Abstract
This study aims to examine the mediating effect of affective and normative commitments in the relationship between ethical leadership, religiosity, and fraud in Indonesia government institutions. Using the cluster sampling method, data was collected through surveys with respondents were employees of government agencies in Indonesia. The survey obtained 111 responses and the data were analyzed using path analysis. The findings revealed that ethical leadership and intrinsic religiosity have a direct negative effect on employees’ legal fraud engagement. However, only ethical leadership that indirectly and negatively affects employees’ legal fraud through affective commitment. The normative commitment does not mediate the effect of intrinsic religiosity to legal fraud engagement. Hence, this study provides evidence on the importance of the control environment as well as the presence of ethical leaders in government institutions.
Highlights
Fraud mitigation has become a crucial issue occurrence, public demands for better internal control, and citizens’ dissatisfaction with the scale both in private and public sector organizations
This study evaluates the impact of intrinsic religiosity to individual fraud because individuals with high intrinsic religiosity are more willing to use their beliefs as guide guidance to make day-to-day decision making and behavior (King & Crowther, 2004)
To ascertain whether the participants understand about ethical leadership in the institution they work at, they need to indicate how long they have worked in their current institution
Summary
Fraud mitigation has become a crucial issue occurrence, public demands for better internal control, and citizens’ dissatisfaction with the scale both in private and public sector organizations. Governments have increased their efforts to mitigate fraud risks due to the rise of fraud of loss caused by frauds (Savovska, Vatyan, Danescu, & Crnkovic, 2017). Around 60% of the total individuals who perpetrated white-collar crime were exposed by KPK (see Table 1). Two members of the Indonesian House of Representatives (DPR) were arrested for committing the same crime in March and August 2019 (Rachman, 2019; Rozie, 2019)
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