Relationship Among Ethical Value And Fraud Diamond In Banking Industry During Pandemic
DOI:
https://doi.org/10.38142/ijesss.v3i2.218Keywords:
Ethical Value, Fraud Diamond, BankingAbstract
The occurrence of an economic crisis and the company's operating conditions that are different from usual during the pandemic can result in the emergence of loopholes in committing fraud. This study aims to investigate the relationship between ethical values and the fraud diamond, namely, pressure, opportunity, rationalization, and capability against bank employee fraud during the pandemic. Thus, this research is expected to make a theoretical contribution to the development of fraud theory and a practical contribution to policymakers in preventing fraud in the banking industry. The methods research is a quantitative study with primary data sourced directly from online survey responses. The respondents of this research are followed by 133 bank employees in Indonesia. Based on the Rank Spearman Correlation test, the factors that significantly influence bank employee fraud during the pandemic are ethical values, opportunity, rationalization, and capability. Pressure has no significant effect on bank employee fraud. Furthermore, rationalization has a significant relationship with all variables tested, especially on capabilities, ethical values, and employee fraud. These results suggest that the banking industry anticipates wrong rationalizations from employees regarding fraudulent acts. Instilling ethical values is believed to be able to direct the right rationalization so that employees do not take advantage of their abilities to commit fraud in the workplace.
Downloads
References
Abdullahi, R., & Mansor, N. (2017). Fraud Triangle Theory and Fraud Diamond Theory. Understanding the Convergent and Divergent For Future Research. International Journal of Academic Research in Accounting, Finance and Management Sciences, 5(4), 38-45. https://doi.org/10.6007/IJARAFMS/v5-3/1823
ACFE. (2020). Report to the nations on occupational fraud and abuse. https://www.acfe.com/report-to-the-nations/2020/
Avortri, C., & Agbanyo, R. (2021). Determinants of management fraud in the banking sector of Ghana: the perspective of the diamond fraud theory. Journal of Financial Crime, 28(1), 142-155. https://doi.org/10.1108/JFC-06-2020-0102
Cressy, R., Cumming, D., & Mallin, C. (2010). Entrepreneurship, Governance and Ethics. Journal of Business Ethics, 95, 117-120. https://doi.org/10.1007/s10551-011-0848-3
Dadzie-Dennis, E. N., Caesar, L., & Korletey, J. T. (2018). Employee Fraud in the Banking Sector of Ghana. SBS Journal of Applied Business Research, 6, 4-17.
Dellaportas, S. (2013). Conversations with inmate accountants: Motivation, opportunity and the fraud triangle. Accounting Forum, 37(1), 29-39. https://doi.org/https://doi.org/10.1016/j.accfor.2012.09.003
Dewi, N. H. U., Wulanditya, P., Oktarina, D., & Ardianto, H. (2021). Banking sector lack detection: Expectation gap between auditors and bankers. Accounting, 7(6), 1353-1362. https://doi.org/10.5267/j.ac.2021.4.002
Dorris, B. (2020). Coronavirus Pandemic Is a Perfect Storm for Fraud. Association of Certified Fraud Examiners. https://www.acfe.com/press-release.aspx?id=4295010491
Fernandhytia, F., & Muslichah, M. (2020). The Effect of Internal Control, Individual Morality and Ethical Value on Accounting Fraud Tendency. Media Ekonomi Dan Manajemen, 35(1), 112. https://doi.org/10.24856/mem.v35i1.1343
Kassem, R., & Higson, A. (2012). The New Fraud Triangle Model. Journal of Emerging Trends in Economics and Management Sciences, 3(3), 191-195.
