An empirical analysis of asset misappropriation fraud during the COVID-19 crisis
-
Author(s)Darsono DarsonoLink to ORCID Index: https://orcid.org/0000-0001-5928-4149
,
Dwi RatmonoLink to ORCID Index: https://orcid.org/0000-0002-0306-5622
,
Erlinda Ramadhani Permata PutriLink to ORCID Index: https://orcid.org/0009-0006-8858-606X
,
Nur CahyonowatiLink to ORCID Index: https://orcid.org/0000-0002-5537-7097
,
Sunseok LeeLink to ORCID Index: https://orcid.org/0009-0000-2570-2437
-
DOIhttp://dx.doi.org/10.21511/ppm.22(3).2024.25
-
Article InfoVolume 22 2024, Issue #3, pp. 314-325
- 111 Views
-
19 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
The objective of this paper is to examine asset misappropriation fraud during the COVID-19 pandemic. The study examines the impact of four elements of fraud risk factors and Islamic religiosity on the propensity for fraud among employees who manage assets in government organizations. Data collection involved a questionnaire distributed to 210 employees responsible for asset management within the government organization in Indonesia. Partial least squares-structural equation modeling (PLS-SEM) was utilized as a statistical method. The test results show that the theoretical model is supported by empirical data. The study revealed that pressure, opportunity, rationalization, and capability positively influence asset misappropriation with a coefficient of 0.250, 0.134, 0.211, and 0.288, respectively. These results indicate that the higher the four fraud risks, the higher the possibility of asset misappropriation in the organization. On the other hand, Islamic religiosity exhibits a negative association with asset misappropriation with a coefficient of –0.113. These results indicate that religiosity plays an important role as a preventive factor in reducing the occurrence of asset misappropriation by employees. This study contributes to limited literature exploring factors influencing occupational fraud, specifically asset misappropriation during the COVID-19 crisis. The study recommends managerial strategies to mitigate asset misappropriation within the framework of the fraud diamond model.
- Keywords
-
JEL Classification (Paper profile tab)M41, M42, G30, G34
-
References50
-
Tables6
-
Figures2
-
- Figure 1. Research model
- Figure 2. Structural model
-
- Table 1. Respondent profile
- Table 2. Reliability and validity
- Table 3. Discriminant validity: Fornell-Larcker
- Table 4. Discriminant validity: HTMT ratio
- Table 5. Path coefficients and p-values
- Table A1. Questionnaire
-
- Abayomi, S. O. (2016). Personal ethics and fraudster motivation: The missing link in fraud triangle and fraud diamond theories. International Journal of Academic Research in Business and Social Sciences, 6(2), 159-165.
- Abdul Rahman, R., Omar, N.H., Rahman, A., & Muda, R. (2018). Islamic ethical values of corporate top leadership and real earnings management. International Journal of Law and Management, 60(3), 869-884.
- Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2015). Fraud examination (5th ed.). South-Western College.
- Association of Certified Fraud Examiners (ACFE). (2022). Occupational report 2022: A report to the nations. Austin Texas: ACFE.
- Association of Certified Fraud Examiners Chapter Indonesia. (2020). Indonesia fraud survey 2019. Jakarta: ACFE Indonesia Chapter.
- Awang, Y., Abdul Rahman, A. R., & Ismail, S. (2019). The influences of attitude, subjective norm and adherence to Islamic professional ethics on fraud intention in financial reporting. Journal of Islamic Accounting and Business Research, 10(5), 710-725.
- Baatwah, S. R., Al-Qadasi, A.A., & Al-Ebel, A.M. (2020). Religiosity at the top: does it interact with accounting expertise to limit real earnings management? Managerial Auditing Journal, 35(9), 1343-1377.
- Bentzen, J. S. (2021). In crisis, we pray: Religiosity and the COVID-19 pandemic. Journal of Economic Behavior & Organization, 192, 541-583.
