Fraud Risk Mitigation through the Integration of Hindu Values
Evidence from the Village Credit Institution (LPD) of Kesiman
DOI:
https://doi.org/10.37329/ganaya.v8i4.4843Keywords:
Fraud, Risk Mitigation, Lembaga Perkreditan Desa (LPD), Hindu Teachings, Tattwa, Susila, Upacara, GovernanceAbstract
Fraud in community-based financial institutions like Lembaga Perkreditan Desa (LPD) is a serious threat to governance and financial integrity. This study examines how Hindu values are included in fraud risk management at LPD Kesiman. We used a qualitative descriptive approach and gathered data through interviews with managers, supervisors, and community leaders, supported by relevant documents. Following the COSO Fraud Risk Management Framework (2023), the findings show that integrating Tattwa (the belief in God as moral accountability), Susila (ethical conduct as internal control), and Upacara (rituals that promote collective honesty) greatly strengthens the fraud mitigation framework. The originality of this study lies in proposing a model that incorporates Hindu values into fraud risk management as a form of local wisdom, a topic that is rarely addressed in the literature. This shows that preventing fraud in community financial institutions requires both technical methods and the internalization of cultural and spiritual values.
References
Arka, I. W. (2022). Strengthening the Duties and Functions of Pecalang as Traditional Safety Tools in Bali. Awang Long Law Review, 5(1), 369.
Association of Certified Fraud Examiners. (2022). Report to the Nations: 2022 Global Study on Occupational Fraud and Abuse. Austin, TX: ACFE.
Ayu, N. N. S., Endiana, I. D. M., Susandya, A. A. B., & Apriada, K. (2021). The Role of Employee Ethical Behavior and Organizational Culture in Preventing Fraud at the LPD. PalArch’s Journal of Archaeology of Egypt/Egyptology, 18(8), 916–929.
Ayuni, N. M. S., & Budiasni, N. W. N. (2020). The Implementation of Profit Sharing at Lembaga Perkreditan Desa. International Journal of Social Science and Business, 4(3), 472.
Braun, V., & Clarke, V. (2006). Using Thematic Analysis in Psychology. Qualitative Research in Psychology, 3(2), 77–101.
Braun, V., & Clarke, V. (2021). One Size Fits All? What Counts as Quality Practice in (Reflexive) Thematic Analysis? Qualitative Research in Psychology, 18(3), 328–352.
Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2023). Fraud Risk Management Guide. Durham, NC: COSO.
Cressey, D. R. (1953). Other People’s Money: A Study in the Social Psychology of Embezzlement. Glencoe, IL: Free Press.
Creswell, J. W., & Creswell, J. D. (2018). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches (5th ed.). Thousand Oaks, CA: SAGE Publications.
Creswell, J. W., & Poth, C. N. (2018). Qualitative Inquiry and Research Design: Choosing Among Five Approaches (4th ed.). Thousand Oaks, CA: SAGE Publications.
Detikcom. (2022, August 10). LPD Ungasan Rugi Rp 26 Miliar, Eks Ketua Jadi Tersangka Korupsi. Detik Bali. https://www.detik.com/bali/berita/d-6226728/lpd-ungasan-rugi-rp-26-miliar-eks-ketua-jadi-tersangka-korupsi
Dewi, N. K. U. K., & Rahajeng, D. K. (2022). Internalisasi Tri Hita Karana dalam Usaha Pencegahan Fraud pada Lembaga Perkreditan Desa (LPD) Bali Indonesia. ABIS: Accounting and Business Information Systems Journal, 9(4).
Dorminey, J., Fleming, A. S., Kranacher, M., & Riley, R. A. (2012). The Evolution of Fraud Theory. Issues in Accounting Education, 27(2), 555–579.
Free, C., & Murphy, P. R. (2015). The Ties That Bind: The Decision to Co-offend in Fraud. Contemporary Accounting Research, 32(1), 18–54.
