Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia

Purpose: This study aims to examine the effects of religiosity, ethical leadership and local wisdom on the relationship between fraud risk management and asset misappropriation in Indonesia. Design/methodology/approach: Data were collected using a set of questionnaire surveys administered to the hea...

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Published in:Journal of Islamic Accounting and Business Research
Main Author: Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
Format: Article
Language:English
Published: Emerald Publishing 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85198535872&doi=10.1108%2fJIABR-09-2022-0227&partnerID=40&md5=79f425b33bac442f435d45cf06219ae7
id 2-s2.0-85198535872
spelling 2-s2.0-85198535872
Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
2024
Journal of Islamic Accounting and Business Research


10.1108/JIABR-09-2022-0227
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85198535872&doi=10.1108%2fJIABR-09-2022-0227&partnerID=40&md5=79f425b33bac442f435d45cf06219ae7
Purpose: This study aims to examine the effects of religiosity, ethical leadership and local wisdom on the relationship between fraud risk management and asset misappropriation in Indonesia. Design/methodology/approach: Data were collected using a set of questionnaire surveys administered to the head office, local government internal auditors (inspectorate) and local government employees in Indonesia. Sample selection used purposive techniques and obtained 151 respondents who became research data. The dependent variable was asset misappropriation. The independent variable was fraud risk management. The moderating variables for this study were religiosity, leader ethics and local wisdom. The analysis technique applied the structural equation model-partial least square (SEM-PLS). Findings: Fraud risk management has a significant negative effect on asset misappropriation. In addition, this study finds evidence that religiosity, ethical leadership and local wisdom increase fraud risk management against asset misappropriation. Research limitations/implications: This study proposes an integrative model that enables local governments to understand fraud risk management. By integrating religiosity, ethical leadership and local wisdom, managers can design strategies to prevent asset misappropriation. Originality/value: This research has the advantage of proposing an integrative model for mitigating asset misappropriation. Research on asset misappropriation is limited. Therefore, this study provides insights into fraud risk management, particularly in Indonesia’s local governments. In addition, this study adds ethical aspects such as religiosity, leadership and local wisdom to complement the weaknesses of fraud risk management and reduce the potential for asset misappropriation. © 2024, Emerald Publishing Limited.
Emerald Publishing
17590817
English
Article

author Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
spellingShingle Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
author_facet Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
author_sort Tarjo T.; Anggono A.; Alim M.N.; Said J.; Mohd-Sanusi Z.
title Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
title_short Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
title_full Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
title_fullStr Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
title_full_unstemmed Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
title_sort Religiosity, ethical leadership and local wisdom in moderating the effect of fraud risk management on asset misappropriation: evidence from local government in Indonesia
publishDate 2024
container_title Journal of Islamic Accounting and Business Research
container_volume
container_issue
doi_str_mv 10.1108/JIABR-09-2022-0227
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85198535872&doi=10.1108%2fJIABR-09-2022-0227&partnerID=40&md5=79f425b33bac442f435d45cf06219ae7
description Purpose: This study aims to examine the effects of religiosity, ethical leadership and local wisdom on the relationship between fraud risk management and asset misappropriation in Indonesia. Design/methodology/approach: Data were collected using a set of questionnaire surveys administered to the head office, local government internal auditors (inspectorate) and local government employees in Indonesia. Sample selection used purposive techniques and obtained 151 respondents who became research data. The dependent variable was asset misappropriation. The independent variable was fraud risk management. The moderating variables for this study were religiosity, leader ethics and local wisdom. The analysis technique applied the structural equation model-partial least square (SEM-PLS). Findings: Fraud risk management has a significant negative effect on asset misappropriation. In addition, this study finds evidence that religiosity, ethical leadership and local wisdom increase fraud risk management against asset misappropriation. Research limitations/implications: This study proposes an integrative model that enables local governments to understand fraud risk management. By integrating religiosity, ethical leadership and local wisdom, managers can design strategies to prevent asset misappropriation. Originality/value: This research has the advantage of proposing an integrative model for mitigating asset misappropriation. Research on asset misappropriation is limited. Therefore, this study provides insights into fraud risk management, particularly in Indonesia’s local governments. In addition, this study adds ethical aspects such as religiosity, leadership and local wisdom to complement the weaknesses of fraud risk management and reduce the potential for asset misappropriation. © 2024, Emerald Publishing Limited.
publisher Emerald Publishing
issn 17590817
language English
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