Enhancing Fraud Deterrence in Local Governments: The Role of Internal Controls and E-Procurement in Indonesia

Authors: Koenta Adji Koerniawan orcid logo (Telkom University, Bandung, Indonesia) , Ferdio Ghifary Fidhien orcid logo (Telkom University, Bandung, Indonesia; TISSA, Universiti Utara Malaysia (UUM), Sintok, Kedah, Malaysia) , Afidhiena Raisyan Nisa orcid logo (Merdeka University, Malang, Indonesia; Doctoral Program in Accounting, State University of Malang, Malang, Indonesia) , Alfido Fiqri Arsy Adhiem orcid logo (Merdeka University, Malang, Indonesia) , Suyatno Ladiqi orcid logo (Universiti Sultan Zainal Abidin, Terengganu, Malaysia)

  • Enhancing Fraud Deterrence in Local Governments: The Role of Internal Controls and E-Procurement in Indonesia

    Enhancing Fraud Deterrence in Local Governments: The Role of Internal Controls and E-Procurement in Indonesia

    Authors: , , , ,

Options

Abstract

This study examines the role of internal control systems (SPIP) and e-procurement in strengthening fraud deterrence within Indonesian local governments. Using data collected from 55 public-sector officials across multiple districts in Java, the study employs multiple regression analysis to assess both the individual and combined effects of these governance mechanisms. The findings reveal that SPIP and e-procurement have a significant positive impact on fraud deterrence, both individually and simultaneously. The model explains approximately 66.9% of the variance in fraud deterrence, indicating a substantial contribution of governance mechanisms in reducing fraud risk. However, the results also highlight that the effectiveness of these systems depends on the quality of implementation, monitoring practices, and organisational commitment. By incorporating the Fraud Deterrence Propeller (DETERE) framework, this study extends prior research by conceptualising fraud deterrence as an integrated governance mechanism rather than a purely preventive approach. The findings provide both theoretical and practical insights to strengthen institutional accountability and enhance anti-corruption strategies in decentralised government settings.

Keywords: Internal Control System (SPIP), E-Procurement, Fraud Deterrence, Public Sector Governance, Indonesia

How to Cite:

Koerniawan, K. A., Fidhien, F. G., Nisa, A. R., Adhiem, A. F. & Ladiqi, S., (2026) “Enhancing Fraud Deterrence in Local Governments: The Role of Internal Controls and E-Procurement in Indonesia”, Australasian Accounting, Business and Finance Journal 20(2): 6, 94–110. doi: https://doi.org/10.14453/aabfj.v20i2.06

Rights: In Copyright

Downloads:
Download PDF

19 Views

3 Downloads

Published on
2026-07-15

Peer Reviewed

License

CC BY-NC-SA 4.0