Sri Sundari

Fraud is rampant in Indonesia, especially in the public sector, including regional governments. Fraud cases have touched both the central and the lowest levels in the villages, which ensnare many people in the village. This study aims to analyze the influence of the village financial system (Siskeudes application), transparency, and internal control on fraud prevention in village governance in Pinrang District, South Sulawesi Province, Indonesia. The sample includes village heads, treasurers, and village representative bodies, and it has a total of 51 people. The primary data are obtained from questionnaires using a quantitative approach and a multiple linear regression with the Statistical Product and Service Solution (SPSS) application. The research results show that the coefficient of determination (R2) is 0.657. Thus, the magnitude of the influence of village financial system, transparency, and internal government control on fraud prevention amounts to 65.7%. The results of the study show that the village financial system has a significant positive effect on fraud prevention (p-value = 0.025 < 0.05), transparency has a significant positive effect on fraud prevention (p-value = 0.031 < 0.05), and internal control has a significant positive effect on fraud prevention (p-value = 0.035 < 0.05).

Indonesia’s mining sector was ranked as the third most vulnerable to fraud according to the Association of Certified Fraud Examiners (ACFE) survey in 2019. The advent of the COVID-19 pandemic further contributed to a 26.6% decline in sector investment in 2020 due to widespread project cancellations. Thus, this study analyzes fraudulent financial reporting and firm value from the perspective of fraud hexagon and firm size focusing on the mining sector industry in Indonesia. The panel data regression analysis was used to analyze data collected from the annual reports of mining companies in Indonesia from 2020 to 2022. The findings indicate that management pressure proxied by financial targets and measured through Return on Assets (ROA) has an effect on fraudulent financial reporting (FFR), as measured by F-Score. In addition, opportunities proxied by nature of industry affect FFR negatively. FFR also affects the value of a company as proxied by Tobin’s Q ratio. These results suggest that mining companies should set financial targets cautiously to avoid excessive pressure on management and uphold strong governance and control systems. Moreover, this study highlights the importance of raising awareness of fraudulent financial reporting, given its potentially adverse effects on a company’s going concern.