Fraud Control Research Articles

Mitigating Financial Fraud in Indonesia: A Grounded Theory Approach to Fraud Detection in P2P Lending, Rural Banks, and Conventional Banks

The rapid digitalization of Indonesia’s financial sector, driven by the growth of Peer-to-Peer Lending (P2PL) platforms, Rural Credit Banks (BPR), and conventional banks, has expanded financial inclusion but also heightened the risk of fraud. This study investigates the fraud detection systems (FDS) employed by these diverse financial institutions using a grounded theory approach. By conducting semi-structured interviews with key stakeholders—including directors, compliance managers, and fraud control officers—the research identifies critical factors influencing fraud detection in Indonesia’s financial ecosystem. The study reveals that while larger institutions leverage advanced machine learning models and real-time transaction monitoring, smaller entities like BPRs rely heavily on manual oversight due to resource constraints. Furthermore, the integration of multi-subject perception differences is highlighted as a novel and effective approach for fraud detection, particularly in P2PL platforms, by analyzing multiple data sources to reduce bias and increase accuracy. However, the study also uncovers significant challenges in implementing robust FDS, including high false-positive rates, regulatory complexities, and resource limitations, particularly in smaller institutions. The findings emphasize the need for a tailored fraud detection framework that addresses the unique needs of each sector, balancing technological advancements with operational feasibility.

Leveraging AI Algorithms to Combat Financial Fraud in the United States Healthcare Sector

Financial fraud is a major problem in the healthcare industry because it causes large financial losses and compromises the integrity and trust of healthcare systems. The intricacy and sophistication of contemporary fraudulent operations make conventional fraud detection techniques which rely on manual audits and rule-based systems increasingly inadequate. AI algorithms have become a viable way to improve financial fraud detection and prevention. Hence, this paper examines how AI algorithms can be used to detect and stop fraud in the healthcare industry, emphasizing how these algorithms could revolutionize fraud control procedures. This study suggests that AI algorithms greatly improve the identification of financial fraud in the healthcare industry by spotting intricate patterns and abnormalities frequently overlooked by already existing techniques. Machine learning models have proven to be highly accurate in predicting fraudulent claims and transactions. However, while AI provides numerous opportunities to improve fraud detection skills, its effective application necessitates resolving important issues, including ethical considerations, data governance, and model interpretability.

Strengthening Fraud Control Plan For Investigative Audit And Probity Audit In Fraud Detection

The high number of corruption cases in local governments in Indonesia demands increased government attention to fraud cases. Opportunity for fraud can start from the planning stage to follow-up so that appropriate preventive and repressive handling efforts are needed. The Financial and Development Supervisory Agency has developed a fraud control plan and probity audit guidelines that are expected to be a solution to eradicate fraud in local governments. This study aims to analyse the effect of implementing investigative and probity audits on strengthening the fraud control plan in detecting fraud by auditors of the Financial and Development Supervision Agency of South Sulawesi and West Sulawesi. This study used quantitative with multiple linear analysis with Smart PLS 3.0 Software. Results found that investigative and probity audits positively affect fraud detection. Meanwhile, the fraud control plan does not strengthen the relationship between investigative and probity audits to fraud detection.

Strategic Management Practices on Revenue Growth of Selected Lake Region Economic Bloc Counties in Kenya

