Determinants influencing fraud detection: Role of internal auditors’ quality
-
Author(s)Eka HariyaniLink to ORCID Index: https://orcid.org/0000-0003-2905-6289
,
Supriono SuprionoLink to ORCID Index: https://orcid.org/0000-0002-1200-9235
,
Rheny Afriana HanifLink to ORCID Index: https://orcid.org/0000-0003-0651-3862
,
Sem Paulus Silalahi
,
Meilda WigunaLink to ORCID Index: https://orcid.org/0000-0001-8313-7501
-
DOIhttp://dx.doi.org/10.21511/ppm.22(2).2024.05
-
Article InfoVolume 22 2024, Issue #2, pp. 51-60
- 455 Views
-
233 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Frequent occurrences of fraud take place due to poor fraud prevention and detection. The purpose of this study is to ascertain the impact of internal audit effectiveness and continued professional commitment to fraud detection with internal auditors’ quality as a moderating variable. Seventy-eight questionnaires were distributed to internal auditors and supervisors at the Inspectorate of Riau City, Indonesia, who had at least two years of experience. Structural equation modeling (SEM) 3.0 software was used for the data analysis. According to the study’s findings, the effectiveness of internal control (β = –0.932; p < 0.05) and the effectiveness of internal auditors (β = 1.149; p < 0.05) both have an impact on fraud detection. However, ongoing professional commitment (β = 0.069; p > 0.05) has no impact. Quality of internal auditors does not affect the relationship between the effectiveness of internal audits (β = –0.190; p > 0.05), the effectiveness of internal control (β = 0.114; p > 0.05), continued professional commitment (β = 0.018; p > 0.05), and fraud detection. The findings of this study can be used as guidance for management to enhance the performance of internal auditors and for considerations and assessments for fraud detection in the public sector.
- Keywords
-
JEL Classification (Paper profile tab)D23, M40, M41, M42
-
References43
-
Tables4
-
Figures0
-
- Table 1. Measurement of research variables
- Table 2. Descriptive statistics
- Table 3. Convergent validity and reliability
- Table 4. PLS Path algorithm and bootstrapping
-
- ACFE Indonesia. (2020). Riset Fraud Indonesia 2019 [The Indonesia fraud survey (IFS) 2019]. (In Indonesian).
- Agustina, F., Nurkholis, & Rusydi, M. K. (2021). Auditors’ professional skepticism and fraud detection. International Journal of Research in Business and Social Science, 10(4), 275-287.
- Allen, N. J., & Meyer, J. P. (1990). The measurement and antecedents of affective, continuance and normative commitment to the organization. Journal of Occupational Psychology, 63(1), 1-18.
- Anfusina, M. S., & Mappanyukki, R. (2020). The effect of morality, compensation, and professional commitment to fraudulent financial statements with rationalization as an intervening variable empirical study on SKPD South Tangerang City. International Journal of Asian Social Science, 10(9), 521-534.
- Arens, A. A., & Elder, R. J. (2011). Auditing and assurance service an integrated approach – An Indonesian adaptation (1st ed.). Salemba Empat.
- Aswar, K., Akbar, F. G., Wiguna, M., & Hariyani, E. (2021). Determinants of audit quality: Role of time budget pressure. Problems and Perspectives in Management, 19(2), 308-319.
- Aswar, K., Ermawati, E., Wiguna, M., & Hariyani, E. (2020). A conceptual framework on the audit quality in the government internal audit in Indonesia. Information Management and Business Review, 12(1(I)), 22-26.
- Atmaja, D. (2016). Pengaruh kompetensi, profesionalisme, dan pengalaman audit terhadap kemampuan auditor badan pemeriksa keuangan (BPK) dalam mendeteksi fraud dengan teknik audit berbantuan komputer (TABK) sebagai variabel moderasi [The influence of competency, professionalism and audit experience on the ability of financial audit agency auditors to detect fraud using computer-assisted audit techniques as a moderating variable]. Media Riset Akuntansi, Auditing & Informasi, 16(1), 53-68. (In Indonesian).
