{"id":20940,"date":"2025-12-03T20:16:04","date_gmt":"2025-12-03T18:16:04","guid":{"rendered":"https:\/\/modecon.mnau.edu.ua\/?p=20940"},"modified":"2025-12-03T22:52:25","modified_gmt":"2025-12-03T20:52:25","slug":"internal-control-and-technological-tools","status":"publish","type":"post","link":"https:\/\/modecon.mnau.edu.ua\/en\/internal-control-and-technological-tools\/","title":{"rendered":"Luhova O., Politikina I. Internal Control and Technological Tools to Combat Accounting and Tax Fraud"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]<\/p>\n\n\n\n
JEL Classification:<\/strong> H 26, K42; M 40.<\/span><\/i><\/td>\nDOI<\/b>: https:\/\/doi.org\/10.31521\/modecon.V53(2025)-24<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[\/vc_column_text][vc_column_text]Luhova Olha, <\/b>Candidate of Economic Sciences, Associate Professor of the Department of Accounting and Taxation, Mykolaiv National Agrarian University, Mykolaiv, Ukraine<\/span><\/p>\n

ORCID ID:<\/strong> 0000-0003-4432-0295<\/span><\/a>
\ne-mail: <\/strong>lugova@mnau.edu.ua<\/span><\/a><\/p>\n

Politikina Inna, <\/b>student of the Accounting and Finance Faculty, Mykolaiv National Agrarian University, Mykolaiv, Ukraine<\/span><\/p>\n

ORCID ID:<\/strong> 0009-0002-7144-0882<\/span><\/a>
\ne-mail: <\/strong>innapolitikina965@gmail.com<\/span><\/a><\/p>\n

Internal Control and Technological Tools to Combat Accounting and Tax Fraud<\/b><\/h2>\n

Abstract. Introduction<\/i><\/b>. <\/span><\/i>Occupational fraud remains one of the most widespread and damaging threats to organizations across industries and countries. According to estimates by the Association of Certified Fraud Examiners (ACFE), organizations lose around 5% of their annual revenues due to fraudulent activities, which amounts to trillions of dollars globally. High-profile scandals such as Enron, WorldCom and Wirecard illustrate the devastating consequences of fraud, which go far beyond financial losses and include reputational damage, legal repercussions, and declining stakeholder trust. The increasing complexity of financial operations, digitalization, and globalization have created new opportunities for fraudulent schemes, making the study of occupational fraud highly relevant.<\/span><\/i><\/p>\n

Purpose<\/i><\/b>. The aim of the research is to provide a comprehensive assessment of the current state of occupational fraud, identify its most common forms and risk factors, and define effective approaches, tools, and technologies for its detection and prevention.<\/span><\/i><\/p>\n

Results<\/i><\/b>. The study, based on ACFE\u2019s Occupational Fraud 2024 Report to the Nations, confirms that occupational fraud schemes fall into three major categories: asset misappropriation, corruption\u00a0 and financial statement fraud. Fraudsters frequently combine two or more schemes, particularly asset misappropriation and corruption. Collusion among multiple perpetrators and fraud committed by executives lead to faster and more severe financial damage. The most common concealment methods remain falsification or alteration of documents, while fraud detection primarily relies on tips, followed by internal audit and managerial review. Proactive detection mechanisms reduce both the duration of fraud schemes and their financial impact. The analysis highlights the role of internal control weaknesses – such as lack of oversight, override of controls, or unethical \u201ctone at the top\u201d – as key enablers of fraud. Advanced technologies, including big data analytics, artificial intelligence, machine learning, blockchain, and biometric tools, are increasingly adopted by organizations to enhance monitoring, anomaly detection, and preventive measures.<\/span><\/i><\/p>\n

Conclusions<\/i><\/b>. The findings emphasize that occupational fraud represents a systemic challenge that cannot be addressed by financial controls alone. An effective anti-fraud strategy requires an integrated approach that combines modern technological solutions with ethical leadership, corporate culture of integrity, strong governance, and continuous staff awareness. Such a holistic framework reduces both the likelihood and the impact of fraud, strengthening organizational resilience in the face of evolving threats.<\/span><\/i><\/p>\n

Keywords<\/b>: professional fraud; internal control; accounting; taxation; financial losses; behavioural indicators.<\/span><\/i><\/p>\n

