Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia

Research Article

The Effect of Obedience Pressure and Religiosity On Fraudulent Financial Reporting

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  • @INPROCEEDINGS{10.4108/eai.10-8-2022.2320824,
        author={Lu'lu' Nafiati and Rintan Nuzul Ainy},
        title={The Effect of Obedience Pressure and Religiosity On Fraudulent Financial Reporting},
        proceedings={Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia},
        publisher={EAI},
        proceedings_a={ICBAE},
        year={2022},
        month={8},
        keywords={obedience pressure; religiosity; fraudulent financial reporting; supernatural punishment hypothesis},
        doi={10.4108/eai.10-8-2022.2320824}
    }
    
  • Lu'lu' Nafiati
    Rintan Nuzul Ainy
    Year: 2022
    The Effect of Obedience Pressure and Religiosity On Fraudulent Financial Reporting
    ICBAE
    EAI
    DOI: 10.4108/eai.10-8-2022.2320824
Lu'lu' Nafiati1,*, Rintan Nuzul Ainy1
  • 1: Universitas Ahmad Dahlan
*Contact email: lulu.nafiati@act.uad.ac.id

Abstract

Financial reporting fraud is the least common type of fraud, but causes the most significant median loss of USD 1 billion. Given the magnitude of the impact of fraudulent financial reporting, academics need to understand the actions that can be used to reduce fraudulent financial reporting. This study examines the moderating effect of religiosity on the relationship between obedience pressure and fraudulent financial reporting behaviour among corporate managers. Previous research has shown that God's supervision and punishment and secular authorities can increase prosocial actions. Using an experimental study design, subjects were randomly assigned to two conditions of obedience pressure (none and present) and their level of religiosity was measured (low and high). The results of the study indicate that obedience pressure affects financial reporting fraudulent behaviour. Nevertheless, the effect of obedience pressure on fraudulent financial reporting behaviour can not be reduced under high religiosity. This paper differs from previous studies in that we examined fraudulent at the behavioural stage and no longer at the intention stage.