Triple-entry accounting and fraud detection in public procurement: a design science study of Uzbekistan

Abstract

Triple-entry accounting is known as a system of independently verified transaction records and plays an important role in financial transparency, record integrity, audit reliability and fraud detection. All control functions within the same procurement system are generally expected to develop at the same pace, yet a gap in verification capability is frequently observed between procurement and accounting units. In this study a triple-entry accounting prototype was developed, and the pattern of transaction discrepancies was observed when procurement records were independently verified by the participating institutions. The study developed a verification system for public procurement control that takes into account the shortcomings of fragmented accounting records and delayed audit inspections. In addition, the use of propensity scores helps to improve covariate balance when comparing outcomes across each study group. Under the treatment conditions, procuring organisations, suppliers and treasury agencies used joint recording and verification of orders, invoices and payments respectively; under the comparison conditions, procuring organisations, suppliers and treasury agencies used separate recording and reconciliation of orders, invoices and payments respectively. The resulting outcomes were assessed through propensity-score matching and SEM for the detection of procurement fraud. The results showed that better detection outcomes were obtained under the treatment conditions supporting shared records and verification, with improved record consistency, clearer audit trails and earlier alerts on anomalous cases. Thus, the introduction of triple-entry accounting may increase transparency in public procurement and generate stronger evidence for fraud investigations. The assessment of shared records also shows that gaps in individual verification lead to a loss of audit consistency.