An empirical analysis of asset misappropriation fraud during the COVID-19 crisis

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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.

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    • 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
    • Conceptualization
      Darsono Darsono, Dwi Ratmono, Nur Cahyonowati, Sunseok Lee
    • Data curation
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Formal Analysis
      Darsono Darsono, Dwi Ratmono, Nur Cahyonowati, Sunseok Lee
    • Funding acquisition
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati
    • Investigation
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Methodology
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati
    • Project administration
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Sunseok Lee
    • Resources
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Software
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Supervision
      Darsono Darsono, Dwi Ratmono, Nur Cahyonowati
    • Validation
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Visualization
      Darsono Darsono, Dwi Ratmono, Nur Cahyonowati, Sunseok Lee
    • Writing – original draft
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee
    • Writing – review & editing
      Darsono Darsono, Dwi Ratmono, Erlinda Ramadhani Permata Putri, Nur Cahyonowati, Sunseok Lee