Fraud Detection (From the public accountant perspective)

Abstract

Fraud cases and financial statements manipulation have been increasing in the past five years, and surprisingly, even well-known public accounting firms in the world had been involved in several cases. Public were starting to have doubt about the audit quality, whereas the auditor profession’s existence depended on public trust as a stakeholder of the profession. The purpose of this research was to examine the influence of audit experience, the ability to assess fraud risk, and professional skepticism on the success of external auditors in detecting fraud. The independent variables were audit experience, the ability to assess fraud risk, and professional skepticism, and the dependent variable in this research was the success of external auditor to detect fraud. The method used in this research was the analytical descriptive method using the survey approach. The survey has been applied to 92 auditors in Jakarta, Indonesia, as the respondents. Collecting data was conducted by questionnaire and the data was analyzed using path analysis. The results of the research show that audit experience, the ability to assess fraud risk, and professional skepticism significantly, both simultaneously and partially, influence on the success of external auditor to detect fraud. Keywords—fraud detection; audit experience; fraud risk; professional skepticism