Red Flag And Auditor Experience Toward Criminal Detection Trough Profesional Skepticism

Syamsuri Rahim, Muslim Muslim, Asbi Amin

doi:10.24912/ja.v23i1.459

Abstract

This research was conducted to examine the influence of red flags variables, auditor work experience and professional auditor skepticism on fraud detection. The test is to seek the influence of red flags variables and work experience on professional auditor skepticism. And the test of the red flag variables and auditor work experience on fraud detection through professional auditor skepticism. The number of samples used was 40 people from 8 Public Accountant offices in Makassar City using the census method. Data collection research uses questionnaires in the form of questionnaires. The data analysis technique used is the Partial Least Square (PLS) Method. The results showed that the red flags and professional skepticism had a positive and significant influence on fraud detection, while the auditor's work experience had a positive but not significant influence on fraud detection. Red flag and auditor work experience have a positive and significant influence on professional skepticism. Professional skepticism is able to mediate the significant influence between red flags and auditor work experience on fraud detection.

Highlights

Economic development in Indonesia has its own consequences for economic actors
The rise of news about fraud cases and involving public accounting firms has become a phenomenon in the world of auditing like a scandal that occurred at the Arthur Andersen Public Accountant Office (PAO) in the United States that issued a Fair Without Exception (FWE) opinion on the financial statements of PT
The result of this study found that the result of direct testing of red flags variables, and professional auditor skepticism had a positive and significant effect on fraud detection

Summary

Introduction

Economic development in Indonesia has its own consequences for economic actors (companies). It must be understood that every economic development will be accompanied by the emergence of various tricks and new forms of accounting crime that bring harm to the owners of the company and investors and to employees, credit institutions, the state, even the audit company itself. The rise of news about fraud cases and involving public accounting firms has become a phenomenon in the world of auditing like a scandal that occurred at the Arthur Andersen Public Accountant Office (PAO) in the United States that issued a Fair Without Exception (FWE) opinion on the financial statements of PT. Sometime after the WTP opinion was issued, it was proven that Enron Corporation's financial reporting was a form of fraud (Hegazy and Kessem, 2010). An example of the failure of FWE Arthur Andersen, certainly makes many parties question the auditor's responsibility in detecting fraud, and indirectly will have an impact on the level of stakeholder confidence to be declining (Sanjaya, 2018)

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Conclusion