An Experiment on Fraudulent Reporting: Internal Control versus Framing, Which one More Influencing?
Year: 2016
Type: article
Abstract: This research examines fraudulent reporting behavior in accounting context. It evaluates the impacts of internal control strength toward fraudulent reporting with the involvement of internal control framing. Internal control has been widely accepted as framework of fraud prevention. Nevertheless, internal control strength has inconsistently created unfavorable result in preventing fraud. Strengthened internal control is not always associated with lower fraud. This inconsistency addressed the existance of another variable that might mediate the relationship between internal control and fraudulent reporting. Internal control framing is predicted as a variable that may influence fraudulent reporting. Therefore, this research is aimed to observe the effect of internal control framing as the factor that comes from company towards the employee’s tendency of committing fraud. The 2 x 2 x 10 design experiment consists of 49 participants in experiment group and 11 participants in control group. A laboratory experiment with real rewards was conducted and analyzed using repeated measures ANOVA. Inconsistent with the previous research which mentioned the influence of interaction between internal control strength and framing towards fraudulent reporting, this research found the significant influence of framing toward fraudulent reporting is more than the influence of weak or strong internal control. Keywords: Fraudulent reporting, Internal control strength, Framing coordinating, Framing monitoring
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2464638303