- Barzinji, Z. A. Q., Yusoff, D. W. S., Rosbi, M. S. B. M., Salleh, M. F. M., & Abdullah, A. H. (2022). The effect of forensic accounting on fraud prevention, the moderating role internal control effectiveness. International Journal of Economic, Commerce and Management, X(1), 213-230.
- Bubilek, O. (2017). Importance of internal audit and internal control in an organization – Case study (Thesis). ARCADA.
- COSO. (2019). COSO internal control – integrated framework: Implementation guide for the healthcare provider industry.
- Cressey, D. R. (1973). Other people’s money. Montclair: Patterson Smith.
- Drogalas, G., Pazarskis, M., Anagnostopoulou, E., & Papachristou, A. (2017). The effect of internal audit effectiveness, auditor responsibility and training in fraud detection. Journal of Accounting and Management Information Systems, 16(4), 434-454.
- Flowerastia, R. D., Trisnawati, E., & Budiono, H. (2021). Fraud awareness, internal control, and corporate governance on fraud prevention and detection. Proceedings of the International Conference on Economics, Business, Social, and Humanities (ICEBSH 2021) (pp. 235-242).
- González, T. F., & Guillén, M. (2008). Organizational commitment: A proposal for a wider ethical conceptualization of ‘normative commitment’. Journal of Business Ethics, 78(3), 401-414.
- Haladu, D. A. (2018). Fraud detection and internal control measures in deposit money banks listed on the NSE. International Journal of Science and Management Studies (IJSMS), 1(4), 43-54.
- Hamilah, H., Denny, D., & Handayani, E. (2019). The effect of professional education, experience and independence on the ability of internal auditors in detecting fraud in the pharmaceutical industry company in Central Jakarta. International Journal of Economics and Financial Issues, 9(5), 55-62.
- Hatuwe, R. S. M., Musa, M. N. D., Saling, & Marihi, L. O. (2022). Determinant of fraud detection on financial statement. Public Policy (Jurnal Aplikasi Kebijakan Publik & Bisnis), 3(1), 16-26.
- Heider, F. (1958). The psychology of interpersonal relations. New York: John Wiley & Sons.
- Hikmayah, N., & Aswar, K. (2020). The impact of factors on the audit quality in Indonesia: The moderating effect of professional commitments. International Journal of Academic Research in Accounting, Finance and Management Sciences, 9(4), 285-293.
- Indonesia Corruption Watch (ICW). (2021a). Indonesia Corruption Watch (Anti Korupsi).
- Indonesia Corruption Watch (ICW). (2021b, September 12). Tren penindakan kasus korupsi semester 1 tahun 2021. (In Indonesian).
- Kertarajasa, A. Y., Marwa, T., & Wahyudi, T. (2019). The effect of competence, experience, independence, due professional care, and auditor integrity on audit qualitiy with auditor ethics as moderating variable. Journal of Accounting Finance and Auditing Studies (JAFAS), 5(1), 80-99.
- Kontogeorgis, G. (2018). The role of internal audit function on corporate governance and management. International Journal of Accounting and Financial Reporting, 8(4), 100-114.
- La Ode, A., Wahyuniati, H., Angela, F., & Oktri, S. (2020). Auditor’s ability to detect fraud: Independence, audit experience, professional skepticism, and work load. Russian Journal of Agricultural and Socio-Economic Sciences, 107(11), 192-205.
- Mansor, T. M. T., Mohamad Ariff, A., & Hashim, H. A. (2020). Whistleblowing by auditors: The role of professional commitment and independence commitment. Managerial Auditing Journal, 35(8), 1033-1055.
- Narayana, A. A. S., & Ariyanto, D. (2020). Auditors experience as moderating effect investigative abilities and understanding of red flags on fraud detection. International Research Journal of Management, IT & Social Sciences, 7(1), 205-216.
