fraud activities apart from the fraud deterrence system. CONCLUSION The risk factors causing fraudulent activities in the organization in Thailand are identified from the qualitative and quantitative researches. The association rule is used to capture the fraud risk behaviors of each risk factor. The significant rules which state the high probability to occur fraud activities are selected to be used as fraud deterrence model. The fraud deterrence system will be developed and implemented using the fraud deterrence model as criteria to measure potential frauds in the organization. The forensic accountant will further investigate to ensure the correctness of potential frauds. Fraud deterrence system using forensic accounting and data mining techniques will be a tool to assist the owner of businesses to prevent the fraudulent activities by identifying the potential frauds in the organization in a timely manner. It will also be an instrument to minimize the loss from fraudulent activities and improve the savings. LIMITATION OF RESEARCH This research does not cover specific business risk for each type of business. Samples of fraud risk factors research were selected from Bangkok only. It might be better www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 89
to use the samples from different demographics to identify fraud risk factors. ACKNOWLEDGEMENT The research of “Innovation of Fraud Deterrence System in the Organization using Forensic Accounting and Data Mining Techniques” receives a scholarship from “THE 90 th ANNIVERSARY OF CHULALONGKORN UNIVERSITY FUND (Ratchadaphiseksomphot Endowment Fund)”. REFERENCES [1] Association of Certified Fraud Examiners, (1996), Report to the Nation on occupational fraud & abuse. [2] Association of Certified Fraud Examiners, (2002), Report to the Nation on occupational fraud & abuse. [3] Association of Certified Fraud Examiners, (2004), Report to the Nation on occupational fraud & abuse. [4] Association of Certified Fraud Examiners, (2006), Report to the Nation on occupational fraud & abuse. [5] Association of Certified Fraud Examiners, (2008), Report to the Nation on occupational fraud & abuse. [6] Association of Certified Fraud Examiners, (2010), Report to the Nation on occupational fraud & abuse. [7] Cendrowski, H., Martin, J. P. and Petro, L. W., (2007), The handbook of fraud deterrence, John Wiley & Sons, Inc. [8] Chairatana, P., (2009), Introduction to innovation management. Presentation of Innovation Synthesis 1, Technopreneurship and Innovation Management program, Chulalongkorn University. [9] Coenen, T. L., (2008), Essentials of corporate fraud, John Wiley & Sons, Inc. [10] Criminal Code of Thailand, B.E. 2499 (1956) as amended until the Criminal Code (No.17), B.E. 2547 (2003) [11] Digabriele, J. A., (2008), “An empirical investigation of the relevant skills of forensic accountants,” Journal of Education for Business. [12] Hopwood, W. S., Leiner, J. J. and Young, G. R., (2009), Forensic accounting, International edition, McGraw-Hill. [13] International Standard, (2009), Risk management – principles and guidelines – ISO 31000. [14] Jans, M., Lybaert, N. and Vanhoof, K., (2009), “A framework for internal fraud risk reduction at IT integrating business processes: The IFR 2 framework,” The International Journal of Digital Accounting Research, Vol. 9, 1-29. [15] KPMG, (2007), Fraud survey 2007, Thailand KPMG Phoomchai Business Advisory Ltd. [16] Latshaw, C.A. and Tobin, P.J., (2003), “Fraudulent financial reporting: The government and accounting profession react,” Review of Business. [17] Martin, E. A., (2003), A dictionary of law, Fifth edition, Oxford University Press. [18] Martin, J. P. and Cendrowaki, H., (2008), “Financial statement fraud and the lending decision,” Commercial Lending Review. [19] Mennis, J. and Liu, J. W., (2005), “Mining association rules in spatio-temporal data: An analysis of urban socioeconomic and land cover change,” Transactions in GIS, 9(1), 5–17. [20] Metwally, A., Agrawal, D. and Abbadi, A. E., (n.d.), “Using association rules for fraud detection in web advertising networks,” (n.p.). [21] Muller, E. and Doloreux, D., (2007), “The key dimensions of knowledge intensive business services (KIBS) analysis: a decade of evolution,” Fraunhofer institute for systems and innovation research, working paper firms and region, No. U1/2007. [22] Naruedomkul, P., Rodwanna P. and Wonglimpiyarat J., (2010), “Organization frauds in Thailand: A survey on risk factors,” International Journal of Criminal Justice Sciences, Vol.5 Issue 1, 203-219. [23] Owojori, A. A. and Asaolu, T. O., (2009), “The role of forensic accounting in solving the vexed problem of corporate world,” European Journal of Scientific Research, Vol.29 No.2, 183-187. [24] Panigrahi, P. K., (2006), “Discovering fraud in forensic accounting using data mining techniques,” The chartered Accountant. [25] Pearson, T.A. and Singleton, T.W., (2008), “Fraud and forensic accounting in