Fraud Diamond Theory Research Articles

Analisis pengaruh fraud diamond terhadap potensi kecurangan program bantuan langsung tunai dana desa Kabupaten Jombang

This study was conducted with the aim of knowing the effect of Fraud Diamond elements which include pressure, opportunity, rationalization, and capability on the potential for fraud in the village fund program in Jombang Regency, East Java. Sources of data in this study were obtained from primary data sources by distributing questionnaires to village heads and village officials in Jombang Regency who came from Jombang District, Mojoagung District, Peterongan District, and Diwek District. The total population of this study was 1,510 with a total of 315 samples and was selected using cluster random sampling technique. The data analysis technique is using multiple linear regression with the help of the IBM SPSS 23 application program. The hypothesis in this study is that the Fraud Diamond Theory element consisting of pressure, opportunity, rationalization, and capability has an influence on the potential for fraud in village funds in Jombang Regency. The test results show that all hypotheses are accepted, namely the Fraud Diamond Theory element affects the potential for fraud in the village fund program in Jombang Regency.

Pengaruh Fraud Diamond Terhadap Kecurangan Laporan Keuangan Perusahaan Sektor Industri Barang Konsumsi yang Terdaftar di Bursa Efek Indonesia Tahun 2016-2020

This study aims to obtain empirical evidence regarding the effect of fraud theory on financial statements as measured using the F-Score method. The novelty of this research is the use of eight variables in this study to find out more specifically from the financial statements. This study uses the fraud diamond theory and agency theory. The population of this study consists of industrial goods and consumption companies listed on the Indonesia Stock Exchange. The population of this study consists of companies located in Indonesia. The research period is 2016 to 2020. The data used in this study is secondary data obtained from the company's annual financial statements. Purposive sampling technique was used to determine the research sample. There are 35 companies that are sampled. Factor analysis and logistic regression analysis methods were used as research methods. Based on the results of the study that ROA, RECEIV, BDOUT, AUDCHAGE, have a positive effect on the financial reporting of industrial and consumer goods companies listed on the Indonesia Stock Exchange. Furthermore, ACHANGE, LEV, AUDIT OPINION, DCHANGE have no effect on the financial statements of industrial and consumer goods companies listed on the Indonesia Stock Exchange.

Analisis Komponen Fraud Diamond Dalam Mendeteksi Financial Statement Fraud Pada Bank Umum Syariah Yang Terdaftar Di Bursa Efek Indonesia Periode 2014-2018

This study aims to examine the components of fraud in the fraud diamond theory in detecting fraud in financial statements. The research variables consist of pressure (financial stability, external pressure and financial target), opportunity (ineffective monitoring), and capability (turnover). directors) that are hypothesized to influence financial statement fraud. The F-Score is used to determine the financial statement fraud. Sampling was selected using a purposive sampling method, namely Islamic banks that have gone public or are listed on the Indonesia Stock Exchange (IDX) in the period 2014 to 2018. The data analysis method uses multiple regression using SPSS 16 software. Based on the results of hypothesis testing using the t test, it is obtained that financial stability (ACHANGE) and ineffective monitoring (BDOUT) variables have a significant positive effect on financial statement fraud. Meanwhile, external pressure (LEV) has a significant negative effect on financial statement fraud. And financial target (ROA) and capability (DCHANGE) have no significant effect on financial statement fraud. Tests using the F (simultaneous) test found that the variables of financial stability, external pressure, financial target, ineffective monitoring and capability together have an influence on financial statement fraud.

