Internal control systems, risk management, and fraud prevention in indonesian regional financial management

Salomi Jacomina Hehanussa (Universitas Kristen Indonesia Maluku)

JRTI (Jurnal Riset Tindakan Indonesia)
Vol. 11 No. 2 (2026): JRTI (Jurnal Riset Tindakan Indonesia)

This study examines how internal control systems and risk management are linked to fraud prevention in Indonesian regional financial management through a qualitative integrative literature review rather than causal estimation. The revised corpus comprises 42 sources: 16 regulations, professional standards, or official reports and 26 scholarly works. Sources were purposively selected from official repositories, publisher pages, DOI records, and academic indexes using four criteria: direct relevance to the focal constructs, traceable bibliographic identity, methodological or normative authority, and contribution to mechanism explanation. Unverifiable metadata, duplicate materials, popular opinion, and statistical claims without an original source were excluded. Source-type-specific appraisal assessed provenance and scope for official materials and design transparency, construct relevance, and stated limitations for scholarly studies. A pre-specified codebook guided extraction and deductive-inductive coding, followed by cross-source triangulation, pattern matching, negative-case analysis, and explanation building. Official statistics are used only as contextual signals and are not treated as comparable fraud outcomes: Indonesia’s 2024 National Integrity Index was 71.53 and remained in the vulnerable category; the Audit Board reported 491 unmodified, 53 qualified, and one disclaimer opinion for 545 local government financial statements for fiscal year 2024; and the ACFE global benchmark reported that 43% of occupational fraud cases were initially detected through tips. The synthesis indicates that internal controls restrict opportunity and improve traceability, while risk management strengthens anticipatory identification and prioritisation of fraud scenarios. These mechanisms are most credible when risk sensing is translated into controls that are actually executed, tested, and improved. The study develops the Regional Financial Risk-Control and Antifraud Integration Model (MIPRA-KD), consisting of risk sensing, risk-calibrated control response, behavioural integrity, digital traceability, and an assurance-learning loop. It provides a diagnostic typology, testable propositions, and measurable implementation indicators while explicitly limiting inference to qualitative, mechanism-based conclusions.