Mediation Effects of Moral Reasoning and Integrity in Organizational Ethical Culture on Accounting Fraud Prevention

Title : Mediation Effects of Moral Reasoning and Integrity in Organizational Ethical Culture on Accounting Fraud Prevention

Authors:
1. Hidayatul Khusnah
2. Noorlailie Soewarno

Department : Accounting

Journal Name : ABAC Journal

Kinds of Journal : Q4

Keywords: Organizational ethical culture, moral reasoning, integrity, prevention of accounting fraud.

ABSTRACT

This study aims to investigate the mediating effect of moral reasoning and integrity on the effect of ethical organizational culture on the prevention of accounting fraud. This study also examines the effects of ethical organizational culture, moral reasoning, and integrity in accounting for fraud prevention. This research was conducted at the BPKP (Financial and Development Supervisory Agency) of East Java Province, BPKP is a government agency that oversees the use of budget allocations for regional development. Data was collected from a sample of 84 respondents. The data analysis technique in this study consisted of partial least squares analysis. The results of the hypothesis testing discovered positive influence of ethical organizational culture on moral reasoning and employee integrity. In contrast, there was no statistical support for the effect of ethical organizational culture on preventing accounting fraud. The main finding in this study is that moral reasoning and integrity positively affect the prevention of accounting fraud, indicating that ethical and moral culture can change employees' perspectives by allowing them to distinguish good work behavior from poor or wrongful work behavior.

For details : http://www.assumptionjournal.au.edu/index.php/abacjournal/article/view/5781