A Study of Relationship between Fraud Tendency and Agricultural Cooperatives Performance in Nakhon Ratchasima Province

Abstract

This research purposes were 1. to examine the relationship between the fraud tendency, as measured by the Altman Z-score, and the performance of agricultural cooperatives and 2. to analyze the impact of firm size and the debt-to-equity (D/E) ratio on the performance of agricultural cooperatives. This study employed a quantitative research design. The research instrument was a data collection form used to obtain financial reports and operational performance data of agricultural cooperatives in Nakhon Ratchasima Province that had been in continuous operation over a period of 10 years (2014–2023) from the Cooperative Financial Information Service System of the Cooperative Auditing Department. The research sample consisted of 710 agricultural cooperatives in Nakhon Ratchasima Province, selected through purposive sampling. The information gathered was then analyzed regarding multiple regression analysis, using the Altman Z-score as the independent variable and the cooperative’s performance (ROE) as the dependent variable. Firm size and debt-to-equity (D/E) ratio are included as control variables. The results reveal that 1) the fraud tendency, as indicated by a higher Altman Z-score, is significantly and negatively associated with the return on equity (ROE). In other words, agricultural cooperatives with a higher tendency toward financial stability and lower fraud risk tend to have significantly lower ROE. Additionally, the findings show that 2) firm size and the debt-to-equity ratio have no statistically significant impact on the performance of agricultural cooperatives (ROE). Furthermore, the multiple regression model reveals only 1.6% of the variance on ROE, suggesting that other unexamined factors may play a more significant role in determining cooperative performance in Nakhon Ratchasima Province.