The purpose of this study was to find out the effects of strategic management practices on revenue growth of Selected Lake Region economic bloc counties in Kenya. Specific objectives were; to evaluate the effects of fraud control strategy; and to assess the effects of monitoring and tracking strategy on revenue growth in county governments in Kenya. The target population for the study was 331 employees involved in revenue collection. A stratified sampling technique was used to identify a sample size of 259 respondents. Primary data was collected using closed ended structured questionnaire. Collected data was edited and coded then analyzed using descriptive statistic methods; means, percentages and standard deviations. Pearson Product Moment Correlation was used to establish the strength of relationship while simple linear regression was used to establish the effect of independent variable on the dependent variable and data was presented in tables and figures. From the findings the study made the following conclusions; employees were trained on how to detect system fraudsters and performance targets were being monitored and tracked on a daily basis. Correlation analysis concluded that fraud control had a positive and significant relationship with monitoring and tracking and revenue growth. Regression analysis concluded that an increase in one unit of fraud controlled to a decrease in revenue growth and the effect was statistically significant. An increase in one unit of monitoring and tracking led increase in revenue growth and the effects was found to be statistically significant. The study recommended that revenue targets to be set in a way that they can be monitored and tracked easily in the system also the study recommended that hiring and transfers should be done based on merits.

A typology framework for unethical medical practices under public health insurance schemes in India: Analysis of evidence over the past 12 years.

Unethical provider practices in public healthcare schemes adversely impact beneficiaries' health, result in the loss of public funds, and also bring disrepute to the schemes. There is extensive literature on the typologies of unethical practices in healthcare in developed countries. This study aims to develop a typology framework which is applicable in the Indian context. In this study, 25 media reports and research studies were analysed on unethical provider practices under public health insurance schemes in India over the past 12 years from 2010 to 2022. The reports were collated from de-empanelment orders issued by state health authorities against various erring entities, and research studies conducted on the abuse of these schemes. Based on the analysis and classification of the cases reported, an "Unethical Provider Practices" typology for healthcare fraud has been defined. Additional fraud typologies are found to be prevalent in India in addition to those captured by existing frameworks. These include patient harm, ID theft of beneficiary data to create cards for non-beneficiaries, and collusion between providers and different entities. Fraud control mechanisms leveraging technology such as AI-enabled digital apps for medical audits, biometric technology at the point of care and rigourous checks of ID documents before beneficiary cards are issued as well as having more specific legal provisions in place for healthcare fraud will enable enhanced prevention, detection and deterrence of healthcare fraud.

Integrating fraud hexagon into fraud control system: a study of Indonesia

The fraud control system is an assessment of the risk of irregularities which is a proactive process that aims to identify and overcome organizational vulnerabilities due to conditions carried out by internal and external parties to the organization. The purpose of this research is to determine the effectiveness of the newly formed Fraud Control System regulations with the integration of Fraud Hexagon to formulate effective fraud prevention and detection procedures. This study is based on empirical literature collected and interpreted from the Fraud Control System and Fraud Hexagon to formulate effective fraud prevention and detection procedures at BPKP and KemenPAN RB. The result is that BPKP and KemenPAN RB must start a joint assessment rather than working separately, because the two anti-fraud frameworks complement each other, so they must be assessed coherently to allow for a check and balance mechanism. BPKP and KemenPAN RB must also design a fraud prevention and detection framework at the national level so that the assessment also includes top level leadership. It is hoped that the implications of the research can help Indonesia to perfect a more holistic fraud control mechanism so that the effectiveness of the Fraud Control System is even better.

Characteristics and Skills of Forensic Accountants for Effective Financial Fraud Control in Nigeria

The study examined forensic accountants’ relevant characteristics and financial fraud control and investigated the extent to which traits, characteristics, core skills, and enhanced skills of forensic accountants are effective in fraud control. The study adopted the survey method and placed emphasis on the public and private sectors in Delta and Edo states in the south-south of Nigeria, where potential forensic accountants, academics, and users of forensic accounting services were considered respondents through a well-structured questionnaire. A total of 250 copies of the questionnaire were distributed to these respondents, while 214 copies were successfully retrieved. The successfully retrieved questionnaire was also subjected to a pre-test using Cronbach-Alpha test. The collected data were tested and analyzed using ordinary least squares (OLS) regression, correlation matrix, descriptive statistics, and tables. Based on the outcome of the test and analysis, the traits, core, and enhanced skills of forensic accountants have a significant positive effect on financial fraud control. These traits and core and enhanced skills include analytical proficiency, detail orientation, deductive analysis, strategic thinking, analyzing and interpreting financial statement information, interviewing skills. We recommended among others, that the government approve the practice of forensic accounting in Nigeria to aid government agencies in fighting fraud.

