Analysis of Diamond Fraud and Individual Morality on Village Fund Fraud
DOI:
https://doi.org/10.55980/ebasr.v3i2.136Keywords:
Corruption, Fraud Diamond, Individual Morality, Village Fund FraudAbstract
This study investigates the key drivers of village fund fraud, expanding on the established fraud diamond model. Conducted in the Patallasang sub-district of Gowa Regency, the research surveyed 51 village government officials to analyze the influence of pressure, opportunity, rationalization, capabilities, and individual morality on fraudulent activities related to village funds. The results reveal that pressure, opportunity, and rationalization have significant positive effects on village fund fraud, while capabilities and individual morality exert significant negative influences. Individual morality emerges as the most dominant factor in determining the occurrence of village fund fraud. This study contributes to the theoretical development of the fraud diamond framework by incorporating individual morality as a critical causal element in understanding fraud within the village fund context. The findings of this study hold important implications for policymakers and local government authorities tasked with mitigating fraud and ensuring the effective utilization of village funds. By addressing the multifaceted drivers identified, targeted interventions can be designed to strengthen governance, promote ethical decision-making, and safeguard the integrity of village-level financial management.
References
Abdul Mumin, M., Adam, I. O., & Alhassan, M. D. (2024). The impact of ICT capabilities on supply chain fraud and sustainability – a dynamic capability perspective. Technological Sustainability, 3(2), 123–146. https://doi.org/10.1108/TECHS-11-2023-0051
Abdullah, M. W., Hanafie, H., & Bayan, A. Y. M. (2023). Internal Governance and Fraud Prevention System: the Potentiality of the Spiritual Quotient. Journal of Governance and Regulation, 12(4), 50–59. https://doi.org/10.22495/jgrv12i4art5
Alfarago, D., Syukur, M., & Mabrur, A. (2023). The Likelihood of Fraud From the Fraud Hexagon Perspective: Evidence From Indonesia. ABAC Journal, 43(1), 34–51.
Amponsah, A. A., Adekoya, A. F., & Weyori, B. A. (2022). Improving the Financial Security of National Health Insurance using Cloud-Based Blockchain Technology Application. International Journal of Information Management Data Insights, 2(1), 100081. https://doi.org/10.1016/j.jjimei.2022.100081
Amrani, H., Ali, M., Nurhidayat, S., & Wibowo, A. (2023). Financial Penalties for Corruption Crimes: Examining the State Burden and Restrictive Deterrence for Crime Perpetrators. International Journal of Criminal Justice Sciences, 18(1), 426–438. https://doi.org/10.5281/zenodo.4756223
Anandya, D., & Easter, L. (2023). Laporan Hasil Pemantauan Tren Penindakan Kasus Korupsi Tahun 2022 “Korupsi Lintas Trias Politika.” In Indonesia Corruption Watch (ICW). https://antikorupsi.org/sites/default/files/dokumen/Narasi Laporan Tren Penindakan Korupsi Tahun 2022.pdf
Arend, R. J. (2024). Role, Values, Person and Context: A Story of ‘Bent’repreneurship. Administrative Sciences, 14(6), 118. https://doi.org/10.3390/admsci14060118
Flayyih, H. H., & Khiari, W. (2023). An Empirical Study To Detect Agency Problems in Listed Corporations: the Emerging Market Study. Journal of Governance and Regulation, 12(1 Special Issue), 208–217. https://doi.org/10.22495/jgrv12i1siart1
Ginting, A. H., Widianingsih, I., Mulyawan, R., & Nurasa, H. (2024). Village fund program in Cibeureum and Sukapura village, Bandung Regency, Indonesia: Problems, risks, and solutions. Cogent Social Sciences, 10(1). https://doi.org/10.1080/23311886.2024.2303452
Houdek, P. (2020). Fraud and Understanding the Moral Mind: Need for Implementation of Organizational Characteristics into Behavioral Ethics. Science and Engineering Ethics, 26(2), 691–707. https://doi.org/10.1007/s11948-019-00117-z
Ilieva, M. (2024). The Olympus scandal – the dark side of social networks and corporate culture. Critical Perspectives on International Business, 20(4), 409–442. https://doi.org/10.1108/cpoib-09-2020-0126
Kasim, A., Rimi, A. M., Abdurrahim, Supriyadi, & Purnamasari, A. I. (2023). Restorative Justice to Prevent Village Fund Corruption Crimes: A Constitutional Law and Indonesian Criminal Law Perspective. International Journal of Criminal Justice Sciences, 18(1), 97–112. https://doi.org/10.5281/zenodo.4756207
Kassem, R. (2024). Police Crime: Investigating Insider Fraud in UK Policing. Deviant Behavior, 45(2), 226–246. https://doi.org/10.1080/01639625.2023.2244116