- Cai, Y., Kim, Y., Li, S., & Pan, C. (2019). Tone at the top: CEOs’ religious beliefs and earnings management. Journal of Banking & Finance, 106, 195-213.
- Cheliatsidou, A., Sariannidis, N., Garefalakis, A., Azibi, J., & Kagias, P. (2023). The international fraud triangle. Journal of Money Laundering Control, 26(1), 106-132.
- Chen, H., Huang, H. H., Lobo, G. J., & Wang, C. (2016). Religiosity and the cost of debt. Journal of Banking & Finance, 70, 70-85.
- Cressey, D. R. (1953). Other people’s money: A study in the social psychology of embezzlement. New York, NY: Free Press.
- Deloitte. (2020). COVID-19 Operating in the “new normal” – A backdoor to increased fraud risk?
- Dyreng, S. D., Mayew, W. J., & Williams, C. D. (2012). Religious social norms and corporate financial reporting. Journal of Business Finance & Accounting, 39(7-8), 845-875.
- Ernst and Young. (2020). Why COVID-19 made fraud and compliance a bigger issue.
- Fariza, M. S., & Salahuddin, Y. (2015). Religiosity of Muslim adolescents from single parent families living in government-subsidized settlement. Global Journal Al Thaqafah, 5(2), 1-12.
- Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least square structural equation modeling (PLS-SEM) (3rd ed.). California: SAGE Publication, Inc.
- Halabi, H., Alshehabi, A., & Zakaria, I. (2019). Informal institutions and managers’ earnings management choices: Evidence from IFRS-adopting countries. Journal of Contemporary Accounting & Economics, 15(3), Article 100162.
- Hidajat, T. (2020). Rural banks fraud: A story from Indonesia. Journal of Financial Crime, 27(3), 933-943.
- Hilary, G., & Hui, K. W. (2009). Does religion matter in corporate decision making in America? Journal of Financial Economics, 93(3), 455-473.
- Ismail, W. A. W., Kamarudin, K. A., & Sarman, S. R. (2015). The quality of earnings in Shariah-compliant companies: Evidence from Malaysia. Journal of Islamic Accounting and Business Research, 6(1), 19-41.
- Istifadah, R. U., & Senjani, Y. P. (2020). Religiosity as the moderating effect of diamond fraud and personal ethics on fraud tendencies. Journal of Islamic Accounting and Finance Research, 2(1), 91-116.
- Jamal, A. (2003). Marketing in a multicultural world: The interplay of marketing, ethnicity and consumption. European Journal of Marketing, 37(11/12), 1599-1620.
- Kanagaretnam, K., Lobo, G. J., & Wang, C. (2015). Religiosity and earnings management: International evidence from the banking industry. Journal of Business Ethics, 132(2), 277-296.
- Kazemian, S., Said, J., Nia, E. H., & Vakilifard, H. (2019). Examining fraud risk factors on asset misappropriation: Evidence from the Iranian banking industry. Journal of Financial Crime, 26(2), 447-463.
- Kock, N. (2020). WarpPLS 7.0 User Manual. Laredo, TX: ScriptWarp Systems.
- Koomson, T. A. A., Owusu, G. M. Y., Bekoe, R. A., & Oquaye, M. (2020). Determinants of asset misappropriation at the workplace: The moderating role of perceived strength of internal controls. Journal of Financial Crime, 27(4), 1191-1211.
- Mandal, A., & Amilan, S. (2023). Fathoming fraud: Unveiling theories, investigating pathways and combating fraud. Journal of Financial Crime.
- McGuire, S. T., Omer, T. C., & Sharp, N. Y. (2012). The impact of religion on financial reporting irregularities. The Accounting Review, 87(2), 645-673.
- Mursid, A. (2024). Investigating LOHAS for Muslim customers segment: Does Islamic religiosity matter? Journal of Islamic Marketing, 15(2), 633-651.
- Nahar, H. S. (2019). Academic malaise among future Muslim accountants: Role of piety. Journal of Islamic Accounting and Business Research, 10(3), 421-447.