- Nwaobia, A. N., Omotayo, I. I., & Ajibade, A. (2021). Internal audit and fraud detection in selected banks listed in Nigeria. Journal of Economics and Finance (IOSR-JEF), 12(4), 51-65.
- Octavia, E., Saudi, M. H., & Sinaga, O. (2021). Independence, professionalism and auditor’s ability in detecting fraud (PT. Telkom Bandung). Palarch’s Journal of Archaeology of Egypt/Egyptology, 17(10), 1178-1190.
- Prasetyo, S., Kamaliah, K., & Hanif, R. (2015). Pengaruh red flags, skeptisme profesional auditor, kompetensi, independensi, dan profesionalisme terhadap kemampuan auditor dalam mendeteksi kecurangan [The influence of red flags, auditor professional skepticism, competence, independence and professionalism on the auditor’s ability to detect fraud]. Jurnal Online Mahasiswa Fakultas Ekonomi Universitas Riau, 2(1), 33851. (In Indonesian).
- Pura, R. (2021). Pengaruh kompetensi auditor, komitmen profesional dan etika profesi terhadap perilaku disfungsional auditor [The influence of auditor competence, professional commitment and professional ethics on auditor dysfunctional behavior]. JABI (Jurnal Akuntansi Berkelanjutan Indonesia), 4(2), 204-217. (In Indonesian).
- Ramos, M., & West, L. (2003). Fraud detection in a GAAS audit: SAS no.99 implementation guide. AICPA – American Institute of Certified Public Accountants.
- Risanti, T. P., Aswar, K., Jumansyah, J., & Wirman, W. (2021). Determinants influencing the audit quality: Empirical evidence from Indonesia. Universal Journal of Accounting and Finance, 9(6), 1265-1272.
- Shonhadji, N., & Maulidi, A. (2022). Is it suitable for your local governments? A contingency theory-based analysis on the use of internal control in thwarting white-collar crime. Journal of Financial Crime, 29(2), 770-786.
- Solichin, M. (2020). Increasing capability of local government internal auditors in detecting fraud through strengthening professional commitments and organizational commitments. Proceedings of The First International Conference on Financial Forensics and Fraud. Bali, Indonesia.
- Standar Kompetensi Auditor. (2010). Peraturan Kepala BPKP NomorPER-211/K/JF/2010 [Regulation ofthe Head of BPKP Number PER-211/K/JF/2010]. (In Indonesian).
- Sudirman, S., Sasmita, H., Djabir D, M., Krisnanto, B., & Muchsidin, F. F. (2021). Effectiveness of internal audit in supporting internal control and prevention of fraud. Bongaya Journal for Research in Accounting (BJRA), 4(1), 8-15.
- The Institute of Internal Auditors (IIA). (2004). Institute of internal auditors.
- Transparency International. (2021). Corruption perceptions index.
- Tuanakotta, T. M. (2019). Audit internal berbasis risiko [Risk-based internal audit]. Salemba Empat. (In Indonesian).
- Umar, H., Erlina, Fauziah, A., & Purba, R. B. (2019). Audit quality determinants and the relation of fraud detection. International Journal of Civil Engineering and Technology (IJCIET), 10(3), 1447-1460.
- Wolfe, D. T., & Hermanson, D. R. (2004). The fraud diamond: Considering the four elements of fraud. The CPA Journal, 74(12), 38-42.
- Zainudin, A. D. P. A., Aswar, K., Lastiningsih, N., Sumardjo, M., & Taufik, T. (2021). Analysis of potential factors influencing audit quality: The moderating effect of time budget pressure. Problems and Perspective in Management Journal, 19(4), 519-529.
