The role of management accounting in fraud control : the case of the City of Joondalup

Abstract

With the background of increased fraudulent activity within organisations in the 21st century, this study examines the pertinence of the management accounting function to fraud control, and its relationship to the traditional external and/or internal audit - based approaches. Given the essentially detail-driven and analytical outlook that management accountants must hold, it is argued that the function should be integral to any fraud control programme in an organisation. The study further considers the role of the management accounting function within the specific sphere of local government organisations in Western Australia and argues that the importance of management accounting to fraud control is particularly relevant in this context. By way of application, the City of Joondalup, as a representative local government, is analysed and specific fraud control measures suggested that can be incorporated into the existing management accounting function there, as well as in Western Australian local governments generally. It is argued, in conclusion, that incorporating fraud control activities as part of management accounting‟s role in an organisation is imperative to empower organisational leadership to successfully manage the risk of fraud.