References<\/b>:<\/strong><\/p>\n

    \n
  1. Campa, D., Quagli, A., & Ramassa, P. (2023). The roles and interplay of enforcers and auditors in the context of accounting fraud: a review of the accounting literature. <\/span>Journal of Accounting Literature<\/span><\/i>.<\/span> Vol. 47 No. 5, 151-183. <\/span>https:\/\/doi.org\/10.1108\/JAL-07-2023-0134<\/span>.<\/span><\/li>\n
  2. Mutschmann, M., Hasso, T., & Pelster, M. (2021). Dark triad managerial personality and financial reporting manipulation. <\/span>Journal of Business Ethics<\/span><\/i>, 1-26. URL: <\/span>https:\/\/ideas.repec.org\/a\/kap\/jbuset\/v181y2022i3d10.1007_s10551-021-04959-1.html<\/span>.<\/span><\/li>\n
  3. Occupational Fraud 2024: A Report to the Nations. https:\/\/www.acfe.com\/-\/media\/files\/acfe\/pdfs\/rttn\/2024\/2024-report-to-the-nations.pdf.<\/span><\/li>\n
  4. Fraud Risk Management Guide. URL: https:\/\/www.acfe.com\/fraud-resources\/fraud-risk-tools—coso\/fraud-risk-management-guide.<\/span><\/li>\n
  5. Shahana, T., Lavanya, V., & Bhat, A.R. (2023). State of the art in financial statement fraud detection: A systematic review. <\/span>Technological Forecasting and Social Change<\/span><\/i>, 192, 122527. https:\/\/ideas.repec.org\/a\/eee\/tefoso\/v192y2023ics0040162523002123.html.<\/span><\/li>\n
  6. Lartey, P.Y., Akolgo, I.G., Jaladi, S.R., Ayeduvor, S., & Afriyie, S.O. (2023). Recent advances in internal control: Soft control overcoming the limits of hard control. <\/span>Frontiers in Management and Business<\/span><\/i>, 4(1), 289-302. https:\/\/www.syncsci.com\/journal\/FMB\/article\/view\/FMB.2023.01.004.<\/span><\/li>\n
  7. Hasan, A.R. (2021). Artificial Intelligence (AI) in accounting & auditing: A Literature review. <\/span>Open Journal of Business and Management<\/span><\/i>, 10(1), 440-465. https:\/\/www.scirp.org\/journal\/paperinformation?paperid=115007.<\/span><\/li>\n
  8. Ashtiani, M.N., & Raahemi, B. (2021). Intelligent fraud detection in financial statements using machine learning and data mining: a systematic literature review. <\/span>Ieee Access<\/span><\/i>, 10, 72504-72525. https:\/\/www.researchgate.net\/publication\/363364663_Intelligent_Fraud_Detection_in_Financial_Statements_Using_Machine_Learning_and_Data_Mining_A_Systematic_Literature_Review.<\/span><\/li>\n
  9. Lakhan, A., Mohammed, M.A., Ibrahim, D.A., Kadry, S., & Abdulkareem, K.H. (2022). ITS based on deep graph convolutional fraud detection network blockchain-enabled fogcloud. <\/span>IEEE Transactions on Intelligent Transportation Systems<\/span><\/i>. <\/span>https:\/\/www.researchgate.net\/publication\/358650154_ITS_Based_on_Deep_Graph_Convolutional_Fraud_Detection_Network_Blockchain-Enabled_Fog-Cloud<\/span> .<\/span><\/li>\n
  10. 2024 Anti-fraud technology benchmarking report. https:\/\/www.sas.com\/content\/dam\/SAS\/documents\/marketing-whitepapers-ebooks\/third-party-whitepapers\/en\/acfe-anti-fraud-technology-benchmark-report-113778.pdf?utm_source=linkedin&utm_medium=social-cpc&utm_campaign=public-sector-us-fsi-gen-americas&utm_content=pt-US_lead-gen-form.<\/span><\/li>\n<\/ol>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Received: <\/strong>6 October<\/span> 2025<\/span><\/p>\n

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    Luhova O., Politikina I. (2025). Internal Control and Technological Tools to Combat Accounting and Tax Fraud. Modern Economics, 53(2025), 174-181. DOI: https:\/\/doi.org\/10.31521\/modecon.V53(2025)-24.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

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    [vc_row][vc_column][vc_column_text] JEL Classification: H 26, K42; M 40. DOI: https:\/\/doi.org\/10.31521\/modecon.V53(2025)-24 [\/vc_column_text][vc_column_text]Luhova Olha, Candidate of Economic Sciences, Associate Professor of the Department of Accounting and Taxation, Mykolaiv National Agrarian University, Mykolaiv, Ukraine ORCID ID: 0000-0003-4432-0295 e-mail: lugova@mnau.edu.ua Politikina Inna, student of the Accounting and Finance Faculty, Mykolaiv National Agrarian University, Mykolaiv, Ukraine ORCID ID: 0009-0002-7144-0882 e-mail:
    Read more<\/a><\/p>\n","protected":false},"author":11,"featured_media":13475,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[242],"class_list":["post-20940","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-53-2025","tag-53-2025"],"_links":{"self":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/20940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/comments?post=20940"}],"version-history":[{"count":3,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/20940\/revisions"}],"predecessor-version":[{"id":21130,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/posts\/20940\/revisions\/21130"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/media\/13475"}],"wp:attachment":[{"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/media?parent=20940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/categories?post=20940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/modecon.mnau.edu.ua\/en\/wp-json\/wp\/v2\/tags?post=20940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}