- Nitzl, C. (2016). The use of partial least squares structural equation modelling (PLS-SEM) in management accounting research: Directions for future theory development. Journal of Accounting Literature, 37(1), 19-35.
- Owusu, G. M. Y., Koomson, T. A. A., Alipoe, S.A., & Kani, Y.A. (2022). Examining the predictors of fraud in state-owned enterprises: An application of the fraud triangle theory. Journal of Money Laundering Control, 25(2), 427-444.
- PricewaterhouseCoopers (PwC). (2020). COVID-19: The potential of increased fraud and economic crime.
- Purnamasari, P., & Amaliah, I. (2015). Fraud prevention: Relevance to religiosity and spirituality in the workplace. Procedia – Social and Behavioral Sciences, 211, 827-835.
- Ratmono, D., & Frendy. (2022). Examining the fraud diamond theory through ethical culture variables: A study of regional development banks in Indonesia. Cogent Business & Management, 9(1), Article 2117161.
- Said, J., Alam, M. M., Ramli, M., & Rafidi, M. (2017). Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry. Journal of International Studies, 10(2), 170-184.
- Said, J., Alam, M. M., Karim, Z. A., & Johari, R. J. (2018a). Integrating religiosity into fraud triangle theory: Findings on Malaysian police officers. Journal of Criminological Research, Policy and Practice, 4(2), 111-123.
- Said, J., Omar, N., Rafidi, M., & Yusof, S. (2018b). Are organizational factors more prevailing than individual factors in mitigating employee fraud? Findings from Royal Custom Officers. Journal of Financial Crime, 25(3), 907-922.
- Salleh, M. S. (2012). Religiosity in development: A theoretical construct of an Islamic-based development. International Journal of Humanities and Social Science, 2(14), 266-274.
- Saluja, S., Aggarwal, A., & Mittal, A. (2022). Understanding the fraud theories and advancing with integrity model. Journal of Financial Crime, 29(4), 1318-1328.
- Samad, S., Kashif, M., Wijeneyake, S., & Mingione, M. (2022). Islamic religiosity and ethical intentions of Islamic bank managers: Rethinking theory of planned behaviour. Journal of Islamic Marketing, 13(11), 2421-2436.
- Smith, C., Faris, R., Denton, M. L., & Regnerus, M. (2003). Mapping American adolescent subjective religiosity and attitudes of alienation toward religion: A research report. Sociology of Religion, 64(1), 111-133.
- Stulz, R. M., & Williamson, R. (2003). Culture, openness, and finance. Journal of Financial Economics, 70(3), 313-349.
- Surya, J., & Rahajeng, D. K. (2023). The impact of chief executive officers’ religiosity on banks’ financial performance in Indonesia. Journal of Islamic Accounting and Business Research, 14(8), 1759-1817.
- Triantoro, H. D., Utami, I., & Joseph, C. (2020). Whistleblowing system, Machiavellian personality, fraud intention: An experimental study. Journal of Financial Crime, 27(1), 202-216.
- Vousinas, G. L. (2019). Advancing theory of fraud: The S.C.O.R.E. model. Journal of Financial Crime, 26(01), 372-381.
- Wells, J. (2001). Why employees commit fraud. Journal of Accountancy, 191, 89-91.
- Wijayanti, D. M., Senjani, Y. P., & Farah, W. (2024). The role of Machiavellian personality, altruistic personality, religiosity, whistleblowing system, and accounting firm size in mitigating fraud intention. Journal of Financial Crime, 31(1), 119-134.
- Wolfe, D. T., & Hermanson, D. R. (2004). The fraud diamond: Considering the four elements of fraud. The CPA Journal, 74(12), 38-42.
