Early Warning Fraud Determinants in Banking Industries

Wiwik Utami, Lucky Nugroho (), Ratna Mappanyuki and Venny Yelvionita

Asian Economic and Financial Review, 2020, vol. 10, issue 6, 604-627

Abstract: This study examined the effect of information technology governance, internal control, and organizational culture of early prevention of potential fraud based on the perception of bank employees. The population was all the Indonesia Stock Exchange listed banks. The sampling method used a combination method, namely random sampling for bank selection and convenience sampling of survey respondents. The number of sample banks that responded was 14 banks, and the number of respondents was 72 people. We measured the variables with a Likert scale and used partial least square (PLS) for the data analysis. The results proved that internal control and organizational culture had a significant positive effect on early warning for fraud. Information technology governance had a positive, but not significant impact on early warning for fraud. Therefore, the banking industry, which has highly regulated business activities has implemented adequate internal control and organizational culture as an effective early warning for fraud. Despite the application of IT in the banking industry in Indonesia it has not been massive, so the influence of IT governance on early warning of fraud was not significant.

Keywords: Information technology; Governance; Income control; Corporate control; Fraud. (search for similar items in EconPapers)
Date: 2020
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