Islamic Approach Towards Combating Fraud, Abuse and Conflict of Interest in Charitable Organizations

Posted: 26 Aug 2013

See all articles by Radiah Othman

Radiah Othman

Massey University

Rashid Ameer

IPU New Zealand Tertairy Institute

Date Written: August 1, 2012

Abstract

Purpose: Charities credibility and public trust in them have important implications for their survival. The main aim of this paper is to provide alternative views of how fraud, abuse and conflict of interest can be tackled, if not minimized, from an Islamic perspective.

Design/Methodology/approach: This paper explores the application of Islamic values besides acknowledging the role of conventional oversight approach in mitigating fraud in charitable organizations.

Findings: Charitable organizations are not exception to fraud, embezzlement and abuse perpetrated on them by their own managers and employees. Conflicts of interest, if not mitigated, can lead to loss of reputation and eventually the fall of charitable organizations.

Practical implications: We argue from the perspectives of self-interest and lack of religious oversight as underlying problems that could have allowed fraud amongst charitable organizations to occur.

Originality/value: This paper proposes maslahah conceptual framework for resolution of conflict of interest and prevention of fraud in the charities.

Keywords: charities, fraud, control, financial, conflict of interest

Suggested Citation

Othman, Radiah and Ameer, Rashid, Islamic Approach Towards Combating Fraud, Abuse and Conflict of Interest in Charitable Organizations (August 1, 2012). Available at SSRN: https://ssrn.com/abstract=2315914

Radiah Othman (Contact Author)

Massey University ( email )

School of Accountancy
Palmerston North
New Zealand

Rashid Ameer

IPU New Zealand Tertairy Institute ( email )

57 Aokautere Drive
Fitzherbert
Palmerston north
New Zealand

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