The efficacy of control environment as fraud deterrence in local government

Abstract In a globalised scenario, the topic of an enormous increase of malfeasance in the local governments, posing catastrophic threats which come from vicious bureaucratic apparatus, becomes a global phenomenon. This current study uses case study material on the risk management control system spe...

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Bibliographic Details
Published inManagement & Marketing Vol. 12; no. 4; pp. 591 - 613
Main Authors Nuswantara, Dian Anita, Maulidi, Ach
Format Journal Article
LanguageEnglish
Published Bucharest De Gruyter Poland 01.12.2017
Sciendo
Subjects
contingency theory
control environment
Fraud prevention
Local government
malfeasance
Management controls
Indonesia
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Summary:Abstract In a globalised scenario, the topic of an enormous increase of malfeasance in the local governments, posing catastrophic threats which come from vicious bureaucratic apparatus, becomes a global phenomenon. This current study uses case study material on the risk management control system specially the control environment in Indonesia local governments to extend existing theory by developing a contingency theory for the public sector. Within local government, contingency theory has emerged as a lens for exploring the links between public sector initiatives to improve risk mitigation and the structure of the control system. The case illustrates that the discretion of control environment - the encouragement of a local government’s control environment - is considered as a springboard for fraud deterrence and might be the loopholes in the government control systems.
ISSN:1842-0206
1842-0206
2069-8887
DOI:10.1515/mmcks-2017-0035