Journal of Business & Financial Affairs

Refining and Predicting Financial Fraud on Key Financial Indicators: Profit Margin, Return on Equity, And Inventory Turnover in Mobile Payment Industry in Ghana

Abstract

Solomon Arhin

This study seeks to investigate recent rampant financial frauds and their impact on financial performance of the four mobile payment companies in Ghana. The study used secondary data obtained from the consolidated financial statements for the past ten years (2010-2019) of the mobile payment companies operations around the world. The population for the study consisted of all the subsidiaries of the five companies around the world that were used to prepare the consolidated financial statements. The sample consists of the subsidiaries of the four companies whose consolidated financial information are available for public use. Methodologically, factor analysis, pair sample t-test and principal component analysis were exploited in the analyses to estimate and predict the relationship between fraud and its impact on financial performance indicators. The results revealed that Kaiser-Meyer-Olkin result of .546 indicates that factor analysis used was very useful. The paired samples correlation gave the results that are significantly positively correlated between pair 1 MTN and Vodaphone (p=.872) and pair 2 Airtel and Tigo (p=.234) at an alpha level of 0.05. In the principal component analysis, only one factor has eigenvalues greater than 1 which account for almost 99% of the variability in the profit Margin as an indicator .The combined results offer theoretical contributions in the area of adoption of multiple fraud theories within the framework of neoclassical growth model. The application of the outcome to practice is the use of the result for predictability and financial sustainability of the mobile companies over future periods. Policy makers can use the findings to formulate and amend policies that regulate the operation of mobile payment companies to the benefit of all the stakeholders.