Fraud is a serious issue for construction companies. Corruption, including bribery,
embezzlement and fraud cause construction costs to be significantly higher. The
construction sector is one of the most risky industries related to internal fraud because of
its nature. Thus, a strong mechanism for fraud prevention, detection and response is needed
to manage the fraud risk in a construction company. This research aimed to evaluate the
causes of fraud, to assess the maturity level of the fraud risk management and to develop a
fraud risk management framework in a construction company. This research used
qualitative methods with a case study approach in a construction company in Indonesia, to
analyze 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 the
causes of fraud, a fraud risk management maturity assessment and a fraud risk management
framework for a construction company.
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