Assessment of Maturity Level and Development of Risk Management Framework for Fraud Risk in Construction Company

Abstract:

Cost overruns is a serious issue for construction companies, including in Indonesia. Fraud is one of the main causes of construction projects experiencing cost overruns. Corruption, including bribery, embezzlement, and fraud causes construction costs to be significantly higher. This research aimed to evaluate the causes of fraud, to assess the maturity level of the fraud risk management, and to develop fraud risk management framework in a construction company in Indonesia. This research used qualitative methods to analyse primary data obtained from interviews and observations, and secondary data obtained from a literature review. Using the fraud triangle theory to identify the cause of fraud risks, the fraud risk management maturity model by EY to assess the fraud risk management maturity level, and the fraud risk management concept by KPMG to develop a fraud risk management framework, this research provided three results: A study of causes of fraud, fraud risk management maturity assessment, and fraud risk management framework for a construction company.

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