Examining the role of artificial intelligence in auditing and fraud detection: The moderating effect of machine learning within accounting information systems

This study aims to examine and analyze the effect of internal audit and accounting information systems on the automotive trading company PT. Kars Inti Amanah provides a perspective for the management of similar companies about internal audit and accounting information systems' power to increase internal control effectiveness. The population in this study were all employees of PT. Kars Inti Amanah, amounting to 67 people, were then sampled using a simple random sampling technique so that 40 samples were selected; this study uses a quantitative approach with descriptive statistical analysis to map the value of respondents' answers and multiple lien regression analysis to examine the influence between internal audit variables and accounting information systems on the effectiveness of internal control. The descriptive statistical analysis results show the overall value of the products that internal audit and accounting information systems have a positive and significant effect on the effectiveness of internal control at PT. Kars Inti Amanah.

This study is a quantitative study that aims to examine the effect of forensic audit, auditor professionalism, and organizational commitment on fraud detection. This study uses auditors in the Main Investigation Auditorat of the Supreme Audit Agency of the Republic of Indonesia (BPK RI) as a sample. Saturated sampling was used in sampling and used primary data through a questionnaire which obtained a total of 37 auditors. The analysis technique in this study uses Structural Equation Modeling - Partially Least Square (SEM-PLS) using WarpPLS software version 8.0 and a significance level of 5% (0.05). The results of the test show that (1) forensic audit and auditor professionalism have a significant influence on fraud detection and (2) organizational commitment does not have a significant effect on fraud detection.Keywords: Forensic Audit; Auditor Professionalism; Organizational Commitment; Fraud Detection This study is a quantitative study that aims to examine the effect of forensic audit, auditor professionalism, and organizational commitment on fraud detection. This study uses auditors in the Main Investigation Auditorat of the Supreme Audit Agency of the Republic of Indonesia (BPK RI) as a sample. Saturated sampling was used in sampling and used primary data through a questionnaire which obtained a total of 37 auditors. The analysis technique in this study uses Structural Equation Modeling - Partially Least Square (SEM-PLS) using WarpPLS software version 8.0 and a significance level of 5% (0.05). The results of the test show that (1) forensic audit and auditor professionalism have a significant influence on fraud detection and (2) organizational commitment does not have a significant effect on fraud detection. Keywords: Forensic Audit; Auditor Professionalism; Organizational Commitment; Fraud Detection

The purpose of this study was to examine the effect of fraud prevention, detection, investigative audits, and professionalism of auditor on efforts to minimize fraud in financial statements. This study uses primary data by using questionnaires where the questionnaires are distributed to internal auditors who work in companies in Makassar City, Indonesia. Sample determination was done by using convenience sampling. The number of respondents in this study were 52 internal auditors. Data analysis to test the hypothesis was done by using multiple regression test. The results of this study indicate that partially, preventive measures and professionalism of auditor have significant effect on efforts to minimize fraud, while partially fraud detection and investigative audits have no significant effect on efforts to minimize fraud. However, simultaneously, the four variables of fraud prevention, detection, investigative audit, and professionalism of auditor have a significant effect on effort to minimize fraud.

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.

This study aims to examine and analyze the effect of internal audit and accounting information systems on the automotive trading company PT. Kars Inti Amanah provides a perspective for the management of similar companies about internal audit and accounting information systems' power to increase internal control effectiveness. The population in this study were all employees of PT. Kars Inti Amanah, amounting to 67 people, were then sampled using a simple random sampling technique so that 40 samples were selected; this study uses a quantitative approach with descriptive statistical analysis to map the value of respondents' answers and multiple lien regression analysis to examine the influence between internal audit variables and accounting information systems on the effectiveness of internal control. The descriptive statistical analysis results show the overall value of the products that internal audit and accounting information systems have a positive and significant effect on the effectiveness of internal control at PT. Kars Inti Amanah.