-
The impact of social distancing policy on small and medium-sized enterprises (SMEs) in Indonesia
Muhtar Lutfi ,
Pricylia Chintya Dewi Buntuang ,
Yoberth Kornelius ,
Erdiyansyah ,
Bakri Hasanuddin
doi: http://dx.doi.org/10.21511/ppm.18(3).2020.40
Problems and Perspectives in Management Volume 18, 2020 Issue #3 pp. 492-503 Views: 3616 Downloads: 1309 TO CITE АНОТАЦІЯThis study aims to investigate the impact of social distancing policies on SMEs in Indonesia. It used a quantitative method with a survey design. Respondents were all SMEs in Indonesia that are affected by social distancing policies during the COVID-19 pandemic. It involved a total of 587 SME samples selected randomly. The data were collected through observations, questionnaires, and literature studies. The collected data were analyzed using descriptive statistics with SPSS software to determine the mean value. The result showed that social distancing policies affect SMEs during the COVID-19 pandemic. This is indicated by the decreasing income and demand for SMEs products, and even some have no income (mean values of 2.40) due to the social distancing policies. Besides, the policy’s impact is also shown in the increasing cost of raw materials and production costs due to supply chain problems (mean values of 4.79). The policy’s impact raises anxiety for SMEs to survive so that business actors change their plans by utilizing information technology (mean values of 4.81). This change is a strategy to survive due to the impact of the applied policies. Although social distancing policies affect SMEs’ survival during the pandemic, research findings show that SMEs in Indonesia did not terminate employment (mean values of 4.37) due to the presence of economic stimulus policies that helped SMEs survive and grow during the COVID-19 pandemic.
-
The impact of the COVID-19 pandemic on retailer performance: empirical evidence from India
Amgad S.D. Khaled ,
Nabil Mohamed Alabsy ,
Eissa A. Al-Homaidi ,
Abdulmalek M.M. Saeed
doi: http://dx.doi.org/10.21511/im.16(4).2020.11
Innovative Marketing Volume 16, 2020 Issue #4 pp. 129-138 Views: 3341 Downloads: 5826 TO CITE АНОТАЦІЯThe study aims to synthesize the challenges that retailers are facing during the COVID-19 emergency. The research is definitive, informative, and based on a single design of cross-sectional research. Quantitative data based on the research instrument were produced (a questionnaire). Five hundred responses were collected from employees of major retail stores in India. Retailer performance is considered a dependent variable, whereas employee well-being, customer and brand protection, use of technology, government policies, and supply chain are used as independent variables. The current study results indicated that employee well-being and government policies have a significant positive impact on retailer performance, while customer and brand protection, use of technology, and supply chain have a significant positive impact on retailers’ performance. This study will help retailers develop strategies for their employees to protect them and understand that technology is needed in the new normal times. This study highlights the need to be flexible in executing strategic strategies, but retailers need to develop comprehensive action plans, including selecting managers of initiative and defining goals and deadlines. Provided that retailers’ current reality is different from the old normal, no time is lost in taking audacious action.
-
The impact of quarantine due to COVID-19 pandemic on the tourism industry in Lviv (Ukraine)
Mykhailo Rutynskyi ,
Halyna Kushniruk
doi: http://dx.doi.org/10.21511/ppm.18(2).2020.17
Problems and Perspectives in Management Volume 18, 2020 Issue #2 pp. 194-205 Views: 2935 Downloads: 1180 TO CITE АНОТАЦІЯThe global crisis caused by COVID-19 pandemic and the introduction of long-term international quarantine measures have had a very negative impact on the tourism industry. The paper aims to analyze the sectoral losses of the tourism industry during quarantine due to the COVID-19 pandemic in Lviv, a city whose historical center is included in the UNESCO World Heritage Site. The article highlights the potential of the tourism industry before the introduction of quarantine measures, as well as using extrapolation methods estimates the economic losses of the tourist industry of Lviv in the conditions of long-term quarantine. Besides, the anti-crisis measures of the city authorities to minimize the impact of quarantine due to COVID-19 pandemic on the tourism industry of Lviv are described. Based on a statistical analysis of the forecasted economic losses, it is recommended that city authorities abolish some local taxes and fees in the tourism sector to restore its potential as soon as possible.