the digital environment,” Accounting Education, Vol. 23, No. 4, 545-559. [26] Ramamoorti, S., (2008), “The psychology and sociology of fraud: Integrating the behavioral sciences component into fraud and forensic accounting curricula,” Accounting Education, Vol. 23 No. 4, 521– 533. [27] Ramaswamy, V., (2007), “New Frontiers: Training forensic accountants within the accounting program,” Journal of College Teaching & Learning. [28] Sanchez, D., Vila, M. A., Cerda, L. and Serrano, J. M., (2009), “Association rules applied to credit card fraud detection,” Expert Systems with Applications, 36, 3630-3640. [29] Singleton, T.W., Singleton, A., Bologna, J. and Lindquist, R., (2006), Fraud auditing and forensic accounting, 3 rd edition, John Wiley & Sons, Inc. [30] Waiyamai, K. and Pongsiripreeda, T., (n.d.), “Applying association rule discovery to select laws and articles for lawsuit,” (n.p.). [31] Wilhelm, W. K., (2004), “The fraud management lifecycle theory: A holistic approach to fraud management,” Journal of Economic Crime Management, Vol. 2, Issue 2. [32] Yin, X. and Han, J., (n.d.), “CPAR: Classification based on predictive association rules,” (n.p.). [33] Yue, D., Wu, X., Wang, Y., Li, Y. and Chu, C. H., (2007), “A review of data mining-based financial fraud detection research," IEEE. www.theinternationaljournal.org > RJSSM: Volume: 01, Number: 10, Feb-2012 Page 90
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Table of Contents Articles-HR Worki
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Lifelong Learning: The Challenge in
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the fact that Indian society tradit
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stakeholder led partnerships (Guile
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Defarges, P M (1996), Les organizat
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Rubenson K (2006), Constructing the
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Looking at the organization also we
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[10]Nilles,Jack M.(1974), The Telec
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THE EVOLUTION OF HUMAN RESOURCE DEV
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the treatment meted out by the top
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1.Number of pucca houses doubled fr
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in the rural markets of India‖. I
Page 26 and 27:
Sustainable Development in Educatio
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esponsible citizens, we can economi
Page 30 and 31:
Study of Impact of Green Marketing
Page 32 and 33:
est path forward. The authors have
Page 34 and 35:
pollution tax. While converse may n
Page 36 and 37:
established which started as privat
Page 38 and 39:
Principles of Sound lending The ban
Page 40 and 41:
Mithila State Dr. Prem Chandra Thak
Page 42 and 43: (Jatasankar jha PP59 Beginning of m
Page 44 and 45: Leadership to manage Emotions in He
Page 46 and 47: will to pursue it through the devel
Page 48 and 49: thing to do.” There are a few oth
Page 50 and 51: Blake, R. and McCanse, A.A. (1991),
Page 52 and 53: and hence considered the most impor
Page 54 and 55: % of Respondents Percentage of Resp
Page 56 and 57: S.No Income (Rs.) Average monthly f
Page 58 and 59: Bibliography [1] Binu Mathew (2006)
Page 60 and 61: Knowledge evolves over time with ex
Page 62 and 63: The cycle works as follows: A. Figu
Page 64 and 65: of companies listed on Jakarta Isla
Page 66 and 67: [4] R. Ball and P. Brown. "An empir
Page 68 and 69: CKK‟s Advertisement Intervention
Page 70 and 71: Another significant feature of the
Page 72 and 73: Psychological Science [A Journal of
Page 74 and 75: • Have a personal action plan for
Page 76 and 77: • But all the units of the organi
Page 78 and 79: Role of Supply chain in successful
Page 80 and 81: POPULATION, SAMPLING AND SAMPLING S
Page 82 and 83: REFERENCES 1. Ademeso, O.S.and Wind
Page 84 and 85: Table-2:ANOVA Test - Type of owners
Page 86 and 87: Levels of Human Resource Developmen
Page 88 and 89: Area of Moderate backwardness As ma
Page 90 and 91: Criminal Code of Thailand, B.E. 249
Page 94 and 95: 1. Risk factors research Reduce fra
Page 96 and 97: Supply chain management is an integ
Page 98 and 99: . B. Raja Shekar, GVRK Acharyulu, L
Page 100 and 101: other words, it simply means a plan
Page 102 and 103: and encourages communalism which is
Page 104 and 105: From this paper, it has been found
Page 106 and 107: confinement of the research. Thirdl
Page 108 and 109: sentence in India. Adequate safegua
Page 110 and 111: amount of compensation from the Sta
Page 112 and 113: in Joginder Kumar Singh case. It is
Page 114 and 115: 111 TABLE 1. DISTRIBUTION OF WORKER
Page 116 and 117: Appraisal system of the company pay
Page 118 and 119: ITC Limited has a long history of a
Page 120: CONCLUSION The survey indicated tha
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