This study aims to identify the effect of internal audit quality, the use of information technology, management support, and the implementation of SPI guidelines on the effectiveness of internal audits in preventing and detecting fraud. Quantitative research using the Partial Least Squares-Structural Equation Modeling (PLS-SEM) method was conducted on 385 hospital internal auditors from all over Indonesia through online questionnaires filled out on Google Forms. The results of hypothesis testing with a Two-Tailed T-Test on the PLS-SEM inner model construct concluded that the variables of guideline implementation, audit quality, and management support have a significant influence on the effectiveness of internal audits in preventing and detecting fraud. The application of guidelines has a very high influence on the effectiveness of internal audits in preventing and detecting fraud at the structural level. Coefficient of Determination testing shows that the joint effect of audit quality, the use of information technology, management support, and the implementation of guidelines has a high effect on the effectiveness of internal audits in preventing and detecting fraud. This study provides practical implications for hospitals to improve audit quality, utilize information technology, enhance management support, and implement SPI organizational guidelines in the internal audit process to encourage internal audit effectiveness in fraud prevention and detection. Further research is expected to be developed by examining other factors that can affect the effectiveness of internal audits in preventing and detecting fraud.

The study investigates the impact of whistle-blowing, forensic audit, and investigative audit on fraud detection, with gender and experience serving as potential moderators. Structured equation modeling (SEM) is used to study the relationships between determinants. This study also seeks to understand the role of gender and experience in determining fraud detection through multigroup analysis. The data used for the analysis includes 97 auditors from the Supreme Audit Agency (BPK RI) and the Financial and Development Supervisory Agency (BPKP) who work in the investigation unit. The findings reveal that whistle-blowing positively and significantly influences forensic audit, investigative audit, and, ultimately, fraud detection. Both forensic and investigative audits also exhibit positive and significant impacts on fraud detection. Moderation effects of gender and experience were not observed in the relationships between whistle-blowing and the aforementioned audits or fraud detection. These findings suggest that the implementation of whistle-blowing systems can facilitate fraud reporting, improve early warning for fraud detection, and function as an effective oversight tool to prevent internal violations in government institutions. This study contributes valuable empirical evidence regarding the interplay between whistle-blowing, forensic and investigative audits, fraud detection, and the moderating roles of gender and experience. It effectively addresses knowledge gaps and offers potential contributions to existing theories, particularly concerning the nuanced influence of gender and experience on fraud detection.

This study chiefly makes an attempt to look at the result of accounting information system (AIS) on detection of fraud, with the use of control as a moderator. the information gathered from 225 staff of Jordanian banks were analyzed with PLS 3, and therefore the results show the necessary role of control on the linkage between AIS and detection of fraud among the examined banks. AIS and detection of fraud are absolutely and considerably correlate. The outcomes obtained are a valuable addition to the literature concerning factors impacting detection of fraud in countries in geographical region as well as Jordan. This study conjointly brings further justification for the scrutiny of AIS and internal controls potency.

Internal auditing is generally referred to as an independent, objective assuring and consulting activity that is developed to contribute to the operational value and enhancement. It assists in achieving the objectives of the organization through a systematic, disciplined method of evaluation and enhancing the effectiveness of risk management control and governance processes. More specifically, an internal review is utilized for the assessment of the efficiency and the effectiveness of audit office performance. The function provides enhancement functions to controls, mitigates risks and encourages the achievement of successful practices. In relation to this, the present paper aimed to determine the effect of internal review on the audit efficiency and effectiveness by using a quantitative method, where data was gathered with the help of a questionnaire. The study population comprise of the federal board of supreme audit headquarters in Iraq, from which a selected sample numbering 123 auditors were selected. The findings showed that (IR) significantly affected the efficiency and effectiveness of public sector auditing in Iraq. Keywords Internal review, efficiency and effectiveness of auditing, Federal Board of Supreme Audit of Iraq.

