The Effect of Individual Morality on Fraud Prevention Through Internal Control, Whistleblowing System and Organizational Commitment

Abstract

Background - Current conditions, fraud or fraud often occurs in many companies and government agencies,
both on a global scale and on an Indonesian scale. The Association of Certified Fraud Examiners (ACFE)
Indonesia Chapter in 2019 for the second time has conducted research on the Indonesian Fraud Survey (SFI)
which discusses the fraudulent practices that occur most frequently and cause the greatest losses in Indonesia.
Based on the results of a survey conducted by the ACFE Indonesia Chapter on 239 respondents, it shows that the
most common fraud in Indonesia is corruption with a percentage of 64.4% or selected by 154 respondents.
Several studies have been conducted and the factors of fraud prevention that are still being carried out are
Individual Morality, Internal Control, Whistleblowing System and Organizational Commitment.
Purpose - This study aims to determine the effect of individual morality on fraud prevention through internal
control, whistleblowing system and organizational commitment.
methodology - This study uses a type of quantitative research with the formulation of associative problems and
with a quantitative descriptive research design to explain the data obtained from the results of the distributed
instruments. The sampling technique used purposive sampling with the determination of the number of samples
using the slovin's formula. Data collection was carried out through distributing questionnaires. Data testing and
analysis were carried out by testing the inner and outer models using PLS ver. 3.0
Findings - The analysis and hypothesis testing results show the direct influence between individual morality,
internal control, whistleblowing system and organizational commitment have a significant effect on the fraud
prevention. Individual morality through internal control has a significant indirect effect, Individual morality through
the whistleblowing system has a significant indirect effect and individual morality through organizational
commitment has a significant indirect effect
Originality - The novelty of this research is the novelty of the research model in which this study uses three
moderating variables namely internal control, whistleblowing system and organizational commitment and this
research was conducted at BPKP RI