Analysis of Factors Influences Fraudulent Tendencies in Denpasar Rural Credit Institutions

Ida Ayu Budhananda Munidewi,Ni Nyoman Ayu Suryandari,I Made Yuda Suryawan

doi:10.32535/ijabim.v4i3.682

Abstract

Accounting fraud often occurs and increases in several countries and organizations. The deviant action in financial statements is one of the accounting fraudulent actions. The impact and consequences of accounting fraud cannot be avoided and microfinance institution will suffer losses due to this action. This study aims to examine and obtain empirical evidence of the effectivity of internal control effectiveness, information asymmetry, compliance with accounting rules and management morality towards accounting fraudulent tendencies in Rural Credit Institutions (LPD) in Denpasar City. Data is obtained by giving questionnaires to the leadership and accounting staff at the Rural Credit Institution (LPD) in Denpasar City. Determination of the sample using purposive sampling method. The sample in this study were 70 respondents. The analytical tool used is multiple linear regression analysis. The data obtained were analyzed using the Statistical Package for Science (SPSS) program. The results showed that the effectiveness of internal control and management morality had a negative effect on accounting fraud tendencies. While information asymmetry and compliance with accounting rules do not affect the tendency of accounting fraud.

Highlights

1.1 BackgroundFinancial statements are the end of the accounting process designed to provide information to potential investors, prospective creditors, report users for business decision making
The results in this study are in line with the results of research conducted by Wirani (2016), Agustini (2015), Darmawan (2016), Downida (2017), Lestari (2017) and Najahningrum (2013) which states that effectiveness of internal control has a negative effect on trends accounting fraud
Wolk and Tearney (1997) explained that failure to compile financial statements due to disobedience to accounting rules, would cause corporate fraud that cannot be detected by auditors

Summary

Introduction

Financial statements are the end of the accounting process designed to provide information to potential investors, prospective creditors, report users for business decision making. Financial statements are one of the most important information to make a decision to invest their shares. According to Kusumastuti (2012) in reality there are still deviations in the financial statements of a company, so that the information in the financial statements becomes irrelevant and unreliable. This deviation in the financial statements is one of the accounting fraudulent actions. The actions taken can be in the form of elimination of amounts or disclosures in financial statements to fool the users of financial statements

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Conclusion