The effect of individual morality, information asymmetry and organizational culture on the tendency of accounting fraud

This study aims to determine the effect of individual morality, information asymmetry and organizational culture on fraud tendencies. This research was conducted at LPD in Kerambitan District. The research method used in this study is a quantitative research method with primary data obtained from questionnaire data as measured by a Likert scale. The population of this study were LPD employees in Kerambitan District, while the sampling method used was purposive sampling with a total sample of 114 respondents. Data analysis used multiple linear regression using SPSS 26. Based on the results of the study, it was shown that individual morality has a negative influence on the tendency of accounting fraud. Information asymmetry has a positive effect on the tendency of accounting fraud. Organizational culture has a negative effect on the tendency of accounting fraud. The advice that researchers can give is to internal supervisory bodies (panureksa) give warnings or sanctions to employees who have bad morals and do not apply organizational culture and always supervise the preparation of financial reports to minimize fraud in the preparation of financial reports.


Introduction
The attention of global business players has been focused on the dynamics of accounting fraud. Opportunities, technological advances, and business growth all contribute to the occurrence of fraud in organizations at all levels. According to the Association of Certified Fraud Examiners (ACFE), fraud is defined as an attempt to carry out illegal acts with the intention of gaining profit, such as sending false financial reports to certain individuals or organizations. Both inside and outside the company, people commit fraud with the intention of satisfying their own needs or the needs of groups, causing harm to many people [1]. Fraud can occur anywhere, not only in bank financial institutions but can also occur in non-bank financial institutions. Accounting fraud is usually caused by several supporting factors. This can be illustrated by the fraud triangle theory proposed by Cressey (1953).
Financial institutions in Bali, especially in the Pakraman Village environment where all activities and management are carried out by the Pakraman Village are called Village Credit Institutions. Desa Pakraman is a village term or designation in Bali. The former governor, Ida Bagus Mantra, was the initiator of the LPD, where the idea was later set forth in the Governor's Decree (SK) No. 972 of 1984, LPD as an alternative to support the economic development of indigenous village communities. LPD is a financial body whose management is in the hands of Desa Pakraman with the aim of supporting the interests of krama desa, this statement is stated in the Regional Regulation of Bali Province Number 3 of 2017 Article 1. Institutions that guarantee legal protection regarding customer funds stored in LPD are not explained in Perda Number 3 of 2017. If bankruptcy or fraud occurs at the LPD, it is very unlikely that the customer's funds will be returned, unless the Desa Pakraman is willing to take responsibility for this. The LPD is protected by awig-awig (rules made by villagers that only apply in that village) to regulate LPD governance because the LPD is a non-bank institution owned by Desa Pakraman [2].
During the 2019-2021 period, eight LPDs in Tabanan Regency managed to revive after a long period of suspended animation (inactivity). Currently in Tabanan there are 311 LPDs from 349 traditional villages as of March 2023, with total assets of IDR 2.1 trillion as of November 2022 [3]. An unhealthy LPD is caused by cases of fraud within the LPD itself, where internal parties abuse their authority and responsibilities. The following are several cases of misuse of LPD funds that occurred in several LPDs in Bali: Agency theory is able to state the contractual relationship between the agent and the principal. The contractual relationship in question is one or more contracts involving more than one agent to be able to perform certain services for them by delegating decision-making power to the agent [4]. Agency relationships can cause two types of problems, namely differences in goals and information asymmetry between agents and principals. Agency theory contains the goal of solving problems that occur in agency relationships regarding contracts between agents and principals. The contractual relationship with the LPD involves a delegation of authority to internal parties or the LPD manager (agent) as an extension of the village community (principal).
Accounting fraud can be caused by many factors. Individual morality is indicated as a factor causing accounting fraud in financial service institutions, one of which is the LPD. Individual morality is part of the individual itself, where in the individual has embedded traits that can influence the reasoning and even the individual's actions [5].
Another factor that causes fraud is information asymmetry [9]. Information asymmetry is a condition of information imbalance, in which one party has more information than the other party, so it is possible that one party will take advantage of the other party.
In addition to the factors described above, organizational culture is also one of the factors causing accounting fraud. Organizational culture is something that differentiates between companies or organizations that contain certain characteristics and are used as a reference within the company or organization [1].
There is a research gap in this study, the results of research on LPD in Buleleng Regency state that individual morality has a negative impact on the tendency to cheat [6]. Research conducted by Clain [7] at the Universities of the United States and France, also shows the results that moral identity or morality influences the likelihood of a violation occurring. However, contrary to the results of research on the Ambon City Government, the results did not show any influence between individual morality and the tendency to cheat [8]. The results of research in the Utan District, Sumbawa Regency stated that information asymmetry had a positive impact on accounting fraud [10]. This research is also reinforced by research conducted by Putri [11] which proves that there is a positive influence between information asymmetry and the tendency of accounting fraud when conducting research at BUMD Surakarta City. However, contrary to the findings of research on insurance companies in Bengkulu City, this study did not find any influence between information asymmetry and accounting fraud [9]. The results of research on LPDs in Buleleng Regency state that organizational culture has a negative impact on fraud tendencies [6]. Research conducted by Moses [12] on companies listed on the Nigerian stock market also shows the results that corporate culture and fraud have a negative influence or relationship. However, contrary to the findings of research in villages in Dharmasraya District, this study did not find any influence between organizational culture and accounting fraud tendencies [1].
Based on the background description, the authors are interested in discussing "The Influence of Individual Morality, Information Asymmetry and Organizational Culture on the Tendency of Accounting Fraud at LPD in Kerambitan District". Agency theory Agency theory is able to state the contractual relationship between the agent and the principal, which is one or more contracts involving more than one agent in order to perform certain services for them by delegating decision-making power to the agent [4]. Delegation of authority will cause more access to information about the company owned by the manager (agent) than the information owned by the owner (principal) or vice versa, with this it will trigger an information gap between the agent and the principal which is called information asymmetry. Opportunities to commit fraud or rule violations will arise if there is a gap in the information held between the agent and the principal.

