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E-ISSN : 3090-2401 The Effect Of Internal Control and human Resource Competence on Fraud Prevention with Wisthleblowing System as a Moderating Variable 1*Mutiara Ilmiana Nur Isfani, 2Azkia Nur Intan Fadhilah 2Sekolah Tinggi Ilmu Ekonomi Tri Bhakti.
Bekasi.
Indonesia 2Universitas Panca Sakti.
Bekasi.
Indonesia Email : azkianurintan@gmail.
Corresponding author e-mail: mutiailmiana@gmail.
Article Info Abstract Keywords:
o Internal Control.
o Human Resource Competence.
o Fraud Prevention.
o Whsitleblowing System Purpose Ae This research aims to obtain emprocal evidence about the effect of internal control and human resource competence on fraud prevention with the Whistleblowing sytem as a moderating variable.
Article History Received: 8 Ae 01 - 2025 Accepted: 16 Ae 01 - 2025 Published: 31 Ae 04 - 2025 Design/methodology/approach Ae This study investigates the impact of internal control and human resource competence on fraud prevention, with whistleblowing system as a moderating factor.
Data were collected from 110 employees of PT.
Bank Pembangunan Daerah Jawa Barat and Banten.
Tbk Bekasi Branch through questionnaires, the researcher used PLS SEM Version 3.
Findings Ae The findings reveal that both internal control and human resource competence have a posictive and significant effect on fraud The whistleblowing system strengthens the relationship between internal control and fraud but does not significantly moderate the relationship between human resource competence and fraud prevention.
Research limitations/implications Ae This study is limited to all variables including internal control and human resource competence as independent variables, fraud prevention as the dependent variable, and whistleblowing system as a moderating variable.
The data collected through questionnaires, so the data obtained depends on the respondents perceptions of the effectiveness of the variables.
INTRODUCTION
Fraudulent practices in Indonesia are still very rampant in various sectors, namely goods, services, manufacturing, government and banking.
Fraud cases such as embezzlement, corruption, and financial manipulation often take center stage in the media and draw sharp criticism from the public and watchdog agencies.
Transparency International's 2023 report shows that Indonesia is in a relatively low position in the Corruption Perception Index (CPI).
Based on the results of a survey conducted by Indonesian Corruption Watch, the potential for corruption in the banking sector is very high.
This can be seen from the data showing that the banking sector occupied the first position with the highest number of corruption cases in BUMN during the 2016-2021 period.
In the banking sector, fraud is a very serious threat.
With the occurrence of fraud, public trust in banks will decrease, which will result in people no JOURNAL OF ACCOUNTING
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Fraud is based on pressure, opportunity, and rationalization for personal gain.
One of the phenomena found was an allegation of corruption in the provision of BNI Wirausaha (BWU) credit by PT Bank Negara Indonesia Jember branch office through Mitra Usaha Mandiri Semboro Saving and Loan Cooperative (KSP MUMS).
The practice was carried out by 3 suspects who had important positions.
There are those who have positions as Chairperson of KSP MUMS.
KSP MUMS Manager, and BNI Jember Branch Manager, the action has been carried out from 2018 - 2023.
This means that the perpetrators can launch fraudulent actions because they have the opportunity.
The impact of the case was that PT Bank Negara Indonesia Jember branch office suffered a loss of IDR 125 billion .
ttp://kejati.
Although various efforts have been made to improve transparency and accountability in various sectors, acts of fraud still occur.
This shows that internal control and risk management have not been fully effective.
Fraud prevention is an effort to prevent the perpetrator from committing fraud and narrowing the opportunities for the perpetrator to commit other fraud which will harm the agency or individual and damage the reputation of both internal and external parties (Retno.
There are several factors that can help prevent fraud, namely internal control.
According to research conducted by (Febriansyah & Indirwan, 2022.
Gusnardi, 2018.
Samuel Sanjaya & Faisal, 2022.
