Reducing unethical behavior in SMEs using fraud triangle theory and anti-fraud technology: A case study from Medan City

Abstract

SMEs are vulnerable to fraudulent behavior from their employees. This research aims to analyze fraud risk factors and integrate anti-fraud information technology as a moderating variable to formulate fraud prevention strategies for SMEs. The study was conducted on SMEs in Medan City, specifically in the coffee shop sector, by distributing questionnaires to employees. Samples were selected using random sampling, and 161 respondents answered the questions. Data analysis used moderating regression analysis with an interaction test approach. This study reveals that only rationalization has a significant impact on fraud. Additionally, this research reveals an important finding that anti-fraud technology acts as a moderating variable in the relationship between opportunity and rationalization towards fraud. This finding indicates that anti-fraud technology plays a crucial role in fraud prevention. SMEs need to invest in information technology to strengthen internal controls by facilitating real-time tracking of employee activities, thereby creating a perception of oversight that can control rationalization and curb tendencies towards unethical actions.