Analisis pengaruh fraud diamond terhadap potensi kecurangan program bantuan langsung tunai dana desa kabupaten jombang

This study was conducted with the aim of knowing the effect of Fraud Diamond elements which include pressure, opportunity, rationalization, and capability on the potential for fraud in the village fund program in Jombang Regency, East Java. This research uses quantitative methods, sources of data in this study were obtained from primary data sources by distributing questionnaires to village heads and village officials in Jombang Regency who came from Jombang District, Mojoagung District, Peterongan District, and Diwek District. The total population of this study was 1,510 with a total of 315 samples and was selected using cluster random sampling technique. The data analysis technique is using multiple linear regression with the help of the IBM SPSS 23 application program. The hypothesis in this study is that the Fraud Diamond Theory element consisting of pressure, opportunity, rationalization, and capability has an influence on the potential for fraud in village funds in Jombang Regency. The test results show that all hypotheses are accepted, namely the Fraud Diamond Theory element affects the potential for fraud in the village fund program in Jombang Regency.

E-Finance : Mitigation of Fraud Tendency in Indonesia

Purpose: This research aims to determine the application of e-finance in the Lumajang Regency DPUTR and its role in improving internal control and mitigating fraud risk with fraud diamond theory analysis.
 Design/methodology/approach: This research is qualitative case study research with descriptive methods. Data collection techniques use observation, documentation and semi-structured in-depth interviews. 
 Findings: Data analysis techniques through the stages of plan, design, prepare, collect, analyze, share. The results of this study include: 1) The application of e-finance in the Lumajang Regency DPUTR based on realtime online which is integrated with all LUMAJANG REGENCY OPDs to facilitate financial reporting in accordance with public sector accounting rules to prevent fraud so as to create transparency and can be accounted for; 2) Based on diamond theory fraud analysis, the application of e-finance is able to mitigate risks. fraud; 3) E-finance plays an important role in improving the internal control of the Lumajang Regency DPUTR.
 Research limitations/implications: The limitation of this research is the lack of theoretical foundations and previous research on the application of e-finance in public sector organizations. This finding provides solutions to public sector organizations in minimizing fraud through the application of e-finance applications by using fraud diamond theory analysis.
 Practical implications: This study adds literature on the application of e-finance to public sector organizations and its role in mitigating the risk of fraud which has not been discussed in previous studies. 
 Originality/value: This paper is original.
 Paper type: Research paper

Probing the Predictors of Fraud Using the Fraud Diamond Theory: An Empirical Evidence from Local Governments in Ghana

ABSTRACT Fraud remains a challenge for corporate and local governments in Ghana. Therefore, this study probes behavior predictors using the fraud diamond theory. The study used questionnaires to draw data. Results of data (n = 624) analysis based on the structural equation modeling confirmed the positive relationship between pressure, opportunity, rationalization and capability, and behavior intention. Opposed to erstwhile for-profit studies, rationalization was dominant, emphasizing nuanced behavior outcomes across domains. Situating the theory within the local government context, the investigation backs up the theory's suitability for behavior prediction whilst inter alia forefronting anti-fraud success as contingent on decoupling public administration from partisan politics.

The Determinants of Indulgence in Corruption Among Law Enforcement Personnel in Malaysia

This study investigated the determinants of indulgence in corruption among law enforcement agency personnel in Malaysia. This study focussed on three law enforcement agencies in Malaysia, the Royal Malaysia Police Department, the Road and Transport Department, and the Immigration Department. The Fraud Diamond Theory was used to form the framework and develop the hypotheses. It concerns corruption among law enforcement personnel using the four elements: capability, pressure, rationalization, and opportunity. There were four hypotheses developed in this study. The researcher used face-to-face and online surveys (questionnaires) as data collection method and the participation of respondents was voluntary. 150 questionnaires were issued for the collection of data through an online survey and face-to-face interviews. The data collection process took two months, from May 2020 to June 2020. In the earlier part of the data collection process, 63 questionnaires were obtained, while 79 questionnaires were received towards the end of the period. Based on the findings, there is a significant positive correlation between self-influence and family influence-related and the indulgence in corruption among law enforcement personnel. This research indicated that family pressure and self-influence attributes were accepted. However, another two attributes namely public perception and peer pressure, were rejected. This study has important implications for national or international policymakers to acknowledge that anti-corruption policies play a crucial role to curb corruption among law enforcement agencies and understand the need to adopt these anti-corruption policies according to each nation’s economic and cultural context. Keywords: corruption, indulgence in corruption, law enforcement, fraud diamond theory

