Research Proposal: Asset Misappropriation and Fraud in Herniman Group

This research proposal examines asset misappropriation, focusing on fraud detection and prevention within the Herniman Group. It investigates the role of external auditors in identifying red flags and implementing effective audit procedures to mitigate risks. The study addresses data security concerns, employee fraud, and the misappropriation of assets, aiming to contribute to a better understanding of the factors that contribute to asset misappropriation and how organizations can strengthen their internal controls. The methodology includes both quantitative and qualitative approaches, employing questionnaires and data analysis to assess the prevalence and impact of asset misappropriation. The proposal outlines the research questions, objectives, justification, and potential outputs, as well as a conceptual framework, methodology, and project budget. The study seeks to identify vulnerable areas and develop strategies to protect sensitive data and organizational assets.

Running head: RESEARCH PROPOSAL
RESEARCH PROPOSAL
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction......................................................................................................................................4
Problem statement...........................................................................................................................4
Aim and objective............................................................................................................................5
Research question............................................................................................................................6
Justification of the project...............................................................................................................6
Potential research output..................................................................................................................7
Contribution to the research.........................................................................................................7
Factors to the theory of knowledge.............................................................................................8
Strengthen the existing model.....................................................................................................8
Extending the extending model...................................................................................................8
Methodology....................................................................................................................................9
Data Source..................................................................................................................................9
Explanation of Methodology.......................................................................................................9
Analyzed data............................................................................................................................10
Conceptual framework...................................................................................................................10
Hypothesis.................................................................................................................................10
Quantitative research.................................................................................................................10
Relationship between dependent and independent variable......................................................11

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Qualitative Research (find out how and why)...........................................................................11
Organization to the study...............................................................................................................11
Elements of the research............................................................................................................11
Work done after research...........................................................................................................11
Gantt chart.....................................................................................................................................12
Project budget and project justification.........................................................................................12
References......................................................................................................................................13

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Introduction
The concept which is related to the sector of the fraud can be related to the sector of the
regulators, investors and the external auditors. One of the area which can be a concern is the
sector of the assist misappropriation due to the factor that it was given very less attention in audit
literature which can be done in prior time framework. This mainly initiated the urge which is
related to the focus of the proposal so that the different areas which is linked to the concept can
be identified and explored (Nawawi et al., 2017). The current study directly purposes a
framework which is related to the external auditors which can help them assess properly and
respond to the risk factors which are fraud arising from the aspect of the misappropriation. The
aspect which is related to the fraud can directly impact the sector which is related to the financial
aspect which is linked to the concept. The organization which is taken into consideration for the
approach of the research proposal is the Herniman Group. The assets control in the organization
can be considered to be very much important which deals with the different prospective of the
options which are dealt with the internal working of the organization.
The main focus point of the research proposal is to take into consideration different areas
of fraud which is related to the assets misappropriation from the view point of the external
auditors. The organization which is focused in the proposal which is the herniman group is taken
due to the factor that it would be exploring different criteria which are linked dot the aspect of
the misappropriation which can be seen in the sector.
Problem statement
Problem Statement 1: The main sector which should be taken into consideration is the security
of the data which would be prevailing into the system.

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Problem Statement 2: The restriction of the intruder activity within the working of the
organization should be restricted.
Problem Statement 3: The total focus area which is related to the concept of the approach
which is related to the different functionality which is retrieved from the implementation of the
different sectors of implementation.
Problem Statement 4: Implementation of red flag in the sector of the effective tool and how
would it be implemented.
Aim and objective
Aim
The main aim of the research proposal is to taken into focus different aspects which is
related to the assets misappropriation sector in dealing with the sensitive data which is indulged
within the organization. The main aim is the securing of the data which is directly linked with the
working of the organization.
Objective
 Deception relating to the employees.
 Embezzlement where the account had been directly manipulated or the generation of
false invoice has been created.
 Taking control of the claims which is related to the false expense.
 Protection of data theft or intellectual theft off property.
 Protection of fraud which is related to the payroll where the payment lhas been fictitious
and diverted (Lehmann, 2015). In this concept the restriction of the development of
‘ghost’ employees have been directly impacted.