Mainingrum, R., Sjarlis, S., Oktaviani, A. R., & Reno Fithri Meuthia. (2023). The Effect of Audit Findings, Follow-Up Audit Recommendations, And BPK Opinions from The Previous Year on The Determination of Opinions in Local Government Financial Statements. Economics, Business, Accounting & Society Review, 2(1), 58–73. https://doi.org/10.55980/ebasr.v2i1.56
Maulidi, A. (2020). When and why (honest) people commit fraudulent behaviours? Journal of Financial Crime, 27(2), 541–559. https://doi.org/10.1108/JFC-05-2019-0058
Nurul Fauzi, Cicalarici, C., & Rosita, I. (2023). Accountability Mechanism in Village Owned Financial Institutions: A Case Study on Communal-Based Financial Institutions in West Sumatra. Economics, Business, Accounting & Society Review, 2(3), 230–240. https://doi.org/10.55980/ebasr.v2i3.117
Poernomo, S. L., Zulkarnaen, Rahman, S., & Malik, P. (2024). The Urgency of Terminating Investigations in Handling Corruption Cases in the Jurisdiction of the High Prosecutor’S Office South Sulawesi. Revista de Gestao Social e Ambiental, 18(9), 1–15. https://doi.org/10.24857/rgsa.v18n9-044
Purba, R. B., Aulia, F., Tarigan, V. C. E., Pramono, A. J., & Umar, H. (2022). Detection of Corruption in Village Fund Management using Fraud Analysis. Quality - Access to Success, 23(190), 120–128. https://doi.org/10.47750/QAS/23.190.14
Putri, C. M., Argilés-Bosch, J. M., & Ravenda, D. (2024). Creating good village governance: an effort to prevent village corruption in Indonesia. Journal of Financial Crime, 31(2), 455–468. https://doi.org/10.1108/JFC-11-2022-0266
Rahman, S., Darmwangsa, A., Husen, L. O., & Hidjaz, K. (2024). The Nature of the Role of the Prosecutor’S Office in Preventing Corruption in Maluku Province. Revista de Gestao Social e Ambiental, 18(7), 1–18. https://doi.org/10.24857/rgsa.v18n7-118
Said, J., Alam, M. M., & Johari, R. J. (2020). Assessment of risk management practices in the public sector of Malaysia. International Journal of Business and Emerging Markets, 12(4), 377. https://doi.org/10.1504/IJBEM.2020.111737
Saluja, S., Aggarwal, A., & Mittal, A. (2022). Understanding the fraud theories and advancing with integrity model. Journal of Financial Crime, 29(4), 1318–1328. https://doi.org/10.1108/JFC-07-2021-0163
Shahzad, K., Hong, Y., Muller, A., DeSisto, M., & Rizvi, F. (2023). An Investigation of the Relationship Between Ethics-Oriented HRM Systems, Moral Attentiveness, and Deviant Workplace Behavior. Journal of Business Ethics, 192(3), 591–608. https://doi.org/10.1007/s10551-023-05513-x
Shepherd, D., & Button, M. (2019). Organizational Inhibitions to Addressing Occupational Fraud: A Theory of Differential Rationalization. Deviant Behavior, 40(8), 971–991. https://doi.org/10.1080/01639625.2018.1453009
Shonhadji, N., & Maulidi, A. (2021). The roles of whistleblowing system and fraud awareness as financial statement fraud deterrent. International Journal of Ethics and Systems, 37(3), 370–389. https://doi.org/10.1108/IJOES-09-2020-0140
Sugiharti, D. K., Muttaqin, Z., & Ramadhani, R. H. (2021). The Supervision of Village Fund Management to Prevent Corruption. Padjadjaran Jurnal Ilmu Hukum, 8(3), 356–378. https://doi.org/10.22304/pjih.v8n3.a3
Velasco, R. B., Carpanese, I., Interian, R., Paulo Neto, O. C. G., & Ribeiro, C. C. (2021). A decision support system for fraud detection in public procurement. International Transactions in Operational Research, 28(1), 27–47. https://doi.org/10.1111/itor.12811
Waters, L. M., & Wright, P. M. (2024). Hospice Fraud: Predicting Ability and Intent. Illness, Crisis & Loss, 32(3), 461–472. https://doi.org/10.1177/10541373241232483
Wolfe, D. T., & Hermanson, D. R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. The CPA Journal, 74(12), 38–42.
Yang, M., & Chen, Y. (2023). Cognitive rationalization in occupational fraud: structure exploration and scale development. Frontiers in Psychology, 14(July), 1–18. https://doi.org/10.3389/fpsyg.2023.1112127
Yaqoub, M., Hamad, S., Alhammadi, H., Elkelish, W. W., Abdalla, Y. A., & Hussain, A. (2023). Understanding Accounting Fraud Motivation, Protection Procedures, and Firms’ Performance: External Auditors’ Perspective. Corporate Governance and Organizational Behavior Review, 7(3), 19–26. https://doi.org/10.22495/cgobrv7i3p2
Yarana, C. (2023). Factors Influencing Financial Statement Fraud: An Analysis of the Fraud Diamond Theory from Evidence of Thai Listed Companies. WSEAS Transactions on Business and Economics, 20, 1659–1672. https://doi.org/10.37394/23207.2023.20.147
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Rahman Pura, Sufiati Sufiati, Eva Marin Sambo
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
