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Internal Controls In Fraud Prevention Effort: A Case Study

Author

Listed:
  • Rizki Hamdani
  • Ahmad Riski Albar

    (Department of Accounting, Universitas Islam Indonesia, Yogyakarta, Indonesia
    Department of Accounting, Universitas Muhammadiyah Sumatera Utara, Medan, Indonesia)

Abstract

This study is aimed at investigating how far the internal controls are able to prevent fraud in financing administration at an Islamic Bank in Medan, Indonesia. The method applied in this study was a case study method. The operational definition used in this study was COSO framework. The data were collected through observations and semi-structured interviews. The results of the study show that some weaknesses of the internal controls have been identified as one of the factors of fraud. Poor internal controls lead to fraud. The management of the bank still employs one official to the same officials to conduct various financing activities. It leads to fraud because the activities are lack of supervisions. This study is focused on one company, so the findings may not be generalized to other companies. It is because of the different types of business, working environment, and practices. It is expected that the future study is able to enlarge the number of samples or companies.

Suggested Citation

  • Rizki Hamdani & Ahmad Riski Albar, 2016. "Internal Controls In Fraud Prevention Effort: A Case Study," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 20(2), pages 127-135, Desember.
    • Handle: RePEc:uii:jaaife:v:20:y:2016:i:2:p:127-135
    DOI: http://dx.doi.org/10.20885/jaai.vol20.iss2.art5
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    Citations

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    Cited by:

    1. 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.
    2. Analisa Analisa, 2020. "Factors influencing unethical behaviour in banking industry," Journal of Contemporary Accounting, Master in Accounting Program, Faculty of Business & Economics, Universitas Islam Indonesia, Yogyakarta, Indonesia, vol. 2(2), pages 97-107, May.

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