E ISSN: 2583-049X
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International Journal of Advanced Multidisciplinary Research and Studies

Volume 1, Issue 3, 2021

Fraud detection at Rural Credit Banks in Riau Province until the 2019 Financial Report



Author(s): Nicholas Renaldo, Sudarno, Suhardjo, Ienne Yoseria Putri, Suyono, Andi, Marice Boru Hutahuruk

Abstract:

The soundness level of Rural Credit Bank in Riau Province raises suspicions about whether it is a natural occurrence or there is fraud in its reporting. This study aims to detect accounting fraud at RCB in Riau Province. The sample in this study was 34 banks, with an analysis of Benford's Law first digit distribution. The results showed that 14 banks were indicated to have committed accounting fraud in financial report reporting with indications of mild to severe. The indication of fraud is not about the company experiencing a loss, but on the management of bank funds that are not used properly or there is manipulation for the benefit of internal management. Recommendations that can be given are for banks that are indicated to be able to improve internal control. The uniqueness of this research is the use of Benford's Law in assessing the quality of financial reports as well as the proven financial performance of several samples of rural credit banks that have actually gone bankrupt. Then indirectly these findings can use the Benford's Law method to detect early indications of company bankruptcy, especially in rural credit banks.


Keywords: Auditing, Fraud Detection, Benford's Law

Pages: 51-57

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