Kohlberg's Theory of Moral Reasoning
Moral behavior is based on moral reasoning capacity, there are three levels of moral development that can be identified in a person, including pre-conventional, conventional, and post-conventional [13]. Individuals with a low level of moral reasoning tend to take actions that only benefit themselves, in contrast to individuals who have a high level of moral reasoning where individuals will be honest in all their actions or actions. In this study, the morality of LPD employees, both low and high, is closely related to acts of fraud, employees with low levels of moral reasoning have the opportunity to tend to commit fraudulent behavior or do things that benefit them when under pressure. In contrast, LPD employees who act with a high level of moral reasoning focus on the interests of those around them and base their actions on ethical principles [6].

Theory Fraud Triangle
Fraud triangle is a theory capable of explaining the three main causes of fraudulent financial reporting in companies [14]. Fraud Triangle Theory explains that opportunity or opportunity and rationalization factors can be the reason why an employee decides to commit fraud, opportunity, and the desire to gain benefits for oneself can motivate someone to commit fraud. In addition, leaders who do not pay special attention to the psychological state of their employees, result in employees who are under pressure, such as being in debt or lacking money, so they are motivated to cheat at work [8].

The Influence of Individual Morality on the Tendency of Accounting Fraud
Individual morality is indicated as a factor causing accounting fraud in financial service institutions, one of which is the LPD. Individual morality is part of the individual itself, where in the individual has embedded traits that can influence the reasoning and even the individual's actions [5]. This statement is in accordance with the research findings of Pujayani [6], hypotheses that can be proposed based on the explanations and results of previous research, namely: H1: Individual morality has a negative effect on the tendency of accounting fraud. The Effect of Information Asymmetry on the Tendency of Accounting Fraud Information asymmetry occurs when one party has more knowledge than the other, allowing that party to take advantage of the other party [9]. In accordance with agency theory, access to company information that is greater from the agent compared to the principal or vice versa will trigger an information gap between the two parties. This statement is in accordance with the research findings of Komala [10], hypotheses that can be proposed based on the explanations and results of previous research, namely: H2: Information asymmetry has a positive effect on the tendency of accounting fraud The Influence of Organizational Culture on the Tendency of Accounting Fraud Organizational culture is something that differentiates between companies or organizations that contain certain characteristics and are used as a reference within the company or organization [1]. The application of a good organizational culture will also have a good impact on the effectiveness of organizational management so that it can reduce the occurrence of fraudulent tendencies. Good individual character can be formed from the application of a good organizational culture [6]. This statement is in accordance with the research findings of Pujayani [6], hypotheses that can be proposed based on the explanations and results of previous research, namely: H3: Organizational culture has a negative effect on the tendency of accounting fraud.