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 At the scale end, the asset misappropriation fraud can be directly limited to the cases of
the isolation relating to the expenses fiddling or the lying of the employee about the
qualification to get a desired job.
Research question
Research question 1: The first research question would be how the determination of whether the
auditors who are external perceive the red flag across and within the different types of categories
relating to asset misappropriation which is equally important.
Research question 2: The second research question can be stated that whether the auditors who
are external can perceive the red flags as a tool of effective criteria of detection of the assets
misappropriation.
Research question 3: Which audit procedures would be implemented within the working which
would be helpful in the sector of the detection of the factors which is related to the assets
misappropriation.
Research question 4: How the risk factors in the sector of the implementation can be ignored
and implemented so that mitigation aspect can be implemented within the sector of the internal
working of the organization.
Justification of the project
The concept which is related to the assets misappropriation can directly possess different
types of risk factor within the working of the organization. according to the report which was
made by the ACFE’s, these scheme can be considered as by far the most common form of fraud
related to occupational. The figures which is given in the sector was about 83% of the cases
relating to the fraud was made in this domain (Mustafa Bakri et al., 2017). The project which is

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taken into consideration provides directly limelight in order to mitigate the problem which is
related to the assets misappropriation. The concept desire from the proposal would be the
identification of the areas which are very much vulnerable and the sector of the implementing the
detection and prevention measure, anti-professional fraud can directly reduce the potential
impact of these threat directly to the working of the organization. The main sector which is
related to the steps which is seen in the sector was the common form of employee fraud with the
ACFE’s and the training which was given so that there is no sector of threats which are
associated with the concept (Sadasivam et al., 2016). Security of the data can be stated to be one
of the important factors which is directly linked to the competitive sector of the working of the
organization and one of the important sector which would be helping in the project is the
mitigation plan which would be implemented in the sector of the working with the crucial data of
the organization and how the security aspects would be dwelling within the working and the
processing of the information which is stored in the data.
Potential research output
Contribution to the research
The asset misappropriation involves the process of the stealing of the assets of a company
that is used for personal gains. Therefore, several researches have been conducted to find about
the asset evaluation about the Herniman Group organization in Australia that especially deals in
the development of architectural and interior design development for the people in Australia.
There can be different types of assets in an architectural and interior design based company and
further evaluation of these would be absolutely necessary while making a probable research over
the misappropriation of the asset for Herniman Group.

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Factors to the theory of knowledge
The most common factor about asset misappropriation that adds to the academic
knowledge is that the event occurs only when people appointed within the organization for asset
management is held responsible for the stealing from the organization. Asset misappropriation
may also be known as insider fraud since the fraud occurs when the third party or insider
appointed employees steal the asset of the organization. The research would thus contribute to
the factor that what are the reasons for which a person could possible defy their own employers
and steal the assets of a company (Patterson et al., 2018). It also needs to be justified that what
are the assets that are harmed by these kinds of asset misappropriation.
Strengthen the existing model
The study to find out the reasons and types of asset misappropriation had been assigned
with the organization of Herniman Group in Australia that generally deals in architectural and
interior designs. The company had been selected since it had faced the threats of asset
misappropriation in recent times. Mostly, the asset misappropriation research is based on the
factors of dealing with organizations which are IT based and information generating
organizations, but it is also to be kept in mind that informational asset and other data that affects
the asset of an architectural organization can also deal with trouble for data misappropriation. It
can affect the entire organization which in turn would have an effect on the organization’s
reputation altogether.
Extending the extending model
Therefore, the entire research is based on the factor of evaluating the factors which
affects the asset misappropriation of the architectural organizations. These organizations are
responsible for developing different kinds of architectural buildings like residential complexes,

