Abstract
Fraud prevention is the best effort to solve fraud problems. Minimizing opportunities can be one of the factors that needs to be considered to prevent fraud. This research aimed to analyze the effect minimization opportunity, which consists of several variables, specifically methods of prevention and detection of fraud, internal control, management policy and management integrity, to the prevention of fraud in point of view of the auditors of the Audit Board of the Republic of Indonesia and the local government internal auditors. Data collected by using a questionnaire. Usable sample consisted of 79 respondents. Data were tested using PLS. The research result declared that internal control is an effective factor to minimize opportunities to prevent fraud. Another finding from the study was that fraud prevention and detection methods were not able to reduce fraud. Instead, the fraud prevention and detection methods have a positive effect on the likelihood of fraud. The important thing that needs to be considered in future research is that the distribution of questionnaires to internal and external auditors can be carried out proportionally so that the perceptions of each party can be tested and compared.
Highlights
Fraud can be defined as intentional deception by concealing or misrepresenting information that has the consequences of endangering other people's financial interests and benefiting the perpetrator's financial interests
This research aimed to analyze the effect minimization opportunity, which consists of several variables, methods of prevention and detection of fraud, internal control, management policy and management integrity, to the prevention of fraud in point of view of the auditors of the Audit Board of the Republic of Indonesia and the local government internal auditors
By using the antithesis framework of the Fraud Triangle Theory, this study aims to analyze the effect of fraud prevention infrastructure, namely prevention and detection methods, internal control, management policies, and management integrity, to the fraud in government agencies in auditors’ perception
Summary
Fraud can be defined as intentional deception by concealing or misrepresenting information that has the consequences of endangering other people's financial interests and benefiting the perpetrator's financial interests. Corruption is defined as an inducement by an individual against a power holder in an inappropriate manner to abuse authority that would be detrimental to the interest of the other parties and provide financial benefit to the perpetrator. It is often associated with bribery (Rossouw et al, 2000). ACFE (2016) reports that the most common types of fraud in Indonesia are corruption (71%), assets misappropriation (31%), and fraudulent financial statements (4%). Even though the number of cases of fraud in the form of financial statement manipulation was the least, the largest loss incurred was $ 1000,000 (ACFE, 2016)
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