ROOT CAUSE ANALYSIS USING FRAUD PENTAGON THEORY APPROACH (A CONCEPTUAL FRAMEWORK)

Dona Ramadhan(1*),

(1) PT. Adira Dinamika Multi Finance
(*) Corresponding Author

Abstract


Fraud and corruption are two types of crimes that can harm others. According to Transparency International, the perceived level ofpublic sector corruption in Indonesia was ranked 89 out of 180 countries in the world in 2018. Seeing this condition, more attention should be paid to the prevention and deterrence process to reduce the more losses. This study aims to develop a conceptual framework for fraud prevention and deterrence by developing root cause analysis using the pentagon fraud approach. Through a literature review, researcher tries to combine root cause analysis with fraud pentagon, called RCA-FP Matrix (Root Cause Analysis - Fraud Pentagon Matrix) as an effective tool to prevent and deter fraud and corruption. This study also provides an example of the application of RCA-FP Matrix. First, determining the list of root causes associated with Fraud Pentagon; second, choosing one of the causes, as the root cause of fraud findings. In this study, fraud findings are calculated based on account numbers. Finally, the frequency of all causes can be counted, and the main root causes can be found. The results using the RCA-FP matrix show that there aredifferent dominant causes in different regions. Capability is the most frequent case in company-wide. The RCA-FP matrix can be applied in all types of industries and government agencies. As an anti-fraud measure, the RCA-FP Matrix can be adjusted according to the nature of the organization.

Keywords


Fraud, Root cause analysis, Fraud pentagon

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References


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DOI: http://dx.doi.org/10.21532/apfjournal.v5i1.142

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