FINANCIAL REPORTING MANIPULATION ON MINING COMPANIES IN INDONESIA: FRAUD DIAMOND THEORY APPROACH

Forensic accounting helps to discover fraud practices where the fraud diamond theory is one of the popular theories in this issue. It puts concerns on budget priorities, financial stability, inefficient monitoring, replacement of auditor and directors. As the dependent variable, financial statement manipulation funded by income control is used. The nine mining entities listed on the Indonesian Stock Exchange in 2017-2019 were chosen using the purposive sampling method, resulting in 27 observations. By using the multi-linear regression method, This study showed that financial targets and financial stability affect the occurrence of fraud in financial reports. Oppositely, insufficient monitoring, replacement of auditors and directors have no impact on the fraudulent reporting.

Managing Ghost Workers Fraud on Payroll in Tanzania: A Conceptual Framework

Tanzania has made several reforms to improve public service since independence in 1961. One of the major concerns has been to wipe out ghost workers on the payroll. The efforts would improve public service and avoid unnecessary wastages of resources. For decades the payroll still bears names of fictitious and ex-employees who either retired or deceased. Ghost workers have been oozing scarce funds that could support service to the neediest Tanzanians. The situation calls for immediate but comprehensive interventions for dealing with menace to avoid further negative impacts on public service management and the country. The core intervention is to comprehend the nature of fraud on the payroll in Tanzania. Therefore, the paper proposes a conceptual framework for identifying and managing ghost workers on the payroll. The study is based on secondary data. The study used Fraud Triangle Theory, Fraud Diamond Theory, and Fraud Lifecycle Management Theory to construct the conceptual framework for managing ghost workers on the payroll in Tanzania. The framework can facilitate organizations, researchers, and human resources practitioners to analyze initial motives and traits of employees towards unethical behaviors, the probability of fraud on the payroll, and the quality of fraud management systems. In addition, the framework portrays that the fraud management systems must be inherent features of efficient and effective human resources management of any organization that needs and wants to curb ghost worker frauds on the payroll.
 Keywords: Ghost Worker Frauds, Fraud Management, Conceptual Framework, Human Capital Management Information System, Payroll

Spirituality in Cheating Behavior: Evidence from Accounting Department Online Learning

COVID19 has penetrated into the joints of people's lives in the world. It shifts how society lives as a whole and learning process is one of the aspects that practically changed. Conventional learning switches over to online learning and as the consequences academic fraud behavior soaring. This paper aims to provide empirical evidence regarding the effect of pressure, capability, opportunity, rationalization and moderation effect of spirituality to academic fraud during online learning. This research is held in University of Trunojoyo Madura specifically accounting department. The subject of this study is college student in accounting department. Data obtained from deployment of online questionnaire, is processed with statistical tool namely SPSS. From the result it can be concluded that pressure, capability andopportunity positively and significantly affect academic fraud during online learning but rationalization not. In contrast, spirituality as independent and moderating variable not significantly affect academic fraud during online learning. The findings support fraud diamond theory partly but not social cognitive theory. This study offers some valuable knowledge, first the factor in fraud diamond theory such as pressure, capability, opportunity indeed enforce student to cheating. Second, spirituality is not negating academic fraud, so it gives insight to lecturer to improve the system in assignment and exam because student always tend to cheat when there is opportunity

Multidimensional drivers: exploring contractor rule violations in the construction industry