Peran Auditor Internal Dalam Pencegahan Kecurangan (Fraud) Pada Perguruan Tinggi Di Pekanbaru

This study aims to analyze the possible role of internal auditors in preventing fraud at universities in Pekanbaru. The object of this research are several universities in Pekanbaru. This type of research is qualitative research, the data collection of this research is done by interviews, observation, and documentation. The results of this study indicate that the role of the auditor is very important for fraud prevention and fraud control in university institutions, by going through several stages of internal audit procedurally. To prevent risks or losses, the internal auditors carry out the stages of tracing or identifying a fraud before the fraud actually occurs. So that these stages can be carried out effectively and efficiently. Keywords: The Role of Internal Auditors, Fraud, Universities.

ANALYSIS OF THE IMPLEMENTATION OF THE WHISTLEBLOWING SYSTEM IN THE KENDARI CITY GOVERNMENT

The whistleblowing system is becoming an increasingly utilized tool worldwide to prevent and detect current violations. However, its implementation is not easy, as individuals require a sense of security and safety guarantees to be willing to participate in preventing violations and corruption. Therefore, adequate structures and processes are needed for its implementation. Kendari City is the only local government in the Southeast Sulawesi Province region that has implemented a whistleblowing system in its administration. This research aims to analyze the structure, mechanisms, and procedures of the whistleblowing system that has been implemented using best practices established by the Deputy of Investigation at the Financial and Development Supervisory Agency. The research employs a qualitative approach, utilizing document studies, observations, and interviews with individuals involved or directly engaged in implementing the whistleblowing system in the Kendari City government. The results indicate that the whistleblowing system implementation’s structure, mechanisms, and procedures have adhered to best practices in policy and institutional aspects as per the Technical Guidance Guidelines for the Implementation of the Thematic Fraud Control Plan System and Internal Whistleblowing Behavior.

Does Forensic Accounting Matter? Diagnosing Fraud Using the Internal Control System and Big Data on Audit Institutions in Indonesia

This study aims to determine the relationship between awareness of the use of forensic accounting and the role of the internal control system (COSO) mediated by Big Data Analysis (BDA) towards interest in using forensic accounting in detecting fraud. The research design is a case study with a quantitative approach. The sample for this study was 331 auditor respondents spread across KAP, BPK and BPKP in Indonesia. The data used is primary data with research methods through interviews and surveys at the Indonesian auditor institutions. The weakness of companies is that on average they still use data systems that are not integrated, so there are risks in terms of data security. The results of this study prove that Big Data Analysis mediates the relationship between Awareness of Forensic Accounting on Intentions of Forensic Accounting. Also, Big Data Analysis mediates the relationship between COSO on Intentions of Forensic Accounting. The results show that the seventh hypothesis proposed is statistically proven. This study proves that the implementation of a good internal control system will be an effective tool to control fraud risk. Internal controls can be fully effective if the organization is able to understand the most vulnerable risks and how to respond to fraud. BDA with data mining techniques that contribute to decision-making and fraud detection. Auditors can find and extract hidden patterns in large amounts of data by using Big Data to detect fraud.

DETERMINANT OF ACCOUNTING FRAUD CONTROL

This study aims to determine the effect of internal audit, good government governance and whistleblowing system on accounting fraud control in the Sekretariat Dana Bagi Hasil Cukai Hasil Tembakau Situbondo. The population of this study were all employees totaling 52 people. The sampling technique used in this study was a saturated sample, so that a sample of 52 people was obtained. The data collection method used in this study was the distribution of questionnaires. The data analysis methods used are validity and reliability tests, classical assumption tests, hypothesis testing and multiple linear regression analysis. The results of this study indicate that internal audit, good government governance and the whistleblowing system simultaneously affect accounting fraud control in the Sekretariat Dana Bagi Hasil Cukai Hasil Tembakau Situbondo. Partially, the whistleblowing system affects accounting fraud control. Meanwhile, internal audit and good government governance have no partial effect on accounting fraud control at the Sekretariat Dana Bagi Hasil Cukai Hasil Tembakau Situbondo.

