Exploring the fraud triangle model and microeconomic factors in zakat embezzlement

Ariffin, Muhammad Irwan and Tengku Mahadi, Tengku Dania Madhihah and Pakair, Suraya and Zolkefle, Dayang Fatin Fatihah (2025) Exploring the fraud triangle model and microeconomic factors in zakat embezzlement. Journal of Islamic Accounting and Finance Research, 7 (1). pp. 21-38. ISSN 2715-0429 E-ISSN 2714-8122

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Abstract

Purpose - This study aims to explore the factors contributing to zakat embezzlement, using the fraud triangle theory and a microeconomic perspective to better understand the underlying dynamics in zakat mismanagement. Method - This study employs a qualitative research methodology, combining a review of relevant literature on the fraud triangle theory and its application to zakat management with thematic content analysis of interviews conducted with two experts in financial corruption and zakat management. The literature review examines academic and industry sources to explore drivers of zakat embezzlement, including opportunities, pressures, and rationalizations. Interviews with a financial management researcher and a zakat management official provide firsthand insights, which complement the desk-based research and contribute to a comprehensive understanding of the issue. Result - The study reveals that financial pressure, weak internal controls, and rationalization drive zakat embezzlement. The lack of transparency and governance in zakat institutions provides opportunities for mismanagement, while personal financial gain and ethical rationalization further exacerbate the issue. Implication - These findings suggest the need for stronger governance, better internal controls, and ethical training in zakat institutions. Strengthening transparency and accountability could reduce opportunities for embezzlement, thereby enhancing the effectiveness of zakat as a tool for poverty alleviation. Originality - This research uniquely applies the fraud triangle framework to zakat embezzlement, integrating microeconomic elements such as utility maximization and information asymmetry.

Item Type:	Article (Journal)
Uncontrolled Keywords:	fraud triangle, governance, Islamic social finance, zakat embezzlement
Subjects:	BPH Islamic Economics BPH Islamic Economics > BPH531 Zakat H Social Sciences > HB Economic Theory > HB126.4 Islamic Economics H Social Sciences > HF Commerce > HF5001 Business. Business Administration > HF5387 Business ethics H Social Sciences > HG Finance > HG4001 Financial management. Business finance. Corporation finance. J Political Science > JQ Political institutions Asia > JQ1758 Public Administration -Religious Aspects - Islam
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Muhammad Irwan Ariffin
Date Deposited:	15 May 2025 11:50
Last Modified:	15 May 2025 11:50
URI:	http://irep.iium.edu.my/id/eprint/121045

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