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Organizational culture moderates the effect of bystander effect and internal control on accounting fraud trends in village credit institutions in Jembrana Regency

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  • Ida Bagus Anom Yasa

    (Bali State of Polytechnic,Kampus Bukit, Jimbaran, South Kuta, Badung Regency, Bali 80364, Indonesia)

  • I Ketut Sukayasa

    (Bali State of Polytechnic,Kampus Bukit, Jimbaran, South Kuta, Badung Regency, Bali 80364, Indonesia)

  • Ni Made Mega Abdi Utami

    (Bali State of Polytechnic,Kampus Bukit, Jimbaran, South Kuta, Badung Regency, Bali 80364, Indonesia)

Abstract

This study aims to examine and explain organizational culture's role in moderating the bystander effect and internal control effect on the tendency of accounting fraud. The research was conducted on The Village Credit Institution in Jembrana Regency, with the respondents being managers and employees who worked at the Village Credit Institution. Data were collected using a questionnaire, analyzed using variant-based SEM, and processed using Partial Least Square (PLS). The study's results found that the bystander effect and internal control significantly affected the tendency of accounting fraud. Organizational culture can moderate the bystander effect's influence and internal control on the tendency of accounting fraud. The results of this study are expected to provide a systematic overview to The Village Credit Institution management in the future regarding the influence of the bystander effect and the weakness of internal controls on the occurrence of accounting fraud. Through the results of this study, the Village Credit Institution Supervisory and Management Agency is expected to eliminate the influence of bystanders, streamline the internal control system, and through a positive organizational culture, encourage the emergence of whistleblowers as an effort to prevent fraud. Key Words:Accounting Fraud Tendency, Bystander Effect, Internal Control, Organizational Culture.

Suggested Citation

  • Ida Bagus Anom Yasa & I Ketut Sukayasa & Ni Made Mega Abdi Utami, 2022. "Organizational culture moderates the effect of bystander effect and internal control on accounting fraud trends in village credit institutions in Jembrana Regency," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(7), pages 210-217, October.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:7:p:210-217
    DOI: 10.20525/ijrbs.v11i7.2097
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    References listed on IDEAS

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    1. Chad Albrecht & Daniel Holland & Ricardo Malagueño & Simon Dolan & Shay Tzafrir, 2015. "The Role of Power in Financial Statement Fraud Schemes," Journal of Business Ethics, Springer, vol. 131(4), pages 803-813, November.
    2. Adriana S. Cordis & Elizabeth M. Lambert, 2017. "Whistleblower laws and corporate fraud: Evidence from the United States," Accounting Forum, Taylor & Francis Journals, vol. 41(4), pages 289-299, December.
    3. Puji Rahayu Setyaningsih & Nengzih Nengzih, 2020. "Internal Control, Organizational Culture, and Quality of Information Accounting to Prevent Fraud: Case Study From Indonesia's Agriculture Industry," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 316-328, July.
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