The Role of Morality in Moderating the Effect of Cash Internal Control and Financial Pressure on Fraud Tendency

I G A N Alit Sumantri; Ni Putu Budiadnyani; Putu Pande R. Aprilyani Dewi; I G A A Pramita Indraswari; Ni Putu Eva Yuni Poniari

Authors

I G A N Alit Sumantri Universitas Pendidikan Nasional, Indonesia
Ni Putu Budiadnyani Universitas Pendidikan Nasional, Indonesia
Putu Pande R. Aprilyani Dewi Universitas Pendidikan Nasional, Indonesia
I G A A Pramita Indraswari Universitas Pendidikan Nasional, Indonesia
Ni Putu Eva Yuni Poniari Universitas Pendidikan Nasional, Indonesia

Keywords:

morality, Cash Internal Control, Financial Pressure, Fraud Tendency

Abstract

This study examines how morality affects the influence of cash internal controls and financial pressure on accounting fraud tendencies. Accounting fraud, a dishonest practice in financial reporting or management, can harm an organization's accountability and related parties. Understanding the contributing factors is crucial for effective fraud prevention and detection. This paper investigates how an individual's moral values impact the relationship between cash internal controls, financial pressure, and the propensity for fraudulent actions. By exploring morality's moderating role, the study aims to inform comprehensive strategies to mitigate accounting fraud. Using survey data from financial professionals, regression analysis showed that strong cash internal controls can reduce fraud tendencies, but this effect weakens under high financial pressure. Importantly, individuals with a stronger moral compass are less likely to engage in fraud, even when facing financial pressure. These findings underscore the critical role of personal ethics and integrity in shaping fraud-related decision-making. The implications can guide policymakers, organizational leaders, and the financial community in promoting ethical practices and deterring fraudulent activities.

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