An Evaluation of the Implementation of the Treasury Single Account System in Zambia: A Case Study of Selected Government Ministries

The study sought to empirically evaluate the implementation of the Treasury Single Account System in Zambia. The study employed an exploratory research design and utilised the purposive sampling method. The findings revealed that the TSA has resulted in better management of government cash resources. However, despite being effective in the implementation of the TSA the findings show that it has its challenges. The findings have shown that the TSA has been consistent with international best practices. It can be concluded that the TSA has to overcome the shortcomings cited to become more effective in its operation in Zambia. The study recommended that the Government should continue to operate with the principles of TSA because of the positive influence it has on the effectiveness of public finance management in areas of fraud control, accurate accounting, budgetary control, effective cash management and the coverage of the TSA be extended, with the necessary modifications, to cover the local government for effective and efficient management of public finance especially in the areas of fraud control, accurate accounting, budgetary control and cash management.

ENHANCING COLLABORATION FROM ADULT PROTECTIVE SERVICES TO PROVIDERS WORKING WITH MISTREATMENT VICTIMS/SURVIVORS

Abstract Adult Protective Services (APS) is the frontline agency that receives, investigates, and provides services and/or referrals to victims/survivors of adult abuse, neglect, and exploitation. However, APS cannot resolve adult mistreatment alone, and must collaborate with healthcare, social, legal, and other community-based providers to address the needs of victims/survivors. Partnering with Montana APS and healthcare, legal, social and aging services providers, AARP, American Indian Health, local law enforcement, judge, attorneys, Medicaid Fraud Control Unit, ombudsman, and Certification and Licensing Bureaus, our goal is to examine how state agencies can work together to reduce mistreatment and systems burden. Twenty-two interviews were conducted with state agencies to inquire about collaboration challenges and strategies, what has worked well with APS, and what can be improved. Thematic analysis was used to characterize barriers and solutions for collaboration, and social network analysis was used to map out the collaboration network. We found that information sharing is a boon for collaboration among agencies using integrated information systems, but becomes a barrier when information sharing is limited by statute. State agencies also identified other agencies they have worked with to address mistreatment and reflected on challenges and strategies in working with these other professionals. Challenges for state agencies to work together center around lack of funding and service shortages, especially during the pandemic. Strategies to improve collaboration involve agency cross-training to remove silos. These interviews offer rich insight to guide practitioners across agencies to work together at the state-level to reduce mistreatment and its recurrence.

THE EFFECT OF FORENSIC ACCOUNTING ON BANK PERFORMANCE

This study investigated the effects of forensic accounting on bank performance in Nigeria using four (4) measures of forensic accounting (money laundering fraud control, point of sales, money transfer fraud and automated teller machine fraud control) and one (1) performance measure (return on asset). Data were obtained from the annual reports and accounts of the banks and Central Bank of Nigeria Statistical Bulletin from 2012-2020. Data obtained were analyzed using descriptive statistics (mean, standard deviation, skewness, kurtosis and correlation) and inferential statistics (variance inflation factor and ordinary least square). Findings of the study showed that all the forensic accounting measures of the study (money laundering fraud, point of sales, money transfer fraud and automated teller machine fraud controls) negatively and significantly affected performance of banks in Nigeria. Based on the findings, it was recommended among others that bank management should employ forensic accounting by amending the existing statutes in such a way that forensic accountants are included in the management process. Through this, forensic accountants will have more tools to effectively deal with challenges in fraud control. Also, the negative relationship between forensic accounting and performance of banks suggests that it has not been effectively used by management; thus, there is need for Nigerian banks to further enhance and employ forensic accounting support services, fraud investigation and forensic audit by ensuring that they achieve what they intend to do for banks
 Keywords: Forensic Accounting, Bank, Performance, Nigeria.

