Webology, Volume 19, Number 1, January, 2022 5455 http://www.webology.org Internal Control System between Fraud Asset Management and Local Governance: A Social and Organizational Perspective Abdul Pattawe* Universitas Tadulako, Palu, Indonesia. Nurhayati Haris Universitas Tadulako, Palu, Indonesia. Muhammad Natsir Universitas Tadulako, Palu, Indonesia. Jamaluddin Universitas Tadulako, Palu, Indonesia. Masruddin Universitas Tadulako, Palu, Indonesia. Muhammad Din Universitas Tadulako, Palu, Indonesia. Andri Gustama Larija Universitas Tadulako, Palu, Indonesia. Received October 06, 2021; Accepted December 23, 2021 ISSN: 1735-188X DOI: 10.14704/WEB/V19I1/WEB19366 Abstract This study aims to examine the effects of peer influence and outcome expectancies on fraud in local government asset management. This study is also to analyze moderating effect of the internal control system between peer influence and outcome expectancies on the fraudulent behavior. By utilizing purposive sampling method to obtain data from government units of Palu City and by using PLS with the help of WarpPLS software, the results show that peer influence has a positive effect on fraudulent behavior, while outcome Expectancies have a negative effect on the fraudulent behavior. Moreover, internal control system is able to moderate the influence of peer influence and outcome expectancies against fraudulent behavior. The results would imply that strong internal control system is more likely able to reduce or weaken the influence of peer influence on fraudulent behavior.