Corruption prevention in organizational clustering in Indonesia: through the role of the HU-model in detecting corruption
| Date | 17 September 2024 |
| Pages | 60-75 |
| DOI | https://doi.org/10.1108/JMLC-10-2023-0163 |
| Published date | 17 September 2024 |
| Author | Haryono Umar,Rahima Purba,Magda Siahaan,Siti Safaria,Welda Mudiar,Markonah Markonah |
Corruption prevention in
organizational clustering in
Indonesia: through the role of the
HU-model in detecting corruption
Haryono Umar
Department of Accounting, Perbanas Institute, Jakarta, Indonesia
Rahima Purba
Department of Accounting, Panca Budi Development University, Medan, Indonesia
Magda Siahaan
Department of Accounting, Trisakti School of Management, Jakarta, Indonesia, and
Siti Safaria,Welda Mudiar and Markonah Markonah
Department of Accounting, Perbanas Institute, Jakarta, Indonesia
Abstract
Purpose –This paper aims to test the effectiveness of the Haryono Umar (HU)-model used in corruption
prevention strategies through corruption detection as a tool for detecting corruption because the mode of
corruption is increasingly dynamic and complex by focusing on the causes of corruption: pressure,
opportunity,rationalization, capabilityand lack of integrity.
Design/methodology/approach –The research uses multiple regression methods, classification and
regression trees and the HU-model application system developed by researchers. The research sample uses
secondary data from financialreports on the Indonesia stock exchange according to organizational clustering
(such as red,grey and green areas).
Findings –The research result showed that of the 470 sample companies, there were 445 companies, or
98.9%, in the red cluster (indicated corruption),19 companies, or 4.04, in the green clusters or not indicated
corruption andsix companies, or 1.28%, were included in the greycluster or potential corruption. By knowing
the cluster of an organization,efforts to prevent corruption can be made effective and efficient. Implementing
the HU-model proves that the amount of pressure,the abundance of opportunities, the ease of rationalization
and the highlevel of position and authority strengthen thedrive for corruption if there is a lack of integrity.
Research limitations/implications –Each internal organizationcan use this model independently and find
conditionsrelated to corruption so that they can immediatelytake action to prevent it.
Originality/value –The application of the HU-model is a discoveryin preventingcorruption by focusing on
the possibilityof corruption occurring in each organizationthrough organizational clustering.
Keywords HU-model, Detecting corruption, Corruption prevention, Organizational clustering
Paper type Research paper
© Haryono Umar, Rahima Purba, Magda Siahaan, Siti Safaria, Welda Mudiar and Markonah
Markonah. Published by Emerald P ublishing Limited . This article is publis hed under the Creative
Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create
derivative works of this article (for both commercial and non-commercial purposes), subject to full
attribution to the original publication and authors. The full terms of this licence may be seen at
http://creativecommons.org/licences/by/4.0/legalcode
JMLC
27,7
60
Journalof Money Laundering
Control
Vol.27 No. 7, 2024
pp. 60-75
EmeraldPublishing Limited
1368-5201
DOI 10.1108/JMLC-10-2023-0163
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
1. Introduction
Indonesia has determined that corruptionis an extraordinary crime, so it must be handled in
extraordinary ways. As an implementation of this policy, Indonesia issued Law Number 31
of 1999 in conjunction with Law Number 20 of 2001 concerning Corruption Crimes and
followed by Law Number 30 of 2003 concerning the Corruption Eradication Commission
(KPK), which Law later amended –Law Number 19 of 2019 concerningthe KPK.
Corruption occurs in many sectors that affect people’s lives, such as public services,
essential services, procurement of government goods and services, licensing and position
determination, from regional government to central government, starting from state-owned
companies/regional-owned companies (SOEs/ROEs) to the private sector. Transparency
International has stigmatized Indonesia as a corrupt country. It has been in the red category
for quite a long time, so it is very unprofitable for Indonesia, especially for its place in the
world economy.Empirical data shows that corruption cases are related to the management of
state and regional finances, especially in the implementation of procurement of government
goods and services, state spending and burden management.Law enforcement officials have
handled over 70% of corruption cases (KPK, Prosecutor’sOffice and Police) in recent years.
There are several significant cases, suchas the corruption case in the construction of the 4G
Base TransceiverStation Tower, with statelosses reaching 8tn rupiah and various other cases
(CNBCIndonesia,2023).
Corruption is a national problem that is very detrimental to national development and is
still widespread in managing state and regional finances, especially in implementing
government goods and services. Apart from the procurement of goods and services,
corruption also occurs in connection with bribery, extortion, gratification related to permits,
budget management, exploitation of natural resources, the buying and selling of positions
and buying and selling influence displayed by several executives, legislative and judicial
officials. Therefore, efforts to eradicate and prevent corruption must be carried out
extraordinarilyand as effectively and continuously as possible.
One effort is to detect corruption, which is very difficult because there is minimal
evidence of the perpetrators’actions,and they cover each other together and agree. However,
signals of deviant behaviourcan be seen in individual, organizational and external behaviour.
Signs of individual behaviour can be seen in changes in lifestyle, usually leaning towards a
more luxurious lifestyle. For organizational signs, some situations or conditions are not
conducive due to a weak internal control environment. Conditions that could be more
conducive can be characterized by odditiesor anomalies in the financial reports; in addition,
there are many complaints from outside the company, suppliers, partners, etc. Statement of
Auditing Standards No. 70 Auditing Standards (SA) Section316 by IAPI (2013) states that
deviations are triggeredby pressure or encouragement and an opportunity to commit fraud.
The factors that encourage fraud are presented by Cressey (1953) with a basic approach
called the fraud triangle, which has the components of pressure, opportunity and
rationalization. In 2004, Wolfe and Hermanson introduced the fourth factor, capability,
which became the fraud diamond. Furthermore,Umar (2016) developed research and added
afifth factor that causescorruption, namely, loss of integrity. It is explained that thereare five
causes of corruption: opportunity, pressure, rationalization, capability and lack of integrity.
So that efforts to detect corruption can be carried out effectively and efficiently, a detection
tool is needed, namely, the Haryono Umar (HU)-model (Umar, 2020). This model is
structured based on the components of opportunity, pressure, rationalization, capability and
lack of integrity,with secondary data that must be collectedby the auditor and included in the
model/application table. This data must be collected by the detector (detecting officer). It is
comprehensive secondarydata, which is then included in the formula.
Journal of Money
Laundering
Control
61
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