An integrative model in predicting corporate tax fraud

Abstract

Purpose

This paper aims to present an integrative model in predicting corporate tax fraud.

Design/methodology/approach

This paper is grounded on three theories, namely, the theory of reasoned action, theory of planned behaviour and the “Fraud Diamond Theory”.

Findings

By integrating these three theories, this paper proposes that individual cognitive factors, fraud diamond factors and organizational factors such as normative and control factors influence managers to commit corporate tax fraud.

Practical implications

Practically, the proposed integrative model enables the government and tax authority to understand on why corporate managers engage in corporate tax fraud. It will also allow them to devise practical methods and strategies to prevent the corporate managers to engage in tax fraud.

Originality/value

This study has merit that proposed an integrative model in predicting corporate tax fraud. Research on corporate tax fraud has been the subject of limited investigation; hence, this study contributes to the tax compliance literature by proposing an integrative model to study corporate tax fraud in a Malaysian tax setting. Future studies can be conducted to test the proposed integrative model in examining the circumstances of managers’ intention to commit corporate tax fraud.

Citation

Azrina Mohd Yusof, N. and Ling Lai, M. (2014), "An integrative model in predicting corporate tax fraud", Journal of Financial Crime, Vol. 21 No. 4, pp. 424-432. https://doi.org/10.1108/JFC-03-2013-0012