Forensic Accounting and Fraud Control in Auditing Firms in Kigali, Rwanda

The primary goal of this study was to determine how forensic accounting contributes to fraud prevention and control within the Auditing Firms in Kigali, Rwanda. More specifically, the stud y sought to examine how internal controls, knowledge of forensic accounting and skills and management tools influence fraud control in Auditing Firms in Kigali, Rwanda. The study was anchored on Fraud Triangle Theory and Fraud Diamond Model. Descriptive research design was adopted to help determine patterns and trends in order to make conclusions from the data collected. The target population for this study was a total of 76 staff members thereby employing a census approach. The researcher was collected by primary data by use of closed-ended questionnaires to the respondents. For these, the study used simple random sampling to select all the respondents. Primary data was collected by use of closed-ended questionnaires to the respondents. Secondary data was collected using data collection sheet. Secondary Data involved the use of financial reports, regulatory documents, and academic literature will be reviewed to gain insights into the prevailing financial fraud trends in Rwanda. Validity and reliability were tested to ensure the sanctity of the research tool and thus facilitate piloting which was done to selected auditing firms Rusumo. Data analysis was conducting using both descriptive (Frequencies, mean, standard deviation) and inferential (regression and correlation) statistical methods using the Statistical Package for Social Sciences (SPSS version24). Keywords: Forensic Accounting, Fraud Prevention, Auditing Firms, Internal Controls, Kigali, Rwanda

Consumers’ perceptions of food fraud in selected Southeast Asian countries: a cross sectional study

Southeast Asia is projected to be the fourth largest economy in 2050, where agriculture and food are key sectors contributing to the regional’s GDP. However, ensuring food safety and traceability remains a challenge in the region and this offers ripe opportunity for fraudsters to take advantage of the system. This study aims to provide an overview of consumers’ concern about food fraud in selected countries in Southeast Asia. A cross-sectional online survey was implemented in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, yielding 1393 valid responses. Multiple Correspondence Analysis (MCA) was conducted first to reduce the large dataset containing nominal variables. After that, ordered logistic regression was performed to predict food fraud concern, with independent variables being dimensions derived from MCA, total knowledge and experience, and demographic characteristics. We found that respondents from Vietnam and Malaysia were significantly more worried about food fraud compared to other countries. Concerns about food fraud were influenced by increased demand for food fraud control, perceived risks of different types of food fraud, information sources from media and personal networks, information sources from credible organisations, and self-experience of food fraud. Practical and policy recommendations for the region were suggested. This is the first empirical study on consumers’ concern about food fraud in Southeast Asia. The study embodies the UK Global Food Security and UN Sustainable Development Goal No. 2 ethos of providing the growing global population with access to safe food.

Internet Payment System, Forensic Accounting and Forensic Investigation: 3M Theory in the Financial Frauds

In view of the rapid development in internet payment system and information and communication technology (ICT) that is changing banks mode of payment operations and bringing innovations to banking transactions, and even the method fraudsters operate as well as the likely effects of their activities on the banks and customers if not tackled, t h i s e x p l o r a t o r y p a p e r e x p l o r e s f orensic accounting, forensic investigation, digital environment, 3M (Manipulation, Misrepresentation, Misapplication) Theory in the Financial Frauds, electronic payment risk management, data mining technique, data matching technique and network security management in internet payment system within banking infrastructures. The paper highlights how forensic accounting and investigation can be employed to resolve the problem of internet and electronic payment fraud and crimes. It is recommended that investigative accounting that will comprehensively entails ICT-related fraud investigation, prevention of fraud and analyzing antifraud ICT-controls in addition to gathering non-financial and financial information should be intensified with modern technology within the banking security infrastructure. There should be fraud control software for financial frauds in digital environment. In today's world where technology has reached a different dimension, sophisticated cases in today's internet banking businesses cannot be revealed by traditional methods and the need for fraud control software against possible negative cases in information environment should be fulfilled in order to eliminate this complexity.

