Asia Pacific Fraud Journal (APFJ - Association of Certified Fraud Examiners, ACFE)
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FRAUDULENT FINANCIAL REPORTING BY DISTRICT / MUNICIPAL GOVERNMENT IN INDONESIA1
Get PDFABSTRACTThis research aims to analyze and obtain empirical evidence about the influence of fraud diamond (pressure, opportunity, rationalization, and capability) on fraudulent financial reporting in the public sector. Opinion on the financial statements of the district / municipal government in Indonesia is used as a proxy to indicate fraudulent financial reporting. The population used in this research is the district / municipal governments in Indonesia. The total samples are 437 district / municipal governments obtained through convenience sampling method. This research uses secondary data drawn from BPK’s Audit Reports of 2014 and 2015 and BPK’s Audit Results Summary of the First Semester (IHPS) of 2015. To analyze the data, this research uses logistic regression analysis with the SPSS 20.0 software tools. The results show that the factor of pressure, ie financial target that is proxied by percentage of budget realization has negative effect on fraudulent financial reporting; the factor of opportunity, ie related party transaction that is proxied by income transfers from the central government and internal control weakness that is proxied by audit findings of internal control systems in BPK’s Audit Result Reports has positive effect on fraudulent financial reporting, ie the factor of capability that is proxied by changes of regent / mayor has positive effect on fraudulent financial reporting, while the factor of pressure, ie external pressure that is proxied by local government capability of paying its liabilities (leverage) and the factor of rationalization that is proxied by previous year non-unqualified opinion has no significant effect on fraudulent financial reporting
FINANCIAL STATEMENT FRAUD DETECTION USING PERSPECTIVE OF FRAUD TRIANGLE ADOPTED BY SAS NO. 99
Get PDFFinancial statements generally aim to provide information about the company’s financial position, performance, and cash flows to the interested parties. The motivation to gain trust from the users, especially investors, shareholders and creditors, leads someone to commit fraud in the financial reporting. This study aims to detect and predict financial statement fraud based on the perspective of fraud triangle adopted by SAS No. 99. The dependent variable in this study is financial statement fraud which is proxied by earnings management, while the independent variables in this study are financial stability pressure, personal financial need, ineffective monitoring, effective monitoring, external pressure, and financial targets.Population of this research is manufacturing companies listed in Indonesia Stock Exchange period 2012 - 2014. Samples are selected using purposive sampling method and obtained 150 companies out of a total population of 162 companies. The results show that financial stability pressure and external pressurehave significant positive effect on financial statement fraud. Meanwhile, personal financial need, ineffective monitoring, effective monitoring, and financial targets do not have significant effect on financial statement fraud
Democracy and Anti-Corruption Strategy: The Role of Civil Society in Preventing and Combating Corruption in Indonesia*
Get PDFABSTRACTCorruption is an impediment to development and also amounts to a violation of human rights.1 The fight against corruption is a requirement in the good governance program.2 Civil society as the biggest stakeholder in a Statehas the prominent role in the fight againstcorruption.3 Indonesia placed at 107th rank in the Corruption Perception Index (CPI) and is one among states which are severely impededby corruption.4 Corruption in Indonesia is rampant and pervasive, several cases such as Cicak versus Buaya case and the appointmentof Budi Gunawan have attracted public attention massively.5 Indonesian civil society gunawan has actively engaged in the processes of these cases and their voice did make change, for example in the case of Cicak versus Buaya, the voice of civil society has led to the deponeering decision of Bibit and Chandera’s prosecution.6 This article aims to explain thelegal framework on the participation of civil society with regard to corruption prevention and to conceptualize the role of the civil societyin combating corruption by taking the evidence of emerging civil society and its relation to anti-corruption in Indonesia. This article alsoaims to explain the relationship between civil society, democracy and good governance as a strategic anti-corruption measures
HOW DO INDEPENDENT AUDITORS DETECT FRAUDULENT FINANCIAL STATEMENTS?
Get PDF(Participatory Observation in Public Accounting Firm “Xâ€) ABSTRACTIndependent auditors have audit risk making them unable to detect material misstatements, especially those caused by fraud. This is because fraud may involve sophisticated, organized, and carefully designed scheme to be covered from the auditors. In addition, the audit risk could also be influenced by the negligence of the auditors, such as the audit that is not according to auditing standard, having no professional skepticism, and the inadequacy of training and audit experience. The objective of the research is to analyze whether the independent auditors perform a good audit planningand have a professional skepticism and audit experience to be able to detect fraudulent financial statement in the company in order to obtain a reasonable assurance. This research uses qualitative approach using participatory observation on 1 object, Public Accounting Firm (KAP) “Xâ€, the only big four-audit firm that has a branch office in Surabaya. The research findings indicate that the audit team performs good audit planning, has professional skepticism and audit experience, can detect fraudulent financial statements
FACTORS AFFECTING THE INDEPENDENCE OF GOVERNMENT AUDITORS OF BPKP REPRESENTATIVE OF EAST KALIMANTAN PROVINCE
Get PDFThis study aims to determine whether the factors consisting of audit experience, knowledge, job stress scale, and reward may affect the independence of government auditors. This study uses primary data obtained from questionnaire. The population in this study is as many as 103 government auditors working at the Finance and Development Supervisory Agency (BPKP) of East Kalimantan Province with a total sample of 33 government auditors. The analysis tool used is multiple linear regression formula, while the hypothesis test is conducted using model feasibility test (F statistic test) and partial significance test (t statistic test). The result of simultaneous hypothesis test indicates that audit experience, knowledge, job stress scale, and reward simultaneously have positive effect on the independence of the government auditors. The result of partial significance test indicates that: (1) audit experience has no effect on the independence of the government auditors, (2) knowledge has positive effect on the independence of the government auditors, (3) job stress scalehas no effect on the independence the government auditors, and (4) reward has no effect on the independence of the government auditorsofthe Finance and Development Supervisory Agency(BPKP) Representative ofEast Kalimantan Province.INTRODUCTIO
