Bridging governance and technology for fraud detection: Evidence from regional development banks in Indonesia
-
Author(s)Angginun Juwita Sari HarahapLink to ORCID Index: https://orcid.org/0009-0001-1327-8883
,
ErlinaLink to ORCID Index: https://orcid.org/0000-0002-0495-8836
-
DOIhttp://dx.doi.org/10.21511/bbs.21(2).2026.03
-
Article InfoVolume 21 2026, Issue #2, pp. 36-49
- 18 Views
-
1 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Type of the article: Research Article
Abstract
Fraud remains a pervasive challenge undermining financial integrity and stability in the banking sector, particularly in developing economies. This study investigates the determinants of fraud detection effectiveness in Indonesian Regional Development Banks (RDBs), focusing on auditor competency, internal control effectiveness, risk-based internal audit, risk management processes, and information technology utilization. The study population consisted of internal auditors, managers, and audit committee members at Indonesian Regional Development Banks. Using a quantitative approach with 204 survey responses analyzed through Partial Least Squares-Structural Equation Modeling (PLS-SEM), the results show that all five factors have a significant positive effect on fraud detection (R2 = 0.554). Risk-based internal audit demonstrates the strongest influence (sig 0.000 < 0.05), followed by risk management processes (sig 0.003 < 0.05), information technology (sig 0.002 < 0.05), internal control effectiveness (sig 0.001 < 0.05), and auditor competency (sig 0.017 < 0.05). The results reveal that all five factors significantly enhance auditors’ ability to detect fraud. These findings indicate that governance mechanisms and digital capabilities jointly enhance fraud detection effectiveness in RDBs.
Acknowledgment
The authors would like to thank the Universitas Sumatera Utara, Indonesia, especially the Research Institute, for its support and the Ministry of Education and Research through the Directorate of Research, Technology, and Community Service program for providing intellectual assistance and funding for this project in the PMDSU grant (number: 83/UN5.4.10.K/PT.01.03/KP-DRTPM/2025).
- Keywords
-
JEL Classification (Paper profile tab)M15, M42, G21, G32, L86
-
References43
-
Tables3
-
Figures2
-
- Figure 1. Conceptual framework
- Figure 2. Measurement model assessment (loading factor)
-
- Table 1. Descriptive statistics variables
- Table 2. Correlation matrix between latent variable scores
- Table 3. Path coefficients hypothesis
-
- Abu Kwaik, N., Sweis, R., Allan, B., & Sweis, G. (2023). Factors Affecting Risk Management in Industrial Companies in Jordan. Administrative Sciences, 13(5), 132.
- Agustina, F., Nurkholis, & Rusydi, M. K. (2021). Auditors’ professional skepticism and fraud detection. International Journal of Research in Business and Social Science, 10(4), 275-287.
- Albawwat, A. H. (2022). The Influence of Audit Committee Characteristics on Voluntary Disclosure of Annual Financial Reports in Jordan. Universal Journal of Accounting and Finance, 10(1), 161-170.
- Alhebri, A. (2025). The moderating effect of the effectiveness of the internal audit function on the relationship between CAATS and corporate governance and the quality of financial reports in commercial banks: Evidence from the Kingdom of Saudi Arabia. Decision Science Letters, 14(1), 213-224.
- Ali, A. S., & Maelah, R. (2025). Technological innovation and sustainability of shared service: Insights from industry players. Heliyon, 11(4).
- Ali, H., & Harb, A. S. (2023). Internal Audit and Risk Management in Commercial Banks Listed on the Amman Stock Exchange in Light of the COVID-19 Pandemic. Journal of Hunan University Natural Sciences, 50(9).
- Alqudah, H., Amran, N. A., Hassan, H., Lutfi, A., Alessa, N., Alrawad, M., & Almaiah, M. A. (2023). Examining the critical factors of internal audit effectiveness from internal auditors’ perspective: Moderating role of extrinsic rewards. Heliyon, 9(10).
- Alzeban, A., & Gwilliam, D. (2014). Factors affecting the internal audit effectiveness: A survey of the Saudi public sector. Journal of International Accounting, Auditing and Taxation, 23(2), 74-86.
- Atmanegara, A. W., Erlina, Muda, I., & Adnans, A. A. (2021a). Can the Risk Management Implementation Intensify the Internal Auditor Expertise Finding Risk in Local Government? Webology, 18(Special Issue), 646-653.
- Atmanegara, A. W., Erlina, Muda, I., & Putri, D. R. (2021b). Risk Culture: An Approach to Reduce Local Government Fraud. Indian Journal of Economics and Business, 20(3), 1083-1092.
- Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17(1), 99-120.
- Bonrath, A., & Eulerich, M. (2024). Internal auditing’s role in preventing and detecting fraud: An empirical analysis. International Journal of Auditing, 28(4), 615-631.
- Chen, Y., Zhao, C., Xu, Y., Nie, C., & Zhang, Y. (2025). Deep learning in financial fraud detection: Innovations, challenges, and applications. Data Science and Management.
- Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295-336). Lawrence Erlbaum Associates.
- Cohen, J. (2013). Statistical Power Analysis for the Behavioral Sciences. Routledge.
- Erlina, Putri, D. R., Sopanah, A., & Muda, I. (2018). Model of Successful Risk Based Internal Audit Implementation in Regencies/Cities in North Sumatera. International Journal of Civil Engineering and Technology (IJCIET), 9(9), 615-627.
- Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Marketing Research, 18(1), 39-50.
- Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109, 101-110.
- Haladu, D. A. (2018). Fraud detection and internal control measures in deposit money banks listed on the NSE. International Journal of Science and Management Studies (IJSMS), 1(4), 43-54.
- Harahap, A. J. S., & Erlina. (2024). Evaluating The Impact of Risk Management and Risk-Based Internal Audit on Fraud Detection in Local Governments. Problems and Perspectives in Management, 22(3), 653-664.
- Hariyani, E., Supriono, S., Hanif, R. A., Silalahi, S. P., & Wiguna, M. (2024). Determinants influencing fraud detection: Role of internal auditors’ quality. Problems and Perspectives in Management, 22(2), 51-60.
- Jabbour, M., Cullen, J., & Crawford, J. (2025). Enterprise risk management: an institutional work perspective. Accounting Forum, 50(1), 43-71.
- Khairunnisa, H., Zairin, G. M., Amirul, S. M., Prihatni, R., & Rachman, H. (2025). Unveiling the Auditor’s Lens: Impact of Workload, Time Pressure, Professional Skepticism, and Competence to Fraud Detection. Studies in Business and Economics, 20(1), 77-96.
- Khan, F.S., Mazhar, S.S., Mazhar, K., AlSaleh, D. A., & Mazhar, A. (2025). Model-agnostic explainable artificial intelligence methods in finance: a systematic review, recent developments, limitations, challenges and future directions. Artificial Intelligence Review, 58, 232.
- Khulsum, U., Suryanto, T., Ali, J., & Wardana, H. Y. (2025). Breaking barriers in audit quality: The dynamic interactions of competence, time budget pressure, complexity, and motivation in Indonesia landscape. Social Sciences and Humanities Open, 12.
- Le, T. T., Nguyen, T. M. A., Do, V. Q., & Ngo, T. H. C. (2022). Risk-based approach and quality of independent audit using structure equation modeling – Evidence from Vietnam. European Research on Management and Business Economics, 28(3).
- Matta, J., & Chamoun, E. (2025). Exploring auditor adaptability in the digital era through levels of expertise: The role of IT literacy. Digital Business, 5(2).
- Monteiro, A. P., Vale, J., Leite, E., Lis, M., & Kurowska-Pysz, J. (2022). The impact of information systems and non-financial information on company success. International Journal of Accounting Information Systems, 45.
- Mujalli, A. (2024). Factors Affecting the Implementation of Risk-Based Internal Auditing. Journal of Risk and Financial Management, 17(5).
- Noch, M. Y., Ibrahim, M. B. Hi., Akbar, M. A., Kartim, & Sutisman, E. (2022). Independence and Competence on Audit Fraud Detection: Role of Professional Skepticism as Moderating. Jurnal Akuntansi, 26(1), 161.
- Nwaobia, A. N., Omotayo, I. I., & Ajibade, A. (2021). Internal audit and fraud detection in selected banks listed in Nigeria. Journal of Economics and Finance (IOSRJEF), 12(4), 51-65.
- Purnamasari, P., & Hartanto, R. (2022). Determinants of effectiveness of computer-assisted audit techniques in the public sector. Problems and Perspectives in Management, 20(4), 250-263.
- Putra, I., Sulistiyo, U., Diah, E., Rahayu, S., & Hidayat, S. (2022). The Influence of Internal Audit, Risk Management, Whistleblowing System and Big Data Analytics on the Financial Crime Behavior Prevention. Cogent Economics and Finance, 10(1).
- Sarens, G., & De Beelde, I. (2006). The Relationship between Internal Audit and Senior Management: A Qualitative Analysis of Expectations and Perceptions. International Journal of Auditing, 10(3), 219-241.
- Selvarajan, S., Manoharan, H., Khadidos, A. O., Khadidos, A. O., Shankar, A., Maple, C., & Singh, S. (2025). Generative artificial intelligence and adversarial network for fraud detections in current evolutional systems. Expert Systems, 42(2).
- Sihombing, R. P., Soewarno, N., & Agustia, D. (2023). The mediating effect of fraud awareness on the relationship between risk management and integrity system. Journal of Financial Crime, 30(3), 618-634.
- Silvia Dewi, N., Said, J., Nazatul Faiza, S., & Julian, L. (2024). The effect of big data competencies and tone at the top on internal auditors fraud detection effectiveness. Decision Science Letters, 13, 153-160.
- Syamsuddin, Rahmawati, Indrijawati, A., & Bandang, A. (2023). Effect of Competence, Whistleblower, and Probity Audit on the Detection of Fraud in the Procurement of Goods/Services with Emotional Intelligence as a Moderating Variable. International Journal of Professional Business Review, 8(4).