Kompas. (2022, December 17). Kredit Fiktif Rp 10,4 Miliar, Ketua LPD di Bali Jadi Tersangka. Kompas Regional. https://denpasar.kompas.com/read/2024/12/17/ 114910278/kredit-fiktif-rp-104-miliar-ketua-lpd-di-bali-jadi-tersangka
Lokanan, M. E. (2015). Challenges to the Fraud Triangle: Questions on Its Usefulness. Accounting Forum, 39(3), 201–224.
Martini, N. P. R., Sudarma, M., Purwanti, L., & Adib, N. (2023). Fraud Prevention by Integrating Tri Hita Karana Value as Organizational Culture. In Proceedings of the 2nd International Interdisciplinary Conference on Environmental Sciences and Sustainable Developments (IICESSD EGE 2022) (pp. 509–515). Paris: Atlantis Press.
Merdeka. (2022, October 5). Polisi Bali Tetapkan Ketua LPD Adat Gulingan Tersangka Korupsi Rp 30 Miliar. Merdeka.com. https://www.merdeka.com/peristiwa/polisi-bali-tetapkan-ketua-lpd-adat-gulingan-tersangka-korupsi-rp30-miliar.html
Miles, M. B., Huberman, A. M., & Saldaña, J. (2019). Qualitative Data Analysis: A Methods Sourcebook (4th ed.). Thousand Oaks, CA: SAGE Publications.
Morales, J., Gendron, Y., & Guénin-Paracini, H. (2014). The Construction of the Risky Individual and Vigilant Organization: A Genealogy of the Fraud Triangle. Accounting, Organizations and Society, 39(3), 170–194.
Nawaz, T., & Haniffa, R. (2017). Determinants of Financial Performance of Islamic Banks: An Intellectual Capital Perspective. Journal of Islamic Accounting and Business Research, 8(2), 130–142.
Ratten, V., & Dana, L. P. (2017). Indigenous, Ethnic, and Cultural Entrepreneurship: A Literature Review. International Journal of Entrepreneurial Behavior & Research, 23(5), 734–759.
Saputra, K. A. K., Mu’ah, M., Jurana, J., Korompis, C. W., & Manurung, D. T. H. (2022). Fraud Prevention Determinants: A Balinese Cultural Overview. Australasian Accounting, Business and Finance Journal, 16(3), 1–15.
Tannis, L. N., & De Bruin, R. (2020). Cultural Embeddedness and Financial Governance in Community-Based Financial Institutions. Journal of Co-operative Organization and Management, 8(2), 100114.
Uddin, S., & Choudhury, J. (2008). Rationality, Traditionalism and the State of Corporate Governance Mechanisms: Illustrations From a Less Developed Country. Accounting, Auditing & Accountability Journal, 21(7), 1026–1051.
Vousinas, G. L. (2019). Advancing Theory of Fraud: The S.C.O.R.E. Model. Journal of Financial Crime, 26(1), 372–381.
Wolfe, D. T., & Hermanson, D. R. (2004). The Fraud Diamond: Considering the Four Elements of Fraud. The CPA Journal, 74(12), 38–42.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Ni Luh Putu Uttari Premananda (Author); Ni Made Rai Kristina; Putu Riska Wulandari, Astrid Krisdayanthi, Putu Ossi Widiari (Author); Md. Yudyantara Risadi; I Made Indra Widiatmika (Author)
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
An author who publishes in the Ganaya : Jurnal Ilmu Sosial dan Humaniora agrees to the following terms:
- Author retains the copyright and grants the journal the right of first publication of the work simultaneously licensed under the Creative Commons Attribution-ShareAlike 4.0 License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal
- Author is able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book) with the acknowledgement of its initial publication in this journal.
- Author is permitted and encouraged to post his/her work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of the published work (See The Effect of Open Access).
Read more about the Creative Commons Attribution-ShareAlike 4.0 Licence here: https://creativecommons.org/licenses/by-sa/4.0/.
