The Role of Fraud Risk Assessment in Moderating the Influence of Ethical Sensitivity and Religiosity on Public Sector Financial Reports in, Indonesia

Financial reporting fraud remains a major challenge for the public sector in Indonesia, weakening fiscal accountability and eroding public trust. Therefore, individual moral attributes and their interaction with organizational mechanisms are very important to ensure that public sector financial reports are free from fraud. This article analyses ethical sensitivity and religiosity on public sector financial reports by placing fraud risk assessment as a moderator. By using a quantitative design, this research highlights that ethical sensitivity and religiosity are very important in preparing public sector financial reports. Sample data was collected from 400 public sector financial officials in Central Java, Indonesia, who were selected through purposive sampling. Data analysis uses Partial Least Squares Structural Equation Modelling (PLS-SEM). The research results show that ethical sensitivity and religiosity have a significant effect on reducing the tendency to defraud. Fraud risk assessment, at the same time, plays a pivotal role in strengthening those negative relationships, essentially pushing fraudulent behaviour further down. Taken together, these findings give solid empirical backing to the dual attribution framework, which basically argues that you cannot pull off effective fraud prevention by relying on just one side of the equation. It takes both; internal ethical inclinations and external organizational safeguards working in tandem, a kind of synchronized push from the inside out.