THE EFFECT OF INDIVIDUAL MORALITY AND INTERNAL CONTROL ON THE PROPENSITY TO COMMIT FRAUD: EVIDENCE FROM LOCAL GOVERNMENTS

https://doi.org/10.22146/jieb.15291

Novita Puspasari(1*), Eko Suwardi(2)

(1) Universitas Jenderal Soedirman
(2) Universitas Gadjah Mada
(*) Corresponding Author

Abstract


This paper aims to examine the influence of individual morality and internal controls on individuals’ propensity to commit accounting fraud at the local government level. This is a quasi- experimental research paper. Individual morality and internal controls are hypothesized to be having an interaction with each other in influencing the propensity to commit accounting fraud. Individuals who have low levels of moral principles are hypothesized to have the tendency to commit accounting fraud in the absence of any internal controls. To test this, a 2x2 factorial experiment was conducted involving 57 students from the Masters in Economics Development programme at Gadjah Mada University. The result shows that there is an interaction between individual morality and internal controls. The absence of internal controls does not cause an individual with high moral principles to commit accounting fraud. However, individuals with low morality levels tend to commit accounting fraud when internal controls are absent.

Keywords: Accounting Fraud, Morality, Internal Controls, Local Government


Keywords


Accounting Fraud, Morality, Internal Controls, Local Government

Full Text:

PDF



DOI: https://doi.org/10.22146/jieb.15291

Article Metrics

Abstract views : 3139 | views : 3485

Refbacks

  • There are currently no refbacks.




Copyright (c) 2016 Journal of Indonesian Economy and Business



Journal of Indonesian Economy and Business

Journal

Editorial Team
Focus and Scope
Peer Review Process
Publication Ethics
Screening for Plagiarism

Authors

Author Guidelines
Submission Guidelines
Online Submissions
Copyright Notice
Privacy Statement
Author Fees

Download

Author Pack
Submission Form & Manuscript Template

 

Reviewer

Reviewer Guidelines
Reviewer Acknowledgement

 

Reader

General Search
Achieves
Author index
Title index

 

 

The Journal of Indonesian Economy and Business (print ISSN 2085-8272; online ISSN 2338-5847) is published by the Faculty of Economics and Business Universitas Gadjah Mada, Indonesia. The content of this website is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License

© 2019 Journal of Indonesian Economy and Business 
 Visitor Statistics