Method
This research was conducted at the LPD in Kerambitan District, Tabanan Regency. This location was chosen because there was a case of fraud in one of the LPD in Kerambitan Sub-District, namely the LPD Desa Adat Tubang. LPD employees in Kerambitan District as a population with a total of 119 employees and a total of 27 LPD units. Purposive sampling was chosen as the sampling method because the samples were taken from sources that were deliberately identified or selected according to certain criteria, with a sample of 114 people. The criteria for determining the sample are as follows: 1) Employees at LPD in Kerambitan District who are still actively working 2) LPD employees who have worked for at least 1 year 3) LPD employees who are directly related to the financial management or financial activities of the LPD The samples in this study included the chairman, secretary, treasurer, administration, accounting department, credit department, savings collector, and cashier. The sample in this study uses employees who have a direct relationship with the financial activities of the LPD, it is possible that these employees can commit fraud because they play a direct role in managing the LPD's finances. As an example of a savings collector, a collector who collects money from the public or a customer who wants to save may not hand over the money to an authorized LPD employee and not record it.
This study uses a questionnaire as one of the two data collection methods. Questionnaires were distributed to LPD employees in Kerambitan District who met the criteria, the questionnaire contained written statements using a Likert scale with a range of values 1 (strongly disagree), 2 (disagree), 3 (neutral), 4 (agree), and 5 (strongly agree). The second technique uses interviews, interviews were conducted with one of the LPD in Kerambitan District. The dependent variable in this study is the tendency to cheat, while the independent variables in this study are individual morality, information asymmetry and organizational culture. The fraud tendency variable is measured by indicators (1) create a culture of honesty, openness and mutual assistance, (2) honest recruitment process, (3) fraud awareness training, (4) positive work environment, (5) clear code of ethics, easy to understand, and obey, (6) an assistance program for employees who are in trouble, and (7) instill the impression that every act of fraud will be penalized [15]. Individual morality variables are measured by indicators of the level of moral reasoning, (1) pre-conventional, (2) conventional, and (3) post-conventional [10]. The information asymmetry variable is measured by indicators, (1) employees have better information on organizational activities, (2) employees understand more about what they want to achieve, (3) employees know more about input-output relationships, (4) employees know more about work potential, (5) employees know more about the technical work, and (6) employees know more about external factors [9]. Organizational culture variables are measured by indicators, (1) visible role models, (2) components of ethical expectations, (3) ethical training, (4) punishments for ethical actions, and (5) ethical protection mechanisms [9]. Data analysis using multiple linear regression.  Individual morality, information asymmetry, and organizational culture can all be explained by a constant coefficient value of 98.518 in the regression equation, which means that if these three variables are set to zero (0), then the tendency to cheat will increase. The regression coefficient value for morality is -0.799, so an increase in the morality variable can reduce the tendency to cheat. The information asymmetry regression coefficient is 0.367, which indicates that an increase in this variable can lead to a higher tendency to cheat. The regression coefficient of organizational culture is -0.597, indicating that an increase in this variable can reduce the tendency to cheat.

Determination Coefficient Test
The adjusted coefficient of determination (R2) test result is 0.506. This analysis shows that individual morality, information asymmetry, and organizational culture contribute 50.6% of the variance of fraud tendencies. While other factors not included in this study contributed 49.4%.

Model Feasibility Test (F Test)
The calculated F value from the model feasibility test (F test) is 39.507 > F table 2.69, with a sig value of 0.000 indicating statistical significance. This shows that model testing is possible and hypothesis verification can be continued with a 5% confidence level.

The Effect of Individual Morality on the Tendency of Accounting Fraud
Partially, the t test was used to compare the significance of t with α (0.05). Individual morality significance value 0.000 < α (0.05) and t count -4.308 > t table -1.981 means that H0 is rejected and H1 can be accepted, it is proven that individual morality can have a negative and significant influence on accounting fraud tendencies.
Low or high levels of individual moral reasoning affect the tendency to cheat, this is in accordance with the level of moral reasoning theory put forward by Kohlberg. The lower the morale of an individual, the greater the opportunity for the individual to commit fraud. Apart from having responsibility towards LPD customers or the village community, individuals also have awareness and fear of God, which causes these individuals to have high morale and integrity at work. In relation to agency theory, if the leader's morale is good, information related to LPD management will be conveyed to subordinates or even the public in a transparent or actual situation. That way, fraud in the LPD can be minimized and even prevented. This is in line with the findings of Pujayani [6] who examined LPDs in Buleleng Regency and found that individual morality had a negative impact on the tendency to cheat. This research is also strengthened by research conducted by Putri [11] which proves that there is a negative influence between individual morality and the tendency for accounting fraud when conducting research at BUMD Surakarta City. The same results were also obtained by Komala [10] when conducting research in Utan District, Sumbawa Regency, there was a negative effect between individual morality and the tendency of accounting fraud. That is, the better the morale of the individual, the opportunity to commit acts of fraud can be minimized.

