Law of Karma Phala on Potential Financial Management Fraud: Testing of Hexagon Fraud Element

Abstract

This study aims to analyze the effect of the six fraud hexagon elements (pressure, opportunity, rationalization, competence, arrogance and collusion) on potential fraud, as well as test whether belief in Karma Phala weakens the influence of the six fraud hexagon elements on the potential fraud. The population in this research were all village apparatus in Badung district. The sampling criteria in this study used a saturated sample technique. The data used in this study are primary data obtained through questionnaires and then analyzed using SEM-PLS.The results of the study show that pressure, opportunity, rationalization, competence, arrogance and collusion have a positive effect on the potential for fraud in village financial management. Meanwhile, belief in the law of Karma Phala only weakens the positive effect of arrogance on the potential for fraudulent village financial management, but does not weaken the positive influence of pressure, opportunity, rationalization, competence and collusion on the potential fraud. Keywords: fraud hexagon, belief in the law of Karma Phala, village financial management.