-
Perceived health risk, online retail ethics, and consumer behavior within online shopping during the COVID-19 pandemic
Yuniarti Fihartini ,
Arief Helmi ,
Meydia Hassan ,
Yevis Marty Oesman
doi: http://dx.doi.org/10.21511/im.17(3).2021.02
Innovative Marketing Volume 17, 2021 Issue #3 pp. 17-29 Views: 4453 Downloads: 1707 TO CITE АНОТАЦІЯThe risk of virus contracting during the COVID-19 pandemic has changed consumer preference for online shopping to meet their daily needs than shopping in brick-and-mortar stores. Online shopping presents a different environment, atmosphere, and experience. The possibility of ethical violations is higher during online than face-to-face transactions. Therefore, this study was conducted to investigate the influence of perceived health risk and customer perception of online retail ethics on consumer online shopping behavior during the COVID-19 pandemic, involving seven variables, namely perceived health risk, security, privacy, non-deception, reliability fulfillment, service recovery, and online shopping behavior. The data were collected through an online survey by employing the purposive sampling technique to a consumer who has shopped online during the COVID-19 pandemic in Indonesia. 315 valid responses were obtained and analyzed through quantitative method using SEM-Amos. The results showed that perceived health risk and four variables of online retail ethics including security, privacy, reliability fulfillment, and service recovery affected online shopping behavior. Meanwhile, non-deception was found to have an insignificant effect. The coefficient value proved perceived health risk to be more dominant in influencing online shopping behavior than the variables of online retail ethics. Thus, consumers pay more concern for their health during online shopping. However, positive consumer perceptions of the behavior of online retail websites in providing services also can encourage consumers to shop online during this pandemic.
-
Human resource management in promoting innovation and organizational performance
I Gede Riana ,
Gede Suparna ,
I Gusti Made Suwandana ,
Sebastian Kot 
,
Ismi Rajiani
doi: http://dx.doi.org/10.21511/ppm.18(1).2020.10
Problems and Perspectives in Management Volume 18, 2020 Issue #1 pp. 107-118 Views: 3495 Downloads: 825 TO CITE АНОТАЦІЯHuman resource management (HRM) is one of the elements enabling an organization to remain competitive in turbulence conditions. The effective practice of HRM makes competent and innovative employees contributing to the achievement of organizational objectives. This study aims to analyze HRM practices in creating innovation and organizational performance. The questionnaire was used to measure the respondents’ perceptions of variables used by a Likert scale. A survey of 126 manager samples and middle managers at export-oriented short and medium enterprises (SMEs) in Bali, Indonesia, was conducted to test the model. The analysis has shown that the proposed model was proven to be compliant with the research hypotheses. HRM significantly affects organizational performance and innovation, and it was found out that innovation can improve organizational performance. However, in the process of simultaneous testing, it was found out that innovation cannot improve organizational performance. The lack of attention to investments in human resources became one of the barriers to SMEs in creating innovation.
-
Green product buying intentions among young consumers: extending the application of theory of planned behavior
Andhy Setyawan ,
Noermijati Noermijati ,
Sunaryo Sunaryo ,
Siti Aisjah
doi: http://dx.doi.org/10.21511/ppm.16(2).2018.13
Problems and Perspectives in Management Volume 16, 2018 Issue #2 pp. 145-154 Views: 3260 Downloads: 1093 TO CITE АНОТАЦІЯThis research reveals the factors explaining the purchase intention toward green products among young consumers. Young consumers are beginner consumers who are going to play an important role to take a responsibility in preserving the environment. Theory of Planned Behavior (TPB) is selected as the main theoretical framework in this research alongside some other variables (environmental concern, environmental knowledge, and willingness to pay), which are added in the research model to expand TPB application. Three hundred and twenty-six respondents were interviewed through a survey and the data are analyzed using Structural Equation Modeling (SEM).
The findings illustrated that not every explanatory variable influenced the purchase intention toward green products among young consumers. Environmental concern and attitude did not influence the purchase intention toward green products among young consumers.
