The role of the sosio-cultural context: analyzing causal factors and prevention strategies for fraud in Yogyakarta and Lombok

Fraud poses a critical threat to organizational accountability in Indonesia, primarily driven by external pressures and a permissive culture that condones unethical behavior, beyond mere control weaknesses. This study aimed to analyze these causal factors and formulate preventive strategies explicitly rooted in local sociocultural dynamics. The sample consisted of 102 auditors and law enforcement officers handling fraud cases. This study used a questionnaire to collect data, which was analyzed using factor analysis. The results indicated three main factors influencing fraud, including external pressure, culture and habits related to fraud, and motivation and financial needs. Preventive factors included the effectiveness of reporting and internal awareness, transparency and monitoring, control and compliance system, organizational integrity and ethical leadership. These findings suggested that cultural context played a significant role in shaping fraud patterns and prevention approaches. This study contributes to the literature on fraud prevention in developing countries and provides practical implications for policymakers in the sampled regions to integrate strengthening internal control systems and transparency with behavioral strategies focused on leadership integrity and anti-fraud awareness education to counter the normalization of fraud.