Understanding fraud in Malaysian SMEs

Abstract

Purpose: The paper aims to provide an overview of fraud risk among Malaysian small- and medium-sized enterprises (SMEs). In particular, the authors investigate the understanding of SME owners and managers on fraud schemes and the usage of antifraud measures. Design/methodology/approach: A sample of 126 Malaysian SMEs from different industries participated in this study. Findings: The results suggest that Malaysian SMEs are exposed to a broad range of fraud schemes, yet few take actions to prevent these frauds. Practical implications: The findings should be useful to academic researchers, entrepreneurs, regulators and others who are interested in understanding the fraud risk in small businesses. Originality/value: This study extends and contributes to prior literature by linking the state of fraud and SMEs in developing countries.