EXPERTISE, INDEPENDENCE AND PROFESSIONAL SKILLS OF INTERNAL AUDITORS IN PREVENTING FRAUD ON E-COMMERCE TRANSACTIONS (A CASE STUDY AT PT KERETA API INDONESIA)
Get PDFNowadays, the development of information technology has given significant impact on various activities. Easy facilities provided by information technology enable the society, especially costumers, to make transactions at their workplace or home. Such demands make producers and companies feel the need to apply e-commerce their business. This research aims to give information about the expertise, independence, and professional skill of the internal auditors in preventing fraud on e-commerce transactions. This research applies Miles and Huberman model with three activities in the data analysis, such as: data reduction, data model, and conclusion withdrawal. This research uses qualitative research with a case study at PT KeretaApi Indonesia (Persero). The result obtained from this research shows that the audit process of e-commerce at PT KeretaApi Indonesia (Persero) is entirely conducted by the Internal Auditors in IT Unit, because IT Unit has its own Team of Auditors outside the SPI Unit (Internal Auditor Unit) of PT KeretaApi Indonesia (Persero)
CORRUPTION AND NICCOLO MACHIAVELLI
Get PDFThe increasing corruption in Indonesia occurs because of the indecision of the leader. This is contrary to the 1945 Constitution of the republic of Indonesia that the position of the president is the chief executive. This has repercussions on the position where the president to act without pressure in combating corruption. The leader can apply the Niccolo Machiavelli’s idea that is to take the ideas of the people and focus on those ideas, and then restore those ideas to the people so that they apply them, and to make corrections in case of errors. Such is the basic method of leadership. In conclusion, Niccolo Machiavelli’s ideais appropriate to be applied in combating corruption because in the Law Bo. 20 of 2001 has created a justice for the perpetrators of corruption when declared as the accused of corruption. The main concern is to take advantage with the position of president as the chief executive, in which the president may also be subject to the decisive law. This firm attitude will have an impact on law enforcement to implement legislation fairly. The suggestions that can be put forward in combating corruption is understanding the doctrine of jurisprudence, from countries, that are considered poor should be a critical review in the development of legal science in Indonesia, extending the meaning of gratification by incorporating sexual elements, and applying social sanctions
ANALYSIS OF THE ROLE OF BPK IN PREVENTING AND ERADICATING CORRUPTION (A STUDY IN 4 DISTRICTS IN SOUTH SULAWESI PROVINCE
Get PDFThe objective of this study is to test the ability of BPK (the Audit Board of the Republic of Indonesia) in preventing and eradicating corruption in regional government (district). In this study, the examination is focused on the factors that affect the treasurers to commit fraud, especially in the financial management and financial transaction area, based on the fraud triangle theory. This study is based on the interviews with 87 treasurers and former treasures period 2008-2012. The result of this study indicates that pressure and rationalization have a positive relationship with fraud. The result provides partial support for the fraud triangle theory in explaining the phenomenon of fraud. The role of BPK is as a strategic government auditor in preventing and combating corruption in regional government
CORRELATION OF FINANCIAL STATEMENT COMPONENTS IN DETECTING FINANCIAL FRAUD
Get PDFThe purpose of this study is to determine the absence of correlation offinancial statement components as red flags in detecting financial statement fraud. The sampling in this study is done using purposive sampling technique. There are two categories of companies used as the study sample:fraud companies and non-fraud companies. Fraud companies are the companies that get sanction from Capital Market Supervisory Agency (Bapepam) andFinancial Services Authority (OJK) period 2000-2014, while non-fraud companies are selected with the criteria: having equivalent assets, engaging in the same industry, and using the same financial statements as the financial statements used by the fraud companies. The total samples of this study are 122 companies consisting of 61 fraud companies and 61 non-fraud companies. Spearman correlation test is used to answer the research hypothesis.The conclusions of this study are (1) the absence of correlation between cash flows andearnings can be usedas red flags to detect fraud, (2) the existence of correlation between receivables and revenues cannot be used as red flags to detect fraud, (3) the existence of correlation between allowances for uncollectible accounts and receivable cannot be used as red flags to detect fraud
POLITICAL CORRUPTION PREVENTION IN REGIONAL ELECTION AFTER THE DECISION OF THE CONSTITUTIONAL COURT NO. 33/PUU-XII/2014
Get PDFPolitical dynasty in the regional election in Indonesia has been canceled by the Constitutional Court (MK). In fact, the political dynasty is considered as elements that undermine the promotion of democracy and anti-corruption culture in Indonesia. Moreover, in case of corruption, political dynasty has a very close relationship with corruption, or commonly known as political corruption. By law, a political dynasty can no longer be resisted. Therefore, what is needed is how to prevent or at least to minimize the political corruption committed by the incumbent. This paper is set in 3 sub-headings, namely (a) corruption in Regional Elections: (b). Political Corruption by Incumbent; and (c) Political Corruption Prevention. Based on the analysis performed, the incumbent has broad access in economic, social, and politics which can provide a personal benefit to him or win his group in the elections. Therefore, the prevention of political corruption can be focused on (1) the financial preparedness and the control of campaign funds; (2) the opening of a space for people to demand commitment, consistency of attitude, and integrity of the incumbent in the fight against political corruption; and (3) enforcement of the rules must be carried out firmly without compromis