Determinants of auditor's ability to detect fraud with professional skepticism as moderation at the inspectorate general of the ministry of public works and public housing

Abstract

The high number of fraud cases in Indonesia has caused huge losses. When fraud cases are disclosed by external parties, what often becomes the public spotlight is the failure of the internal auditor's role in detecting fraud. This study aims to examine the factors that influence the auditor's ability to detect fraud. The data used in this study is primary data sourced from the auditors of the Inspectorate General of the Ministry of Public Works and Public Housing (MPWH) with a total sample of 117 respondents. Data was obtained through a closed questionnaire. The sampling technique is random sampling. The analysis technique in this study is to use Moderated Regression Analysis (MRA), including the t-test and R2 test. The results of the analysis show that competence, independence, and whistleblowing have a positive and significant effect on the auditor's ability to detect fraud. The moderating effect of professional skepticism can strengthen the effect of competence and independence on the auditor's ability to detect fraud. On the other hand, professional skepticism does not moderate the effect of whistleblowing on the auditor's ability to detect fraud.

Antecedents of Professional Skepticism, Auditor Experience, and Time Pressure in Fraud Detection

“…It involves questioning biases, assumptions, and conclusions without sufficient evidence or substantiation. Professional skepticism is highly significant in fraud detection, professional development, and decisionmaking across various domains, including finance, engineering, and many others (Said, Lola., 2018;Herawati, Astrid., 2023). It promotes critical thinking and rigorous thought, assisting professionals in avoiding errors, uncovering fraud, and making informed decisions (Grenier, Jonathan., 2013; Chen, Ya-Hui., 2023).…”