The Effect of Information Asymmetry on the Tendency of Accounting Fraud
Partially, the t test was used to compare the significance of t with α (0.05). Information asymmetry significance value 0.043 <α(0.05) and t count 2.043 > t table 1.981 means that H0 is rejected and H2 can be accepted, it is proven that information asymmetry can have a positive and significant influence on accounting fraud tendencies.
This lack of information means that LPD staff and management may be tempted to commit fraud by providing wrong financial data to LPD customers and the local community. However, this can be prevented if the LPD manager implements transparency on all matters related to LPD management. Then hold regular meetings between LPD managers and external LPD parties or customers to discuss LPD management and evaluate if it is felt that the performance of employees or LPD managers is lacking or not even as it should be. This is in line with agency theory, where there is more access to information about companies owned by LPD managers (agents) than information held by owners or external parties (principals) or vice versa which will trigger an information gap between agents and principals.
In line with research conducted by Pujayani and Dewi (2021) on LPDs in Buleleng Regency found that information asymmetry has a positive influence on the tendency of accounting fraud This research is also reinforced by research conducted [11] which proves that there is a positive influence between information asymmetry and the tendency for accounting fraud when conducting research at BUMD Surakarta City. The same results were also obtained [10] when conducting research in Utan District, Sumbawa Regency, there was a positive influence between information asymmetry and the tendency of accounting fraud. That is, the lower the information imbalance or information asymmetry, the lower the opportunity to commit fraud.

The Influence of Organizational Culture on the Tendency of Accounting Fraud
Partially, the t test was used to compare the significance of t with α (0.05). Organizational culture significance value 0.012 < α (0.05) and t count -2.550 > t table -1.981 means that H0 is rejected and H3 is acceptable, it is proven that organizational culture can have a negative and significant influence on accounting fraud tendencies.
One of the factors that can influence fraud is organizational culture, an organizational culture that can be implemented properly will reduce the space for employees to commit fraud. The application of organizational culture in LPD is like one of the indicators for measuring organizational culture, namely visible role capital, meaning that leaders are used as role models in acting. The role of the leader in creating organizational culture is very important, if the behavior or actions of the leader are good then employees tend to follow it. Looking at the results of the questionnaires that have been distributed to LPD employees, the most widely approved indicator is a visible role model, or the leader is used as a role model in acting because the behavior of the leader can also determine the direction of the actions of subordinates. The results of this study were reinforced by information from one of the employees at the Serongga Traditional Village LPD, Mr. Agus stated that a good leader will produce a good culture within the organization. In accordance with the facts on the ground, employees work according to the leadership's way of working. According to the fraud triangle theory, there are three motivations or causes that cause people to commit fraud, wrong justification (rationalization). Justification (rationalization) is a characteristic or ethical value that allows management and employees to act fraudulently thereby being in a dishonest environment. Organizational culture can serve as a moral compass, influencing employees to make moral decisions in all situations. In relation to agency theory, if the leader is used as a reference in acting, the leader must reflect an honest attitude at work, both in conveying information about LPD management and working according to the duties or jobdesk of each employee.
The findings of this study are in line with the findings of Pujayani [6] who examined LPDs in Buleleng Regency and found that organizational culture had a negative impact on the tendency of accounting fraud. This research is also reinforced by research conducted by Halimatusyadiah [9], which proves that there is a negative influence between organizational culture and the tendency for accounting fraud when conducting research on insurance companies in Bengkulu City. The same results were obtained by Dewi [5] when conducting research on Savings and Loans Cooperatives in Tegalalang District, there was a negative influence between organizational culture and accounting fraud. That is, the better the implementation of organizational culture, the lower the opportunity to commit acts of fraud.

Conclusion
This study draws conclusions regarding the influence of individual morality, information asymmetry, and organizational culture on accounting fraud tendencies. According to agency theory, individual morality is a factor that influences the tendency of accounting fraud. With high individual morality, LPD employees will always be honest or not commit fraud in compiling financial reports, so that later they will be able to present quality financial reports to those who need financial reports.
Information asymmetry in accordance with agency theory is a factor that influences the tendency of accounting fraud. Having access to information that is known to more LPD employees than customers or the public will provide opportunities for LPD employees to commit fraud.
Organizational culture according to agency theory is a factor that influences the tendency of accounting fraud. The implementation of an organizational culture that is already running well will make LPD employees always follow the regulations that apply in the company in preparing financial reports, so that later they will be able to present quality financial reports to those who need financial reports.
The limitations of the research are that it was only carried out on the LPD in the Kerambitan District and only used three variables. It is recommended for future researchers to develop research areas and select research variables, for example conducting research on LPDs in Tabanan Regency or even LPDs in Bali and being able to examine and examine more deeply other factors not discussed in this study that can influence the tendency to cheat. While many other factors, such as internal control variables and compliance with accounting rules, also affect the likelihood of accounting fraud.