- Taherdoost, H. (2021). A review on risk management in information systems: Risk policy, control and fraud detection. Electronics (Switzerland), 10(24).
- Wahidahwati, W., & Asyik, N. F. (2022). Determinants of Auditors Ability in Fraud Detection. Cogent Business and Management, 9(1).
- Wang, P., & Liang, S. (2025). Enhancement of audit quality and optimization of risk management: Dual engines for corporate value growth analysis. International Review of Economics and Finance, 103.
- Wang, X., Wang, N., Sun, W., Xu, A., & Zhang, Z. (2024). Digital transformation and enterprise violation risk: A ‘motivation-opportunity-attitude’ framework. Heliyon, 10(20).
- Wang, Y., Wang, X., & Guo, K. (2021). Analysis on the Transmission of International Oil Price to China’s Price Index-Based on Granger Causality Network. Procedia Computer Science, 199, 1276-1283.
-
Perceived health risk, online retail ethics, and consumer behavior within online shopping during the COVID-19 pandemic
Yuniarti Fihartini ,
Arief Helmi ,
Meydia Hassan ,
Yevis Marty Oesman
doi: http://dx.doi.org/10.21511/im.17(3).2021.02
Innovative Marketing Volume 17, 2021 Issue #3 pp. 17-29 Views: 6469 Downloads: 2225 TO CITE АНОТАЦІЯThe risk of virus contracting during the COVID-19 pandemic has changed consumer preference for online shopping to meet their daily needs than shopping in brick-and-mortar stores. Online shopping presents a different environment, atmosphere, and experience. The possibility of ethical violations is higher during online than face-to-face transactions. Therefore, this study was conducted to investigate the influence of perceived health risk and customer perception of online retail ethics on consumer online shopping behavior during the COVID-19 pandemic, involving seven variables, namely perceived health risk, security, privacy, non-deception, reliability fulfillment, service recovery, and online shopping behavior. The data were collected through an online survey by employing the purposive sampling technique to a consumer who has shopped online during the COVID-19 pandemic in Indonesia. 315 valid responses were obtained and analyzed through quantitative method using SEM-Amos. The results showed that perceived health risk and four variables of online retail ethics including security, privacy, reliability fulfillment, and service recovery affected online shopping behavior. Meanwhile, non-deception was found to have an insignificant effect. The coefficient value proved perceived health risk to be more dominant in influencing online shopping behavior than the variables of online retail ethics. Thus, consumers pay more concern for their health during online shopping. However, positive consumer perceptions of the behavior of online retail websites in providing services also can encourage consumers to shop online during this pandemic.
-
Human resource management in promoting innovation and organizational performance
I Gede Riana ,
Gede Suparna ,
I Gusti Made Suwandana ,
Sebastian Kot 
,
Ismi Rajiani
doi: http://dx.doi.org/10.21511/ppm.18(1).2020.10
Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 107-118 Views: 6019 Downloads: 1447 TO CITE АНОТАЦІЯHuman resource management (HRM) is one of the elements enabling an organization to remain competitive in turbulence conditions. The effective practice of HRM makes competent and innovative employees contributing to the achievement of organizational objectives. This study aims to analyze HRM practices in creating innovation and organizational performance. The questionnaire was used to measure the respondents’ perceptions of variables used by a Likert scale. A survey of 126 manager samples and middle managers at export-oriented short and medium enterprises (SMEs) in Bali, Indonesia, was conducted to test the model. The analysis has shown that the proposed model was proven to be compliant with the research hypotheses. HRM significantly affects organizational performance and innovation, and it was found out that innovation can improve organizational performance. However, in the process of simultaneous testing, it was found out that innovation cannot improve organizational performance. The lack of attention to investments in human resources became one of the barriers to SMEs in creating innovation.
-
The risk management practices in the manufacturing SMEs in Cape Town
Problems and Perspectives in Management Volume 15, 2017 Issue #2 (cont. 2) pp. 386-403 Views: 5007 Downloads: 975 TO CITE АНОТАЦІЯRisk management is one of the prominent issues which are pivotal to the success of a business and may adversely affect profitability if not properly practised. Therefore, the main objective of this paper was to determine risk management practices in manufacturing SMEs in Cape Town. The research conducted was quantitative in nature and constituted the collection of data from 74 SME leaders, all of whom had to adhere to a list of strict delineation criteria. All data collected were thoroughly analyzed through means of descriptive statistics. From the findings made, it is clear that SMEs in the manufacturing sector do in fact understand risk management initiatives applicable to ‘manage’ their respective businesses towards sustainability, but not to a large extent. It was found that respondents are unaware of the elements which make risk management effective, which ultimately aids to the development of problems for SMEs. All employees, managers and owners must coordinate their efforts together to identify and manage organizational risks within their ambit to obtain total risk coverage, as well as provide assurance that these risks are effectively managed from a coordinated approach. Further studies may be carried out to identify measures that can be taken to improve the effectiveness of risk management practices in SMEs.