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Commercial buildings, Hospitality and retirement complexes and others. Therefore, these would
affect the lives of common mass in a bigger way if asset misappropriation factors arise more and
more within the organization. It might also deal with the factors of fraudulent activities regarding
the authority on the lands on which the buildings are erected or on which they are about to be
erected.
Methodology
Data Source
The data collected for the research purpose has been collected by two ways. Firstly, the
data would most likely be collected through the qualitative methodology to find out what are the
asset management factors and the reasons how and why the asset misappropriation affects the
organization in a big way (Patterson et al., 2015). This would further extend with the
methodology of quantitative research where the people within the organization would be given a
set of questionnaires to answer to find out what might be the potential reasons for which a person
would most probably be susceptible to steal the assets from the organization they have been
appointed in.
Explanation of Methodology
In the quantitative research, the people appointed within the organization would be
presented with a set of questionnaires done for all the available employees and further this would
be analyzed with the statistics as presented by the respondent employees. It would also be found
that how many employees have answered all the questions and which responses were kept
incomplete. The incomplete data would be discarded as per the research methodology.
Measurement of asset misappropriation was adopted with some modifications from the

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methodologies as described by different authors. The survey questionnaires were distributed to
employees with hypothetical case scenarios chosen for the completion of the project.
Analyzed data
The analysis have found out the main reasons behind asset misappropriation of the
organization of Herniman Group because there is a lack of research done on the asset
misappropriation in architectural organizations. Although there were a few similar studies in the
past, those studies were carried out to examine some other combinations of various
organizations. The analyzed data was successful to find out the reasons behind the asset
misappropriation of architecture based organizations and why the people employed within the
company would most likely steal from the company they are working with in the first place.
Conceptual framework
The conceptual framework selected for this particular research had been derived from
various different authors who had previously conducted researched on the asset misappropriation
cases.
Hypothesis
The hypothetical situation covers a range of situations, from those who may use valuable
organization asset for personal use and what the organization already allows the employees to
use as personal assets to the employees.
Quantitative research
In the quantitative research, the people appointed within the organization would be
presented with a set of questionnaires done for all the available employees and further this would
be analyzed with the statistics as presented by the respondent employees. It would also be found

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that how many employees have answered all the questions and which responses were kept
incomplete.
Relationship between dependent and independent variable
The dependent variable in this case is the responses of the employees and the independent
variables are the incomplete data that has been not answered by the employees of the company
(Timofeyev, 2016). The relationship between them exists in the analysis of data where the
percentage of people uncomfortable to answer a question or ignorant about that particular phase
were detected.
Qualitative Research (find out how and why)
The data collected for the research purpose has been collected by two ways. Firstly, the
data would most likely be collected through the qualitative methodology to find out what are the
asset management factors and the reasons how and why the asset misappropriation affects the
organization in a big way.
Organization to the study
Elements of the research
The elements of the study chosen for finding out the reasons and factors behind data
misappropriation in Herniman Group were the employee data and the evaluation of them done on
the basis of the hypothesis selected as a result.
Work done after research
The research result made the organization be more attentive to the interview and
employment phase within the organization and in the next phase, had been more careful before