PurposeThis research aims to build a three-tiered driver system that entices contractor rule violations and explores the importance and the relationships among these drivers, hence providing theoretical support for the contractor rule violations governance.Design/methodology/approachA literature review based on fraud diamond theory identified drivers from Pressure, Opportunity, Rationalization and Capability that drive contractor rule violations. In the Chinese context, through feedback, discussion and analysis of semistructured interviews with ten experts, an improved three-tiered driver system was drafted. Based on this system, a survey was conducted and scored with experts to provide the data for this research. The decision-making trial and evaluation laboratory (DEMATEL) method was used to determine relationships and influences between factors, and the DEMATEL-based analytic network process method was used to weigh these factors.FindingsThis paper systematically studied the drivers of contractor rule violations, specifically, the results showed that pressure had an important driving effect across the driver system, and those five factors – poor cultural atmosphere, weak internal control, prior experience, moral disengagement and information asymmetry – had the most influence on contractor rule violations. The results also indicated the strong effect pressure has on enticing rule violations and revealed that culture atmosphere and internal company governance played crucial roles in the occurrence of rule violations.Practical implicationsThis study provided construction practitioners with a robust tool to analyze the drivers of contractor rule violations. The rule violation drivers in the construction practice scenes identified in this study can provide more direct and effective violation-related guidance for contractors, regulators and the industry.Originality/valueBased on the new perspective of fraud diamond, this paper systematically bulit a three-tiered driver system combining theory with practice. This study contributed to understand the driver mechanism of contractor rule violations especially the importance of internal factors of contractors, which provided theory reference for compliance governance of construction industry.

It is No Big Deal!”: Fraud Diamond Theory as an Explanatory Model for Understanding Students’ Academic Fraudulent Behaviour

It is No Big Deal!”: Fraud Diamond Theory as an Explanatory Model for Understanding Students’ Academic Fraudulent Behaviour

KECENDERUNGAN KECURANGAN PADA ALOKASI DANA DESA: ANALISIS FRAUD DIAMOND DAN RELIGIUSITAS

This study examines dimensions of fraud diamond against the intention of financial fraud in village fund allocation. Based on fraud diamond theory that is used in public organizations, especially in the management of village funds. This study also includes religiosity as a factor that can moderate the effect of pressure, opportunity, rationality and capability on fraudulent intentions in the Village Fund Allocation. The research sample is selected purposively: the Technical Implementer of Village Financial Management (PTPKD) or village officials responsible for managing village funds in the Special Region of Yogyakarta. The data collection technique using a questionnaire to answer the dimensions of the fraud diamond, namely pressure, opportunity, rationality, and capability, as well as the variables of religiosity and fraud intention.
 Based on the test results, pressure and weak internal control system had a positive and significant effect on the fraud intention. Meanwhile, religiosity harms fraud intention in village fund allocation. The results also show that religiosity reduces pressure and a weak internal control system intends to allocate village funds fraudulently. This study explains that the village-level government officer as an agent takes actions that want to benefit themselves, whilst they are given the authority to manage financial allocation given from the central government. This behaviour occurred because of pressure, opportunity, rationalization and capability. This research provides insights and ways to control fraudulent behaviour in village fund allocations when the factors that cause fraudulent intentions in village fund allocations are known.
 This study examines dimensions of fraud diamond against the intention of financial fraud in village fund allocation. Based on fraud diamond theory that is used in public organizations, especially in the management of village funds. This study also includes religiosity as a factor that can moderate the effect of pressure, opportunity, rationality and capability on fraudulent intentions in the Village Fund Allocation. The research sample is selected purposively: the Technical Implementer of Village Financial Management (PTPKD) or village officials responsible for managing village funds in the Special Region of Yogyakarta. The data collection technique using a questionnaire to answer the dimensions of the fraud diamond, namely pressure, opportunity, rationality, and capability, as well as the variables of religiosity and fraud intention.
 Based on the test results, pressure and weak internal control system had a positive and significant effect on the fraud intention. Meanwhile, religiosity harms fraud intention in village fund allocation. The results also show that religiosity reduces pressure and a weak internal control system intends to allocate village funds fraudulently. This study explains that the village-level government officer as an agent takes actions that want to benefit themselves, whilst they are given the authority to manage financial allocation given from the central government. This behaviour occurred because of pressure, opportunity, rationalization and capability. This research provides insights and ways to control fraudulent behaviour in village fund allocations when the factors that cause fraudulent intentions in village fund allocations are known.