Thalha & Saad, 2.
states that the effect of internal control has a positive and significant effect on fraud prevention.
With the implementation of internal control in a company, it can protect assets, improve operational efficiency, monitor and control the credibility and accuracy of financial records, and become an external motivator for employees to comply with applicable regulations (Faisal et al.
, 2023.
Busneti et al.
, 2.
Another factor that can reduce the potential for fraud is the competence of human The success of internal control is strongly influenced by the ability of HR to understand the ethical standards and policies of an organization.
If an organization has competent human resources, it can increase the effectiveness and efficiency of the assigned tasks, because they have adequate knowledge and skills.
Competent human resources will also avoid committing fraud, because it is against ethics and with the knowledge they have, committing fraud can destroy future careers.
(Saputra et al.
, 2019.
Suandewi, 2.
states that competence has a positive and significant effect on fraud prevention.
There are other factors that can strengthen a person to avoid fraud, namely the whistleblowing system.
Today's sophisticated information technology can be used to reduce fraud by providing a reporting platform for company employees and the public to report fraud.
With a whistleblowing system, employees can play an active role in reporting suspected fraud, but the security and confidentiality of the identity of the reporter must be considered.
As in (Akhyaar et al.
, 2022.
Megawati & Reskino, 2.
research, its shows that social support from family and society, the character of the reporter, and the existence off a good whistleblowing system are important factors in exposing fraud (Melindawati et al.
, 2.
The gap found in research on the effect of human resource competence on fraud where in reasearch (Rahmadani et al.
, 2023.
Saputra et al.
, 2.
found a positive effect, while in research (Rahmadani et al.
, 2.
stated that there was no significant effect on human resource competence, so this research is important to overcome thease gaps and add reseacr refenrence.
Despite the implementation of internal controls amd whistleblowing system in the banking sector, fraud persist, indicating gaps in these mechanisms.
Limited studies have JOURNAL OF ACCOUNTING
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This study aims to addres this gap by exploring these relationship.
LITERATUR REVIEW
Fraud Triangle Theory Fraud triangle is an idea that examines the causes of fraud.
This idea was first prposed by (Cressey, 1.
which was later integrated into SAS No.
(Satria Rukana & Osta Nababan, ) said the fraud triangle consist of three factors in his book namely:
Pressures Opportunity Realization Attribution Theory Attribution theory was first discovered by Fritz Heider in 1958.
This theory explains the cause of a certain event, someone will provide a reasonable reason regarding the cause of the According to (Adelin & Fauzihardani, 2.
there are factors in attribution theory.
The first factros is internal factors which are factors that exist outside the individual such as personality, values, skill which will shape the way of thinking and inidividual behavior.
Then external factors are factors that exist whitin individuals such as economic conditions, culture, organizational policies that will provide boundaries and contexts that influence individual Internal Control According to Masnoni et al.
, .
in his book, internal control is a series of processes, policies, and procedures designed in an organization to help achieve the objectives set with efficiency,effectiveness, and control.
There are five components in internal control that are made and implemented by the company and management to ensure that control objectives will be achieved, so as to prevent fraud in it, including control environment, risk assesment, control activities, information and communication, and monitoring (COSO, 2.
Human Resource Competence Human resource competence is a personsAos ability in terms of knowledge, skills, and personality characteristics that directly affect their perfomance in achieving goals (Syafitri et , 2.
(Nurillah, 2.
said human resource competence include capabilities, namely the ability of a person or indivual, an organizational .
or a system in carrying out its functions or authority to achieve its goals effectively and efficiently.
Capability should be seen as the ability to perform, produce results and outcomes.
The competence of qualified human resource, supported by education, training and experience in finance, is critical to understanding and applying accounting logic.
Lack of competence can lead to errors in financial statements and misalignment with government standards, resulting in inaaccurate information received by users (Suandewi, 2.