Fingerprinting of quinoa grain protein extracts by liquid chromatography with spectrophotometric detection for chemometrics discrimination

Quinoa (Chenopodium quinoa Willd.) grain is gaining great popularity worldwide because it is a rich source of nutrients, bioactive compounds, complete essential amino acids, and high-quality proteins. The demand for quinoa-based products is on the rise, which makes them prone to adulteration with less expensive cereals. In this study, we described a rapid and simple procedure for fingerprinting of quinoa grain protein extracts based on the combination of liquid chromatography with ultraviolet absorption diode array detection (LC-UV-DAD) and chemometrics. First, we developed a novel LC-UV-DAD method to obtain distinctive multiwavelength chromatographic profiles of protein extracts from various commercial quinoa grains, which encompass different quinoa varieties sold as black, red, white (from Peru), and royal (white from Bolivia). Then, the components of the LC-UV-DAD fingerprints were deconvoluted by multivariate curve resolution alternating least squares (MCR-ALS), and principal component analysis (PCA) followed by partial least squares discriminant analysis (PLS-DA) were applied to efficiently discriminate the commercial quinoa grains according to their differential composition. The chemometrics-assisted LC-UV-DAD fingerprinting methodology demonstrated its potential to rapidly and reliably discriminate quinoa grains according to the differential composition of their protein extracts and it may be applied in food quality and food fraud control.

Applying federated learning to combat food fraud in food supply chains

Ensuring safe and healthy food is a big challenge due to the complexity of food supply chains and their vulnerability to many internal and external factors, including food fraud. Recent research has shown that Artificial Intelligence (AI) based algorithms, in particularly data driven Bayesian Network (BN) models, are very suitable as a tool to predict future food fraud and hence allowing food producers to take proper actions to avoid that such problems occur. Such models become even more powerful when data can be used from all actors in the supply chain, but data sharing is hampered by different interests, data security and data privacy. Federated learning (FL) may circumvent these issues as demonstrated in various areas of the life sciences. In this research, we demonstrate the potential of the FL technology for food fraud using a data driven BN, integrating data from different data owners without the data leaving the database of the data owners. To this end, a framework was constructed consisting of three geographically different data stations hosting different datasets on food fraud. Using this framework, a BN algorithm was implemented that was trained on the data of different data stations while the data remained at its physical location abiding by privacy principles. We demonstrated the applicability of the federated BN in food fraud and anticipate that such framework may support stakeholders in the food supply chain for better decision-making regarding food fraud control while still preserving the privacy and confidentiality nature of these data.

Fraud Control to Strengthen Internal Control Systems in Local Goverment

The purpose of this research is to analyze the existence and application of the Fraud Control Plan attributes in the work environment of the organization. The research method in this research is descriptive qualitative with a case study at government agencies in Bone Bolango Regency, Gorontalo Province that implements the Fraud Control Plan control tool. The results of this study that this government agencies has a good assessment in realizing the performance of Good Governance in the criteria of "Sufficiently adequate" in an indication of a reduction in fraud and an increase in employee performance in the organization. the important value of the presence of fraud control for agencies is the accountability of each attribute value reflects the transparency of each activity. Control of each agency is more controlled and positively directed and further minimizes the occurrence of fraud. The value that can be drawn from this research is the achievements that have been made optimally so that they can be properly maintained, and for elements that have not been fulfilled so that they can be corrected immediately in accordance with local government procedures and policies. The next researcher should consider the other methods used.