Exploiting organisational vulnerabilities as dark knowledge: conceptual development from organisational fraud cases

PurposeThis paper aims to assert that knowledge of organisational weaknesses, vulnerabilities and compromise points (here termed “dark knowledge”), is just as critical to organisational integrity and hence, must also be managed in a conventional knowledge management sense. However, such dark knowledge is typically difficult to identify and accordingly, few studies have attempted to conceptualise this view.Design/methodology/approachUsing a background of fraud diamond theory, the authors examine this dark knowledge using a case study analysis of fraud at a large Asia-Pacific telecommunications provider. Semi-structured interviews were also conducted with the firm’s fraud unit.FindingsThe authors identify six components of dark knowledge, being artefactual knowledge, consequential knowledge, knowledge of opportunity, knowledge of experimentality, knowledge of identity and action and knowledge of alternativity.Originality/valueTo the best of the authors’ knowledge, this is the first paper to identify a knowledge type based on organisational compromises and vulnerabilities. The paper shows that accounts of organisational weakness can yet provide knowledge insights.

The Determinants of Frauds in Local Governments

Abstract Corruption continues to be pervasive throughout Indonesia. An ICW report in 2019 states that a total of 580 corruption suspects have been brought to trial. Civil servants were the main perpetrators of corruption, followed by municipal heads and local legislative heads and members. Perpetrators commit corruption mostly through budget misuse, mark-ups, fictitious reports, and embezzlement. Corruption is a serious problem because it is committed by the highest-ranking officers in organizations. The data confirms the importance of research on fraud in Indonesian local governments. In this respect, this study seeks to test the effectiveness of fraud diamond theory (pressure, opportunity, rationalization, and capability) in detecting fraud in Indonesian local governments. Our population is local governments in Java island. This study uses cross-sectional data obtained from local government corruption cases in Java Island during the 2015-2018 period that were legally resolved with binding Supreme Court decisions ( inkracht ). The results empirically find that performance accountability, regional autonomy, capital expenditure, fiscal decentralization, and mayoral tenure affect fraud in Indonesian local governments. Â Keywords: corruption; local governments; fraud diamond theory

FORENSIC ACCOUNTING AS AN INSTRUMENT FOR FRAUD DETECTION AND PREVENTION IN THE PUBLIC SECTOR: MODERATING ON MINISTRIES, DEPARTMENTS AND AGENCIES IN NIGERIA

The study examined forensic accounting as an instrument of detection and prevention of fraud in Nigeria. It specifically examined the influence of forensic accounting on detection and prevention of fraud in Ministries, Departments and Agencies in Nigeria. The study is predicated on policeman theory, white collar theory, fraud diamond theory. Primary sources of data were employed which covered the period of ten (10) years spanning from 2010 to 2020. A cross sectional Survey design was adopted. A Questionnaire was used in data collection from the staff of Integrated Personnel Payroll Information System and Office of the Account General of Federation. Seventy-five (75) questionnaires were used as the sample size. The study adopts descriptive statistics while regression analysis was used to test the stated hypotheses. The result of the findings showed that forensic accounting has positive and significant influence on fraud prevention, but foreign account has no total control on fraud detection. It was also revealed that forensic litigation has no significant positive influence on recovery of funds lost to fraud. The study recommends that forensic accounting systems should be allowed as a procedure for internal control systems so as to prevent or reduce the level of income leakages, mismanagement of funds and budget padding.

