The Impact Of Unethical Behavior On Financial Management Fraud: Moderation Of Internal Control Systems

Abstract

This study examines the impact of unethical behavior on village financial management fraud, with internal control systems (ICS) as a moderating variable. Using an explanatory quantitative approach, data was collected from 70 village financial supervisors in Sukosari and Gemarang, Madiun Regency, through questionnaires. Multiple linear regression and Moderated Regression Analysis (MRA) show that unethical behavior has a positive and significant effect on financial management fraud. Furthermore, ICS was found to significantly moderate this relationship, where strong ICS can weaken the negative impact of unethical behavior on fraud. These findings support the validity of the Fraud Hexagon Theory in the context of village governance and provide practical implicationsfor strengthening village financial governance