Kazemian, S., Said, J., Hady Nia, E., & Vakilifard, H. (2019). Examining fraud risk factors on asset misappropriation: evidence from the Iranian banking industry. Journal of Financial Crime, 26(2), 447-463. https://doi.org/10.1108/JFC-01-2018-0008
Kazemian, S., Said, J., Nia, E. H., & Vakilifard, H. (2018). Examining Fraud Risk Factors on Asset Misappropriation?: Evidence from the. Journal of Financial Crime, 26(2), 447-463. https://doi.org/10.1108/JFC-01-2018-0008
Krummeck, S. (2008). The role of ethics in fraud prevention: a practitioner's perspective. Business Ethics: A European Review, 9(4), 268-272. https://doi.org/10.1111/1467-8608.00200
Mansor, N., Nuhu, M. S., Sultan, U., & Abidin, Z. (2015). Fraud Triangle Theory and Fraud Diamond Theory?: Understanding the Convergent and Divergent for Future. European Journal of Business and Management, 7(28), 30-37.
Minanari. (2021). Effect of compensation, and internal control perceived behavioral control of fraud. International Journal of Environmental, Sustainability, and Social Sciences, 2(3), 250-256. https://doi.org/10.38142/ijesss.v2i3.97
Mohamed, N., Zakaria, N. B., Shahirah, N., & Muhamad, N. F. (2021). The Influencing Factors of Employee Fraud in Malaysian Financial Institution: the Application of the Fraud Pentagon Theory. Academy of Strategic Management Journal, 20(6), 1-12.
Nurdiani, N. (2014). Teknik Sampling Snowball dalam Penelitian Lapangan. ComTech: Computer, Mathematics and Engineering Applications, 5(2), 1110-1118. https://doi.org/10.21512/comtech.v5i2.2427
Peprah, W. K. (2018). Predictive Relationships among the Elements of the Fraud Diamond Theory: The Perspective of Accountants. International Journal of Academic Research in Accounting, Finance and Management Sciences, 8(3), 141-148. https://doi.org/10.6007/ijarafms/v8-i3/4547
Pradipta, A., & Bernawati, Y. (2019). The Influence of Pressure, Opportunity, Rationalization and Ethical Value on the Accounting Fraud Tendency. Sustainable Business Accounting and Management Review, 1 (2)(2), 63-71.
Ruankaew, T., & of Accounting, P. (2016). Beyond the Fraud Diamond. International Journal of Business Management and Economic Research(IJBMER), 7(1), 474-476. www.ijbmer.com
Said, J., Alam, M. M., Ramli, M., & Rafidi, M. (2017). Integrating ethical values into fraud triangle theory in assessing employee fraud: Evidence from the Malaysian banking industry. Journal of International Studies, 10(2), 170-184. https://doi.org/10.14254/2071-8330.2017/10-2/13
Schwartz, M. S. (2016). Ethical Decision-Making Theory: An Integrated Approach. Journal of Business Ethics, 139(4), 755-776. https://doi.org/10.1007/s10551-015-2886-8
Shonhadji, N. (2021). The Determinant of Whistleblowing Intention in the Case of Bank Fraud. Binus Business Review, 12(2), 151-164. https://doi.org/10.21512/bbr.v12i2.6593
Sorunke, & Abayomi, O. (2016). Personal Ethics and Fraudster Motivation: The Missing Link in Fraud Triangle and Fraud Diamond Theories. International Journal of Academic Research in Business and Social Sciences, 6(2), 159-165. https://doi.org/10.6007/ijarbss/v6-i2/2020
Sujeewa, G. M. M., Yajid, M. S. A., Azam, S. M. F., & Dharmaratne, I. (2018). The New Fraud Triangle Theory - Integrating Ethical Values of Employees. International Journal of Business, Economics and Law, 16(5), 52-57. http://ijbel.com/wp-content/uploads/2018/08/ijbel5_216.pdf
Wolfe, D. T., & Hermanson, D. R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. CPA Journal, 74(12), 38-42.
Zuberi, O., & Mzenzi, S. I. (2019). Analysis of employee and management fraud in Tanzania. Journal of Financial Crime, 26(2), 412-431. https://doi.org/10.1108/JFC-01-2018-0012
Downloads
Published
Issue
Section
License
Copyright (c) 2022 Putri WULANDITYA, Herwin ARDIANTO, Evi SISTIYARINI
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Creative Commons Attribution-NonCommercial 4.0 International License.