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employing a new person within the company (Nia & Said, 2015). Thorough background
checking had been done before employing a new person.
Gantt chart
ID Task
Mode
Task Name Duration Start Finish Predecessors
0 Research project 33 days Fri 10/5/18Tue 11/20/18
1 Selecting the
topic of the
project
3 days Fri 10/5/18 Tue
10/9/18
2 Developing the proposal framework3 days Wed 10/10/18Fri 10/12/181
3 Performing proper proposal making5 days Mon 10/15/18Fri 10/19/182
4 Doing literature review2 days Mon 10/22/18Tue 10/23/183
5 Preparing proper data collection methodology5 days Wed 10/24/18Tue 10/30/184
6 Collecting the data that are related to the collection of the data3 days Wed 10/31/18Fri 11/2/18 5
7 Performing data collection2 days Mon 11/5/18Tue 11/6/186
8 Analyzing the data that are collected3 days Wed 11/7/18Fri 11/9/18 7
9 Concluding the study2 days Mon 11/12/18Tue 11/13/188
10 Creating draft of the entire study4 days Wed 11/14/18Mon 11/19/189
11 Project closure 1 day Tue 11/20/18Tue 11/20/1810
30 7 14 21 28 4 11 18 25
Sep '18 Oct '18 Nov '18
Project budget
Particulars Budget
Resource collection $12000
Detection of error in problem domain $16000
Implementation of the problem $20000
Control of the problem $14000
Monitoring of the problem $8000
Total budget of the project is = $70000.

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References
Aiken, K. (2016). Analyzing Proactive Fraud Detection Software Tools and the Push for Quicker
Solutions.
Aji, S. S. B. (2018). THE DETERMINANTS AFFECTING FRAUD TRENDS. Asia Pacific
Fraud Journal, 3(1), 21-31.
Baader, G., & Krcmar, H. (2018). Reducing false positives in fraud detection: Combining the red
flag approach with process mining. International Journal of Accounting Information
Systems.
Coyne, J. G., Coyne, E. M., & Walker, K. B. (2016). A model to update accounting curricula for
emerging technologies. Journal of Emerging Technologies in Accounting, 13(1), 161-
169.
Karim, Z. A., Said, J., & Bakri, H. H. M. (2015). An exploratory study on the possibility of
assets misappropriation among royal Malaysian police officials. Procedia Economics and
Finance, 31, 625-631.
Kassem, R. (2014). Detecting asset misappropriation: a framework for external
auditors. International Journal of Accounting, Auditing and Performance Evaluation
(IJAAPE), 10(1), 1-42.
Lehmann, C. M. (2015). Asset Misappropriation Schemes: Short Cases for Use in the
Classroom. Journal of Forensic & Investigative Accounting, 7(2).

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Majid, R. A., Basri, S. A., Mohamed, N., & Ahmad, K. (2016). THE COMMITMENT OF
LOCAL AUTHORITIES IN BUILDING FORTRESS AGAINST
MISAPPROPRIATION OF ASSETS. Malaysian Accounting Review, 15(2).
Mustafa Bakri, H. H., Mohamed, N., & Said, J. (2017). Mitigating asset misappropriation
through integrity and fraud risk elements: Evidence emerging economies. Journal of
Financial Crime, 24(2), 242-255.
Nawawi, A., Khalil, M. A. K. M., & Mahzan, N. (2017). BANKERS’DEMOGRAPHIC
CHARACTERISTICS AND THEIR PERCEPTION ON THE RISK OF ASSET
MISAPPROPRIATION: MALAYSIAN EVIDENCE. e-Academia Journal, 6(1).
Nia, E. H., & Said, J. (2015). Assessing fraud risk factors of assets misappropriation: evidences
from Iranian banks. Procedia Economics and Finance, 31, 919-924.
Patterson, J. L., Goodwin, K. N., & McGarry, J. L. (2018). Understanding and Mitigating Supply
Chain Fraud. Journal of Marketing Development and Competitiveness, 12(1), 70-83.
Sadasivam, G. S., Subrahmanyam, M., Himachalam, D., Pinnamaneni, B. P., & Lakshme, S. M.
(2016). Corporate governance fraud detection from annual reports using big data
analytics. International Journal of Big Data Intelligence, 3(1), 51-60.
Scheetz, A., Smalls, T., Wall, J., & Wilson, A. (2018). The Effect of Organization Type and Size
on Fraud Reporting: Non-Profit Fraud Type Opens Opportunities.
Timofeyev, Y. (2016). Determinants of Asset Misappropriation Duration.