Ethical values and auditors fraud tendency perception: testing of fraud pentagon theory
ISSN: 1359-0790
Article publication date: 28 June 2022
Issue publication date: 24 May 2023
Abstract
Purpose
This study aims to examine the fraud tendency on the perception of external auditors triggered by five components of the fraud pentagon: pressure (P), opportunity (O), rationalization (R), competence (C) and arrogance (A). In addition, ethical values (EV) are placed as a moderating variable for this relationship.
Design/methodology/approach
This is a quantitative study with a survey to external auditors around Indonesia. A moderation model for a research framework was developed to investigate the moderating role of ethical values.
Findings
The findings have shown that the five components of the fraud pentagon theory are not fully proven as triggers of fraud in the perception of external auditors. Only C and A have a significant value in influencing the perception of fraud tendency (PFT). Other findings also provide evidence that EV moderate the relationship between C and A to PFT. This shows that EV can be used as an anti-fraud strategy in the external auditor environment.
Originality/value
The originality of this paper is one of the first study that examines the fraud pentagon theory in the field of behavioral accounting. In addition, this paper contributes to the integration of ethical values as an anti-fraud strategy in the external auditor environment.
Keywords
Acknowledgements
The first author gratefully acknowledges for the financial assistance from Beasiswa Pendidikan Indonesia (BPI) of the Indonesian Ministry of Education and Culture for international publications.
Corrigendum: It has come to the attention of the publisher of the Journal of Financial Crime that the following article by Sahla, W.A. and Ardianto, A. (2023), “Ethical values and auditors fraud tendency perception: testing of fraud pentagon theory”, published in the Journal of Financial Crime, Vol. 30, No. 4, pp. 966-982, https://doi.org/10.1108/JFC-04-2022-0086, incorrectly referenced an article listed there as Higson, R.K.A. (2012), “Froud triangle”, Journal of Emerging Trends in Economics and Management Sciences, Vol. 3, No. 3, pp. 191-195; the correct reference is Kassem, R. and Higson, A. (2012), The New Fraud Triangle Model, Journal of Emerging Trends in Economics and Management Sciences, Vol. 3, No. 3, pp. 191-195.
The two cited instances within the text should appear as Kassem and Higson (2012), and not Higson (2012), on pages 969 and 971.
The authors sincerely apologise to the readers for any inconvenience caused.
Citation
Sahla, W.A. and Ardianto, A. (2023), "Ethical values and auditors fraud tendency perception: testing of fraud pentagon theory", Journal of Financial Crime, Vol. 30 No. 4, pp. 966-982. https://doi.org/10.1108/JFC-04-2022-0086
Publisher
:Emerald Publishing Limited
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