Rural banks fraud: a story from Indonesia

Abstract

Purpose The purpose of this paper is to highlight the causes of fraud in rural banks in Indonesia and provide recommendations to reduce these financial crimes. Design/methodology/approach This paper is desk research using secondary data from research reports, journal articles, magazine articles and online news related to fraud cases in rural banks. The Fraud Diamond approach is applied to analyze the problems. Findings Financial and non-financial pressures, opportunities that are open because of weak oversight and governance, justification of fraud and the capability of perpetrators are the factors that cause bank fraud. Opportunity is the most significant contributor to fraud. Originality/value The novelty of this paper is that it discusses the causes of fraud in rural banks. Management and authority can learn from this case.

Academic Fraud in Online System during the COVID-19 Pandemic: Evidence from Lampung - Indonesia

“…Pressure is an impulse that appears in a person because there are factors that persuade him to 39ulfil his needs [25]. The pressure is a person's motivation to commit fraud [26], [27]. The possibility of fraud occurring is not only because someone is feeling stressed, but also if there is an opportunity for someone who is not under pressure.…”

“…Opportunity can happen for the situation allowing committing fraud [30]. Opportunity usually happen in a low internal control system institution, inappropriate supervision, low punishment, and unclear procedure [31], [26], [32], [33], [34]. A fraudster always has the knowledge and the opportunity to commit fraud [19].…”

“…Rationalization is convincing oneself that this fraudulent behavior is worth the risk [29]. Rationalization is the justification made by the perpetrator of the fraud for his actions [26]. Rationalization makes those who don't want to commit fraud at the first turn to want to do it.…”

“…Capability is how much power and capacity a person has to commit fraud [26]. Capability is a personal trait and ability that plays a major role in determining whether fraud might occur in the presence of three other elements [29].…”

Early Warning Of Organizational Ethical Culture In Accounting Fraud

“…The more someone understands technology, this ability could be misused for personal gain. This research's results are from the statements put forward by [16], who said that the rapid development of information technology weakened the influence of organizational ethical culture on accounting fraud.…”