Determinant of fraudulent behavior in the Indonesian rural bank sector using the fraud hexagon perspective
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DOIhttp://dx.doi.org/10.21511/bbs.18(4).2023.16
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Article InfoVolume 18 2023, Issue #4, pp. 181-194
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Asia Pacific is the region with the highest number of losses in the world. While Indonesia ranks fourth in the number of frauds, it has the highest increase in frauds based on the CPI index. This study aims to examine employee fraud triggered by the six components of the fraud hexagon. This study tries to develop the hexagon fraud element by adding power distance elements and using ethical values as a moderating variable. This study conducted a survey of 351 respondents. Using a purposive sampling method, the heads of funds, heads of credit, heads of treasurers and heads of accountants were selected as respondents in 128 rural banks in Bali. PLS displays an adjusted R2 value of 0.331. Not all elements of the fraud hexagon are proven to influence fraud. Only pressure, opportunity, rationalization, and ego affect employees in committing fraud. Meanwhile, power distance as an additional element of the fraud hexagon can increase fraud. Ethical values can become an anti-fraud strategy in reducing employee pressure and ego in committing fraud. The results of this study will provide input for rural bank managers to anticipate factors that increase employee fraud and increase the role of ethical values in suppressing employees’ desire to commit fraud.
- Keywords
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JEL Classification (Paper profile tab)M48, G32, G34
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References48
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Tables6
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Figures1
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- Figure 1. Research model
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- Table 1. Respondent characteristics
- Table 2. Dimensions and scales
- Table 3. Discriminant validity with Heterotrait-Monotrait Ratio (HTMT)
- Table 4. Descriptive statistics and instrument testing
- Table 5. Hypothesis testing
- Table 6. Finite mixture (Fimix) segmentation
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