Institutional Factors behind Financial Frauds in Sri Lanka

Hewawasam, H. P. K. N.

doi:10.5281/zenodo.15564108

Currency has historically led to trade, urbanization, and complex economies. Today in Sri Lanka, financial fraud, however, is an increasing risk faced by public and private institutions. This study aims to investigate the underlying causal mechanisms and patterns of financial fraud against the social systems that underpin corporate wrongdoing. Common financial crimes include forgery of documentation, theft of funds, and corruption of fiduciary duty. These crimes are primarily carried on by employees working with people outside the institution. The study is concerned with three main goals: (1) to investigate how corporate financial crimes cause, seeing as they can have both positive and normative manifestations; (2) to identify patterns and institutional risk factors that preclude many forms of fraud; and (3) to suggest risk mitigation measures based on evidence through pattern analysis. The study used a quantitative approach, applying factor analysis and regression for data analysis. The information was gathered from structured questionnaires completed by managers, accountants, or auditors from 435 institutions. The research provides a more nuanced understanding of fraud, or financial crime, at a socio-organizational level in postcolonial Sri Lanka, and offers practitioners tangible risk mitigation suggestions for emerging economies.

Institutional Factors behind Financial Frauds in Sri Lanka

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