The Influence of the Bystander Effect and Internal Control on the Trend of Accounting Fraud at Village Credit Institutions in Jembrana Regency

Abstract

Financial statement fraud or accounting fraud is any intentional act or omission that results in materially misleading financial statements. Previous research has shown that variables that influence the tendency of accounting fraud, such as the bystander effect and internal control. This study aims to examine and explain the effect of the bystander effect and internal control on the tendency of accounting fraud. The research was conducted at the Village Credit Institution (LPD) in Jembrana Regency, with the respondents being managers and employees working at the LPD. Data were collected using a questionnaire and analyzed using variant-based SEM and processed using Partial Least Square (PLS).The results of the study found a bystander effect, and internal control had a significant effect on the tendency of accounting fraud.