THE INFLUENCE OF SHARIA COMPLIANCE AND ISLAMIC CORPORATE GOVERNANCE ON FRAUD IN ISLAMIC BANKS IN INDONESIA

Abstract

This study aims to examine the Influence of Sharia Compliance and Islamic Corporate Governance on fraud on Islamic banks in Indonesia. The independent variable that was mummified was sharia compliance with Islamic Income Ratio (IsIR), Profit Sharing Ratio (PSR), Islamic Investment Ratio (IIR), and Islamic Corporate Governance. The dependent variable used is fraud that occurs in Islamic commercial banks in Indonesia. The research method used in this study is the method of library research. The type of data used is secondary data in the form of financial statement data and annual GCG implementation reports for the period of 2014 to 2018. The population in this study were all Sharia Commercial Banks (BUS) registered at Bank Indonesia in the period 2014 to 2018. The sample was selected using the purposive sampling method. The total sample used in this study amounted to 11 Islamic Commercial Banks with a study period of 5 years. The analytical method used in this study is multiple regression processed using SPSS version 23. The results of this study indicate that the variable sharia compliance as a proxy Islamic Income Ratio (ISIR), Profit Sharing Ratio (PSR), Islamic Investment Ratio (IIR), have a negative effect on Islamic bank’s fraud while Islamic corporate governance had no effect on fraud in Islamic banks in Indonesia.