Fraud Prevention One of the most effetive ways to deal with fraud is fraud prevention.
Chartered JOURNAL OF ACCOUNTING
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in the book (Tarjo & Sakti, 2.
fraud prevention aims to emphasize opportunities and eliminate fraudster desires.
Some of the ways to improve fraud prevention are fraud awareness training.
According to (Mahsun, 2.
fraud prevention is a series to prevent fraud or fraud in an organization or company.
Fraud prevention involves developing strict policies and procedures strict supervision, traning employees to recognize signs of fraud, and enforcing the law against fraudsters.
Whistleblowing System Whistleblowing system is a system used to collect, process, follow up, and make reports on information submitted by whistleblowers on vilations of corporate governace principles that occur in the company (Nurhayati et al.
, 2.
According National Committee on Governance Policy .
there are 3 components, namely structural aspects, operational aspects, and maintenances aspects.
The whistleblowing system aims to protect and control sensitive and potentially important infromation, which if disclosed to authorities or third parties could threaten the companyAos interest (Faisal & Sari, 2018.
Melindawati et al.
, 2.
Hypotheses development The role of internal control is expected to be used as a tool to direct, surpive, and measure the resource in the company (Carmenit.
Internal control is needed so that companies can monitor various business activities effectively and take preventive action to anticipate bankrupycy losses due to fraud.
Therefore, the survival of the company will be guaranteed if there is good internal control accompanied by the creation of a healthy and mutually supportive work environment in all areas of the company.
The researcher formulates the following hypothesis based on previous research on how Internal control positive impacts fraud prevention:
H1: Internal Control has a positive effect on Fraud Prevention.
Competence is the ability to carry out tasks or work based on the knowledge, skills, and attitudes of individuals who form their characteristics.
Human resources (HR) is one component that is very important and even inseparable from an organization, institution or Human resource competencies include capacity, namely the ability of a person or individual, an organization .
, or a system to carry out its functions or authority to achieve its goals effectively and efficiently.
Capacity must be seen as the ability to achieve performance, to produce outputs and outcomes, (Nurillah, 2.
The resaerch formulates the following hypothesis based on previsious research on how human resource competence positive impacts fraud prevention H2: Human Resource Competence has a positive effect on Fraud Prevention.
To avoid fraud, fraud prevention is needed.
Internal control is an element of an organization's plan in its efforts to protect assets, motivate employees to comply with fixed regulations, and optimize the level of operational efficiency of the Company.
With good internal control, it can prevent fraud.
Whistleblowing system is a form of internal control, by presenting a whistleblowing system, employees can actively participate in monitoring and reporting fraud.
(Suandewi, 2.
which states that the whistleblowing system has a positive relationship with fraud prevention.
Based on previous research and a explanation of how whistleblowing system strengthens the relationship between internal control and fraud
JOURNAL OF ACCOUNTING
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H3: Whistleblowing System strengthens the relationship between Internal Control and Fraud Prevention.
Competent human resources will increasingly avoid committing fraud.
Because fraud will result in the knowledge and skills possessed as useless.
HR who have competence will have an anti-fraud attitude, and with the WBS, workers can easily report suspected fraud.
Fraud can be revealed due to reporting from someone whose identity is kept confidential.
The implementation of WBS will anticipate the perception that the report is only based on incomplete information or unfounded presumptions.
(Yulian Maulida & Indah Bayunitri, 2.
which states that the whistleblowing system has a positive relationship with fraud Based on previous research and a explanation of how whistleblowing system strengthens the relationship between internal control and fraud prevention, the research formulates the following hypothesis:
H4: Whistleblowing System Cannot strengthens the relationship Human Resource Competence and Fraud Prevention.
RESEARCH METHOD
This study uses a hypothesis testing approach to determine the effect between the independent variables, namely internal control and human resource competence on the dependent variable, namely fraud prevention, with the whistleblowing system as a moderating The type of research used is correlational research, which aims to find relationships between variables in the context of problems that are not planned in advance.
