SUSTAINABLE HUMAN DEVELOPMENT AND FRAUD PREVENTION IN FINANCIAL REPORTING : INSIGHTS FROM INDONESIA

Abstract

This study examines the critical nexus between sustainable human development (SHD) and fraud prevention in financial reporting within Indonesia’s socio-economic context, guided by Human Capital Theory (HCT). Despite Indonesia’s progress in human development indicators (HDI), regional disparities persist, and financial reporting fraud remains a significant challenge, undermining transparency and economic stability. While prior research has focused on regulatory and governance factors, this study addresses a gap by investigating how investments in education, health, and skill development—core tenets of HCT—can mitigate fraud risks and enhance financial reporting quality.  Using a qualitative narrative review methodology, this research synthesizes existing literature to analyse the interplay between SHD and financial integrity. Key findings reveal that: higher education levels, health and income stability and regional HDI disparities. The study underscores the need for policy interventions that integrate SHD into financial governance, such as targeted education reforms, ethical training, and equitable resource allocation. By aligning anti-fraud strategies with Indonesia’s Sustainable Development Goals (SDGs), this research offers actionable recommendations to strengthen public financial management.