This study examines accounting information systems (AIS) alignment and its effective factors in the context of manufacturing companies in industries of food and beverage, sugar, materials and pharmaceutical companies listed in Tehran Stock Exchange (TSE), in Iran. Strategic alignment is very important in increasing company's performance, however, few studies have been made to investigate the factors that affect alignment and therefore, in this study we aimed to identify different levels of AIS alignment of Iranian companies and then investigated the factors that affect in this alignment. We defined AIS alignment as adoption between AIS requirements and AIS capacity. Using a questionnaire, data from 81 companies (include their financial and executive managers) were gathered on nineteen accounting information specifications for both requirements and capacity of AIS. We applied moderation view for fitness between these two items. Then cluster analysis was applied to categorize companies in two groups of aligned and unaligned. The study then investigated some factors that might be related to AIS alignment. Findings indicate that AIS alignment was related to level of manager’s accounting and IT knowledge; usage of accounting and audit firms as external experts of AIS; and usage of internal IT staff. The company size is also related to AIS alignment. It is important for companies to consider these effective factors on their AIS alignment so that opportunities can be recognized to improve AIS alignment that support their information needs in competitive environment.

Book Review

In recent years, there have been growing concerns about the adequacy of internal controls within local government institutions in Zambia, including the Lusaka City Council. Instances of financial irregularities, resource misallocation, and operational inefficiencies have highlighted the need for a comprehensive assessment of the internal audit function. Despite Lusaka City Council having a well-established internal audit function, they seem to be irregularities which are still appearing and these are in growing tendency, during the period of five years between 2018 to 2022 Lusaka City Council has failed to collect revenue which the council had budget for amounting K480 million. In this regard, this study evaluated the effectiveness of internal audit in risk management at Lusaka City Council using a self-administered questionnaires by assessing the Audit Committee, Segregation of Duties, Data Security and Information Technology in Internal Audit, and Risk Assessment. Analysis of Variance (ANOVA) was used to create whether there was difference between the independent variables and effectiveness of the internal audit at the Lusaka City Council. Analyzing the effectiveness of the Audit Committee, Reduced Audit Queries, and Enhanced Revenue Collection on internal audit controls at Lusaka City Council. The model showed a significant effect overall, with a p-value of .029 (Sig. = .029). This indicated that, collectively, the predictors significantly contribute to explaining the variance in internal audit controls. The F-value of 3.896 reflects the model’s strength in predicting internal audit controls, while the Regression Sum of Squares (4.163) and Mean Square (2.096) indicate the proportion of variance attributed to the predictors compared to the residual variance (30.677). The regression equation IAC=0.763+0.174 RAQ+0.214 ERCIAC, describes the influence of Reduced Audit Queries (RAQ) and Enhanced Revenue Collection (ERC) on Internal Audit Controls (IAC). Reduced Audit Queries (B = .174, Sig. = .026) has a statistically significant positive effect, meaning that improvements in reducing audit queries are associated with stronger internal audit controls. Enhanced Revenue Collection (B = .214, Sig. = .117) shows a positive but statistically insignificant impact, suggesting it may contribute to internal audit controls but not as strongly or reliably as Reduced Audit Queries. Overall, the results imply that while both predictors positively influence internal audit controls, reducing audit queries is the most significant factor in this model. The regression model IAC=−0.781+0.164 SD+0.293 SJDIAC, describes the effects of Segregation of Duties (SD) and Structure and Job Descriptions (SJD) on Internal Audit Controls (IAC). Segregation of Duties (B = 0.164, Sig. = .037) has a positive and statistically significant impact, suggesting that improving segregation of duties positively influences internal audit controls. Structure and Job Descriptions (B = 0.293, Sig. = .096) also show a positive relationship with internal audit controls, although this effect is not statistically significant at the 0.05 level (Sig. = .096). Overall, the model suggests that enhancing segregation of duties has a meaningful impact on strengthening internal audit controls, while the influence of structured job descriptions is positive but less definitive in this model. The findings indicate the presence of internal control measures, including an audit committee overseeing financial reporting, internal controls, and risk management. However, several weaknesses are identified, such as inadequate internal audit reporting, inadequate revenue database system, poor operation of billing systems and slow operations of online payment systems. These weaknesses can impact financial management and revenue collection. To address these issues, the study recommends specific remedies aligned with best practices identified in the literature. These remedies include partnering with mobile phone service providers to introduce a platform which allows customers to easily access their bills and statements, invest their resources in procuring a bigger database that can store all their revenue from different revenue streams. In addition, the council should also procure Computer Assisted Audit Techniques (CAATs) tools that will broaden the audit scope and perform test that cannot be performed manually by enabling real-time monitoring and detection of irregularities which will increase the quality and reliability of audit results. Auditors should also be trained in information system and forensic audits since payments and revenue at the council are processed using information systems, and due to the nature of the risks at the council the auditors need to have forensic skills in order to detect fraud. The other recommendation is that the council should have a disaster recovery plan in place. The recommendations provided in the study aim to establish a robust internal control system at Lusaka City Council.

