Whistleblowing and fraud in digital era

Abstract

Whistleblowing of fraud in the digital era in Indonesia has shifted from the traditional way into a digital system. Digital whistleblowing allows someone to reveal a number of information accompanied by photos/ videos through social media/ other online sources. It is assumed that there is a possibility that the information is inaccurate. This study discusses financial statement fraud using artificial intelligence (AI) technology. The analysis was done by firstly using a literature study. Besides that, observation of the phenomenon of fraud cases that recently hit SOEs in Indonesia was also done. Then, it was increasingly discussed in depth by reading the media (online, either website or social media). In the next step, this study looked for references such as journals, books, and news in electronic media related to this paper. Results showed that Fraud often happens that the customer initially only gives a complaint through the company’s social media, but in the end, it is used as whistleblowing by external parties. Therefore, suggestions can be by open complaints on social media, which can spread quickly, should be handled by the company well so that the company’s image can be maintained. Furthermore, whistleblowers require commitment from management starting from the lowest management to the highest management because it is related to whistleblower protection rules that include a guarantee of security, fairness, and continuity of work in the organization. An effective Whistleblowing system requires the right system/ management and procedures so that the reporters and the witnesses feel safe and their safety is guaranteed.

Keywords

• whistleblowing
• fraud
• good corporate governance
• artificial neural network