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Financial fraud is a severe corporate fraud committed for achieving various objectives, like attaining financial targets, lowering debt and providing good signals to the market. Such financial fraud deceives stakeholders and results in substantial financial losses. This study aims to detect financial fraud using the modified Beneish M-Score, the most appropriate forensic tool for fraud detection. Furthermore, the current study also examines the influential role of the fraud triangle’s elements (pressure, opportunity and rationalization) on financial fraud in nonfinancial firms during 2018–2021, offering insight for understanding and mitigating fraudulent activities in the corporate world.

Financial fraud is treated as a dependent variable measured through a modified Beneish M-score, while the fraud triangle elements (pressure, opportunity and rationalization) are measured through six proxies, which are financial stability, leverage, financial target, nature of the industry, the effectiveness of supervision and auditor changes.

The study's finding proclaimed that fraud triangle elements result in financial fraud. Findings unveil that all elements (pressure, opportunity and rationalization) of the fraud triangle significantly influence financial fraud. The study confirms that these elements must be considered to protect investors and provide a safe environment for investment.

Rare literature found addressing the detection of financial fraud and its nexus with the fraud triangle specifically in Pakistan where deficient governance is notably prevalent. This study attempts to fill such a gap and contribute to knowledge.

One aspect of agency theory suggests that dominant shareholders use the firm’s assets for their personal benefits and 1thus expropriate minority shareholders (tunneling). Accordingly, this paper aims to examine the effect of capital structure and cash holding decisions on minority shareholders' expropriation for short and long periods.

Data of 16 years (2000-2015) has been obtained from 200 non-financial firms registered at Pakistan Stock Exchange (PSX). The study used fixed effect and autoregressive distributed lagged to obtain the results.

The results suggest that the presence of more debts in capital structure is positively associated with minority shareholders' expropriation, whereas a negative association has been found between the level of cash holding and minority shareholders expropriation. These results have been observed as significant both for the short and long run.

This study also suggests some important measures to control minority shareholders' expropriation by the dominant shareholders and thus to protect their rights.

There is a lack of literature for this severe issue in the developing countries especially Pakistan, so this study narrates the potential measures to the regulatory authority of the market to curb tunneling and to protect minority shareholders.