Abstract
This study aims to examine the effect of competence, independence, experience, and audit time pressure on fraud detection by using the mediation of professional skepticism in the context of internal auditors for the public sector. The research data were obtained through a survey questionnaire on 173 auditors of the Inspectorate General of the Ministry of Education and Culture. The analysis technique in this study used Partial Least Square (PLS). The results showed that competence, independence and audit time pressure had no effect on the ability to detect fraud. Meanwhile, the auditor's experience and professional skepticism had a positive effect on fraud detection. The application of professional skepticism was proven as a mediating variable in the effect of competence, independence, experience and audit time pressure on fraud detection. Auditors’ competence, independence, and experience had a positive effect on professional skepticism and audit time pressure had a negative effect on professional skepticism. The results of this study provide an input that the importance of applying professional skepticism could improve fraud detection.
Highlights
Corruption has remained a national issue in recent years
The results showed that professional skepticism could bridge the effect of auditors’ competence on fraud detection
The results showed that professional skepticism could bridge the effect of auditors’ independence on fraud detection
Summary
Corruption has remained a national issue in recent years. The Corruption Perceptions Index data for 2020 showed that Indonesia has experienced a decline in both its position and score. Data on the Trends in Corruption Enforcement in 2019 showed that there were 271 cases of corruption in Indonesia with total state losses of IDR 8.4 trillion (Indonesia Corruption Watch, 2020). Compared to the previous year's data, there was an increase in the amount of state losses of IDR 2.8 Trillion (Indonesia Corruption Watch, 2020). Through the mapping of corruption cases based on the actors, the highest corruption rank was from government staffs. This showed that the highest rate of corruption is in the public sector. The high rate of corruption in the public sector requires the role of the government internal auditors to be able to detect the occurrence of fraud and be able to provide useful recommendations to organizations to prevent fraud
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