BEHAVIORAL CAPABILITY, INTERNAL CONTROL WEAKNESSES, AND ASSET MISAPPROPRIATION: THE MODERATING ROLE OF FRAUD CONTROL ENVIRONMENT 11 7
DOI:
https://doi.org/10.26623/jreb.v19i2.15488Keywords:
Asset Misappropriation, Behavioral Capability, Fraud Control Environment, Internal Control WeaknessesAbstract
This study examines the effects of behavioral capability and internal control weaknesses on asset misappropriation, while investigating the moderating role of the Fraud Control Environment. Drawing upon Attribution Theory and the Fraud Diamond Theory, the study argues that individuals with higher behavioral capability and organizations with weaker internal controls are more likely to experience asset misappropriation. Furthermore, a well-established Fraud Control Environment is expected to strengthen the relationships between these determinants and asset misappropriation by shaping employees' behavioral responses toward fraud prevention mechanisms. The research employs a quantitative explanatory approach using primary data collected through questionnaires administered to employees involved in financial management, asset administration, and internal control activities within public sector organizations. The proposed model is analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The findings are expected to demonstrate that behavioral capability and internal control weaknesses positively influence asset misappropriation. In addition, the Fraud Control Environment is predicted to strengthen both relationships, indicating that fraud prevention policies and organizational control culture significantly influence employees' behavioral tendencies toward asset misuse. These findings contribute to behavioral accounting literature by integrating individual behavioral factors with organizational fraud control mechanisms in explaining asset misappropriation.
References
Abdullahi, R., & Mansor, N. (2015). Fraud triangle theory and fraud diamond theory: Understanding the convergent and divergent for future research. International Journal of Academic Research in Accounting, Finance and Management Sciences, 5(4), 38–45.
Albrecht, W. S., Albrecht, C. C., Albrecht, C. O., & Zimbelman, M. F. (2021). Fraud examination (7th ed.). Cengage Learning.
Arens, A. A., Elder, R. J., & Hogan, C. E. (2020). Auditing and assurance services (17th ed.). Pearson.
Darsono, D., Ratmono, D., Putri, E. R. P., Cahyonowati, N., & Lee, S. (2024). An empirical analysis of asset misappropriation fraud during the COVID-19 crisis. Problems and Perspectives in Management, 22(3), 314–325. https://doi.org/10.21511/ppm.22(3).2024.25
Ghozali, I. (2021). Partial Least Squares: Konsep, Teknik, dan Aplikasi Menggunakan SmartPLS 4.0 (4th ed.). Badan Penerbit Universitas Diponegoro.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3rd ed.). Sage Publications.
Heider, F. (1958). The Psychology of Interpersonal Relations. Wiley.
Indarto, I., & Prawihatmi, C. Y. (2021). Faktor-faktor pendorong minat wirausaha startup. Jurnal Riset Ekonomi dan Bisnis, 14(3), 207–221. https://doi.org/10.26623/jreb.v14i3.4534
Indarto, I., Santoso, D., & Prawihatmi, C. Y. (2020). Model kewirausahaan strategik pada usaha ekonomi kreatif. Jurnal Riset Ekonomi dan Bisnis, 13(3), 223–235. https://doi.org/10.26623/jreb.v13i3.3150
Jones, E. F., & Higson, A. (2021). Occupational fraud prevention in public sector organizations. Journal of Financial Crime, 28(4), 1054–1070.
Kassem, R., & Higson, A. (2019). The new fraud triangle model. Journal of Emerging Trends in Economics and Management Sciences, 3(4), 191–195.
Kelley, H. H. (1973). The Processes of Causal Attribution. American Psychologist.
Permata Putri, E. R., & Ratmono, D. (2025). Penyalahgunaan aset di sektor publik: Perspektif perilaku aparatur. Jurnal Akuntansi Indonesia.
Siregar, S. V., & Tenoyo, B. (2021). Internal control effectiveness and occupational fraud in government institutions. Journal of Financial Crime, 28(2), 524–541.
Sugiyono. (2022). Metode Penelitian Kuantitatif, Kualitatif, dan R&D (3rd ed.). Alfabeta.
Utami, Y. L., Rakhmayani, A., Imtichana, D. O., & Hajar, N. (2021). Determinants of asset misappropriation by employees from the new fraud triangle perspective. International Journal of Economics, Business and Accounting Research, 5(2), 752–765.
Vousinas, G. L. (2019). Advancing theory of fraud: The S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381.
Wahyudi, T., Kalsum, U., Mukhtaruddin, M., & Safitri, R. H. (2026). Integrity as a contingency in asset misappropriation: Behavioral and fraud risk perspectives. Integrated Journal of Business and Economics, 10(2).
Weiner, B. (1985). An attributional theory of achievement motivation and emotion. Psychological Review, 92(4), 548–573.
Wolfe, D. T., & Hermanson, D. R. (2004). The fraud diamond: Considering the four elements of fraud. CPA Journal, 74(12), 38–42.
Yusrianti, H., Ghozali, I., & Yuyetta, E. N. (2020). Asset misappropriation tendency: Rationalization, financial pressure, and the role of opportunity in Indonesian government institutions. Humanities & Social Sciences Reviews, 8(1), 373–382.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Zati RIzka Fadhila, Mirna Dyah Praptitorini, Anisa Kusumawardani, Astohar, Jhefni Emerton Bureni
This work is licensed under a Creative Commons Attribution 4.0 International License.
The journal holds the copyright for each article published with work licensed simultaneously under a Creative Commons Attribution 4.0 International License, which allows others to share the work with an acknowledgment of the authorship and early publication of the work in this journal.
