Purpose: The purpose of this study is to analyze the relationship between Rationalization and Financial Pressure on Asset Misappropriation Tendency by mediating Opportunity in the Indonesian government sector based on the Fraud Triangle perspective.

Methodology: The Population of this study was Indonesian government employees. The Sample method was Purposive Sampling and the survey method was direct surveys, postal mail, and online surveys. The number of respondents was 363 and analyzed using Structural Equation Model with AMOS-based covariance.

Main Findings: The results show that financial pressure, rationalization, and opportunity had a significant positive effect on Asset Misappropriation Tendency. Furthermore, Opportunity mediates the relationship between rationalizations on Asset Misappropriation Tendency; However, Opportunity does not mediate the relationship between Financial Pressure and Asset Misappropriation Tendency.

Implications: This study contributes to the literature on asset misappropriation in the government sector which is rather very limited and supports the Fraud Triangle Theory. It also has several practical implications for being a source of information to formulate policies in fraud prevention and detection that will improve management control systems in the government sector a developing country.

Novelty: A limited study of asset misappropriation in the government sector in a developing country that examines the influence of element strength of Fraud Triangle in Asset Misappropriation which has been criticized by previous researchers.


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