Fraud Diamond Theory in Detecting Financial Reporting Manipulation: A Case of Mining Companies Listed on the Indonesia Stock Exchange

Forensic accounting helps auditor in collecting information while conducting necessary assessment to discover fraud practice. One popular theory in the field is the fraud diamond theory. This study implements the theory to detect the existence of financial statement fraud on mining sector in Indonesia. The diamond fraud model as the enhancement of the triangle theory of fraud concerns budget priorities, financial stability, inefficient monitoring, adjustments to the auditor and changes to the manager. As a dependent variable, financial statement manipulation funded by income control is used. The sampling of 9 companies listed on the Indonesian Stock Exchange in the mining sector in 2017-2019 was chosen using purposeful sampling methods, resulting in 27 data observations. The data testing was performed by a multi-linear regression method. This study showed that financial targets and financial stability affect the occurrence of fraud in financial reports. Simultaneously, insufficient monitoring, auditing and change of the director have no impact on the financial statements.

Determinants of management fraud in the banking sector of Ghana: the perspective of the diamond fraud theory

PurposeFraud has become one of the most challenging issues facing the financial sector of most countries globally. These fraudulent transactions have led to loss of huge sums of money to financial institutions, as well as to their depositors. The current crises in the financial sector of Ghana, especially among the Deposit Taking Institutions, has largely been attributed to connected lending and lending to affiliated party institutions which are fraudulent corporate governance issues. This study, therefore, aims to assess the determinants of fraud among management staffs in the banking sector of Ghana.Design/methodology/approachThis study is anchored on the fraud diamond theory (FDT). Primary data was collected from 120 management staffs of the remaining 23 universal banks in Ghana. Estimation was done using structural equation modelling with maximum likelihood estimation technique.FindingsFraudulent activities in the banking sector of Ghana are driven by opportunities, pressure, rationalization and capacity to commit fraud, with capacity being the dominant factor.Practical implicationsThe regulator should strictly enforce the structure of shareholding as directed in the corporative governance directive to prevent ownership of a bank in the name of one person or a family, which gives high capacity to the Chief Executive Officers to misuse funds. The offenders should also be punished. Finally, the regulator should improve their supervision.Originality/valueThis study places the FDT into the context of the current banking crises of Ghana. The study therefore goes a long way to guide the regulator and government to formulate and implement policies on shareholding structure of banks.

Determinants of Financial Statement Fraud: Research Fraud Diamond Theory (Empirical Study on Manufacturing Company listed on the Stock Exchange)

Aims of research is toassess theprobable of financial statement fraud found on the theory of the fraud diamond. The Fraud diamond describes somecomponents lead a person to commit fraud; opportunity, capability, rationalization and pressure. Researchuses Fraud Score to investigate probable of financial statements fraud. The method use purposive sampling, with criteria of financial statements of manufacturing companies classified in Indonesia Stock Exchange period in 2013-2017. Research was conducted with quantitative methods,the analysis technique used multiple regression analysis and hypothesis testing using coefficient of determination test, F test andt test. The issues ofthe reserach presented thepressure ofvariables which isreplaced by financial targets and financial stability; alsothe opportunity of the variables are replaced by nature of industry are proven to be influential and significant in distinguish potential fraudulent financial statements.

Pendeteksian kecurangan laporan keuangan dengan menggunakan model beneish m-score: perspektif fraud diamond

Purpose: This study aims to prove whether pressure, opportunity, rationalization and capability elements of fraud diamond theory related to financial statements fraud. Research methodology: This associative research uses quantitative data with sources from company website and the Indonesia Stock Exchange (IDX). 55 companies listed in the infrastructure, utility and transportation sectors on the IDX during the 2016-2018 period used as the population in this research, with a total of 153 observations as sample. This research used logistic regression with IBM SPSS Statistics 26 program. Results: This research shows that only financial stability has positive effect on risk of commiting fraud, while the variables of natures of industry, rationalization and capability have no association with the financial statement fraud. Limitations: The measurement of the dependent variable uses Beneish M-Score, a probability model, therefore it is not 100% accurate; it is limited to the sector and period under study; and the low coefficient of determination in this study. Contribution: Providing empirical evidence about factors that support the occurrence of commiting fraud which will help investor and financial service authority. Keywords: Fraud, Fraud Diamond, Financial Statement, Beneish M-Score