The efficacy of control environment as fraud deterrence in local government

Nuswantara Dian Anita (), Maulidi Ach () and Pujiono
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Nuswantara Dian Anita: Universitas Negeri Surabaya, Jl. Raya Kampus Unesa, Lidah Wetan, Lakarsantri, Kota SBY, Jawa Timur 60213, Indonesia
Maulidi Ach: Universitas Negeri Surabaya, Jl. Raya Kampus Unesa, Lidah Wetan, Lakarsantri, Kota SBY, Jawa Timur 60213, Indonesia
Pujiono: Universitas Negeri Surabaya, Jl. Raya Kampus Unesa, Lidah Wetan, Lakarsantri, Kota SBY, Jawa Timur 60213, Indonesia

Management & Marketing, 2017, vol. 12, issue 4, 591-613

Abstract: In a globalised scenario, the topic of an enormous increase of malfeasance in the local governments, posing catastrophic threats which come from vicious bureaucratic apparatus, becomes a global phenomenon. This current study uses case study material on the risk management control system specially the control environment in Indonesia local governments to extend existing theory by developing a contingency theory for the public sector. Within local government, contingency theory has emerged as a lens for exploring the links between public sector initiatives to improve risk mitigation and the structure of the control system. The case illustrates that the discretion of control environment - the encouragement of a local government’s control environment - is considered as a springboard for fraud deterrence and might be the loopholes in the government control systems.

Keywords: malfeasance; control environment; contingency theory (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:manmar:v:12:y:2017:i:4:p:591-613:n:5

DOI: 10.1515/mmcks-2017-0035

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