The study examined the effectiveness of Accounting Information Systems (AIS) and its impact on the operational performance of the industrial public-listed companies in Jordan. The sample of the study consisted of 42 Jordanian companies from different sectors listed in Amman Stock Exchange (ASE) at the end of 2012. The findings indicated that AISs employed in industrial companies were effective, particularly, in meeting planning requirements. The results also revealed that most of companies' decisions were taken based on executives' personal opinions supported by the board of directors who affected by those opinions. Holding the last rank, AISs were deemed incapable basis for decision taking. Finally, the results confirmed that the effectiveness of AISs was significantly ans positively related to the operational performance of Jordanian industrial companies, which in turn signifies AISs capability in generating relevance information related to operational processes. On the basis of aforementioned results, Jordanian industrial companies were exhorted to seize the opportunity of updated AISs to increase systems adaptability to changes in the external environment related to decision-making processes. Additionally, industrial companies are required to analyze information generated by AISs to improve the operational performance.

The purpose of this study is to determine whether the effectiveness of probity audit, integrity, and the government's internal control system (SPIP) affects fraud in the procurement of goods and services in Serang district. This research uses quantitative methods. The sampling technique uses cluster sampling. The population in this study was a whole local government organization with a total of 27 and each OPD was given 5 questionnaires. The analysis method used in this study is the coefficient of determination method. The data processing process uses SmartPLS software version 3. The type of data used in this study is primary data. Path analysis and bootstrapping technique were used to test the hypothesis. The results of this study show that the effectiveness of the audit probity and the government's internal control system had a positive and significant effect on the prevention of fraud in the procurement of goods and services while for integrity it had no effect and was significant on the prevention of fraud in the procurement of goods and services.

Fraud detection is the identification of fraudulent behavior once it has occurred. Once detection has occurred action can be taken to limit the fraudulent activity. Fraud detection methods are in a constant state of change or flux due to the nature of fraud. The process of data mining is one of methods for obtain the required data for analysis, study, take preventive measures, administrative decisions and fraud detection. This study aims at detecting fraud in evading the payment of the cheques and promissory notes payable by the customer in the Palestinian work environment and enforcing them on one of the largest Palestinian companies that use the system of sale by installments through promissory notes and cheques very large through the extraction of data from the accounting information system. A qualitative research methodology is adopted in undertaking the investigation to understand the actual conduct of practices that aims to recommend improvements for fraud control and detection it and prevent it through data mining and analyze them and making decision for solution these problems. The results indicate that the company has a lot of cheques and promissory notes that are not paid very much therefore the company suffers from this scourge very much by many fraudulent customers, which affects its activities and profits. The data was mining from the accounting information system Priority which is using in this company. The research methodology was used these data according to the Microsoft Excel and analysis and extract the results related to the detection of this problem and prove the existence of this problem. Based on the research that aims at how to detect fraud through the data mining by the accounting information systems and the results connected to the researcher has already been detected fraud in the company to which the research was applied. As a result, the study provides information on the causes of this problem and solutions and suggestions that help to reduce them very significantly and therefore the researcher sees the need to participate between all competent authorities concerned with these matters to eliminate this scourge that threatens companies in particular and the State and society in general.