This study uses minimal intervention, with primary data sources obtained through distributing questionnaires to respondents (Sekaran, 2.
The method used is quantitative, to analyze the significant relationship between variables through data processing in the form of respondents' answer scores to the questionnaire.
A total of 110 employees from PT.
Bank Pembangunan Daerah Jawa Barat dan Banten Bekasi Branch were surveyed due to their direct involvement in financial operations.
The questionnaire, consisting of 54 validated items, measured internal control, human resource competence, fraud prevention, and the whistleblowing system.
The variables used in this study are as follows:
Table 1.
Operationalization of Research Variabel Type Variable Dimension Source Control Environment Risk Assesment Control Activities Independent Variables Internal Control (Ati Lathifah, 2.
Monitoring Infromation Communication JOURNAL OF ACCOUNTING
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E-ISSN : 3090-2401 Type Variable Dimension Source Knowledge Human Resource Competence Skill Attitude Pressure Dependent Variable Fraud Prevention Opportunity Rationalitation Structural Aspect Moderating Variable Whistlebowing System (T Togatorop, 2.
(Yulian Maulida & Indah Bayunitri, (Retno, 2.
Operational Aspect Maintanance Aspect The data analysis method used in this study was the Partial Least Square (PLS) PLS is a structural equation modeling (SEM) solution method that is better suited for this study than other SEM aprroaches.
with the following equation, there are two test models:
PK=0 1IC 2KSDM 3PF 4IC*WS 5KSDM*WS A
RESULTS
Respondent Demographics Respondents who participated in this study were all individuals working in companies in the banking companies.
Through questionnaire distribution, the researcher managed to obtain data from 110 respondents.
With 64 male and 46 female respondents, the majority of rspondents were between 36 and 40 years old.
Most of the respondents have held the position of operational management staff for 11-20 years.
Each answered all questions related to internal control and human resource competence on fraud prevention with whistleblowing system as a moderating variable.
Normality Testing.
Convergent Validity and Reliability Resting There are two criteria for assessing whether the outer model .
easurement mode.
meets the requirements of convergent validity for reflective constructs, namely outer loading> 7, and average variance extracted (AVE)> 0.
5, then the items on the variable are considered to have sufficient convergent validity (Hair et al.
, 2.
(Abdillah & Jogiyanto, 2.
said that in conducting reliability tests in PLS there are two methods, namely Cronbach's alpha and composite reliability.
Cronbach's alpha measures the lower limit of the reliability value on an item, while composite reliability measures the true value of the reliability of a construct.
The reliability test is strengthened by the expected Cronbach's alpha value of 0.
70 on each indicator.
JOURNAL OF ACCOUNTING
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E-ISSN : 3090-2401 The Hypothesist Test The hypothesis in this study can be known from the calculation of the model using the PLS bootstrapping technique.
From the results of the bootstrapping calculation, the statistical t value of each relationship or path will be obtained.
This hypothesis testing is set with a significance level of 0.
The hypothesis can be accepted if the original sample value is in line with the hypothesis.
The results of the calculation for hypothesis testing in this study, using the direct effect of the independent variable on the dependent variable and the moderating variable obtained as follows:
Table 2.
Path Coefisient Hypotheses Prediction Original Sample (O) P Values IC -> PF
KSDM -> PF
IC*WS -> PF
KSDM*WS -> PF
Variable R-squared 0,968 Explanatory RA is used to measure the level of variation in changes in the independent variable on the dependent variable, and the path coefficient value shows the level of significance in hypothesis testing (Abdillah & Jogiyanto, 2.
The results of RA> 0.
67 for endogenous latent variables in the structural model indicate the influence of exogenous variables on endogenous variables in the good category.
If the result is 0.
67, it is in the medium category and if the result is 0.
33, it is in the weak category.
DISCUSSIONS