The Effect of Fraud Prevention, Fraud Detection, Investigative Audits,

and Professionalism of Auditors on Efforts to Minimize Fraud in the

Financial Statements of Companies in

Makassar City, Indonesia

NATALIA PARANOAN1, SITA YUBELINA SABANDAR1, ANTHON PARANOAN2,

ELISABET PALI3, ISAK PASULU3

1Faculty of Economics and Business, Universitas Kristen Indonesia Paulus, INDONESIA

2Faculty of Informatics & Computer Engineering, Universitas Kristen Indonesia Paulus, INDONESIA

3Faculty of Economics and Business, Universitas Kristen Indonesia Toraja, INDONESIA

Abstract: - 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.

Key-Words: - Fraud Prevention, Detection, Investigation Audit, Professionalism of auditor, Minimize Fraud

Received: March 23, 2021. Revised: February 15, 2022. Accepted: March 21, 2022. Published: April 19, 2022.

1 Introduction

Fraud is an intentional or carelessness in doing

something or not doing something that should be

done so that the financial statements are materially

misleading [2], [3]. The management as the

controller of the control structure is very responsible

for any transaction activities that take place in a

company who he leads in one period. The

responsibility carried out by the management

towards the shareholders (owner) is how the

financial statements prepared by the management

can be presented fairly. However, in reality there are

still many companies that have not presented

financial statements fairly and even indicated fraud.

For example, several cases in Indonesia, namely the

Century Bank scandal. Data relating to the Bill Out

disbursement of funds of 6.7 trillion through the

Short-Term Funding Facility which was disbursed

by Temporary Equity Participation funds by Bank

Indonesia through LPS to Century Bank. [22].

The case at Bank BRI Riau in Sumatra, where

the Branch Head made a fictitious transfer of Rp.

1.6 billion. The Branch Head made false records in

the books or reports or documents of business

activities [23]. The case that is also interesting

namely the misappropriation of Electronic Identity

Card (E-KTP) funds also shows that the temptation

to commit fraud is very strong and does not look at

position. While an example of a case abroad such as

in the Company in America is the case of Enron

which caused bankruptcy amounting to US $ 60

billion lost in a very large market capitalization for a

significant number of investors, employees and

retirees [22]. Other cases are Xerox, Kmart, Qwest

Communication International, Woldcom, Adelphia,

Tyco, and Duke Energy [22].

From the various cases above, it is very

necessary to have an Internal Audit that has a fraud

examination technique. The factors that influence

the success in carrying out fraud management, one

of which is influenced by the implementation of

fraud prevention, fraud detection, audit

investigation, and professionalism.

Several previous studies, namely Adha (2013)

examined fraud prevention, fraud detection, and

investigative audits in minimizing financial

statement fraud at Bank Cimb Niaga Surabaya.

Results showed that all variables had a positive

effect on minimizing fraud [1]. In [21], detecting

fraud in financial statements and the results are

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Natalia Paranoan, Sita Yubelina Sabandar,

Anthon Paranoan, Elisabet Pali,

Isak Pasulu

E-ISSN: 2224-3402

Volume 19, 2022

influenced by the characteristics of the occurrence

of fraud, auditing standards regarding fraud

detection and the audit work environment.

Examined the effect of investigative audits,

independent audits and due professional care on the

effectiveness of the implementation of fraud proof

procedures moderated by social pressure and the

result showed that investigative audits have no

significant effect on the effectiveness of the

implementation of fraud proof procedures. This

study examines the effect of preventive measures,

fraud detection, investigative audits, and

professionalism of auditor on efforts to minimize

fraud in the financial statements of companies in

Makassar Indonesia, which has not been widely

carried out.

Based on the above background, the objectives

of this research are:

1. To examine the effect of fraud prevention on

efforts to minimize fraud in financial statements

of companies.

2. To examine the effect of detection on efforts to

minimize fraud in financial statements of

companies.

3. To examine the effect of investigative audit on

efforts to minimize fraud in financial statements

of companies.

4. To examine the effect of auditor professionalism

on efforts to minimize fraud in financial

statements of companies.

5. To examine the effect of fraud prevention,

detective, investigative audit, and

professionalism on efforts to minimize fraud in

financial statements of companies.

While the contribution of this research is

theoretical. This study provides empirical evidence

on how the effect of fraud prevention, detection,

investigative audits, and professionalism on efforts

to minimize fraud. In addition, this research can

enrich study materials or references for future

research and also provides input on the factors that

cause fraud in the presentation of financial

statements and what to do if fraud is proven. In

practice, it can contribute to the company's thoughts

on how to fraud and what actions to take if audit

evidence related to fraud has been found in

minimizing fraud in financial statements so that

decision makers can take strategic policies to

minimize fraud

2 Problem Formulation

2.1 Framework Theory

Fraud is an act of fraud in the form of an

intentional mistake that causes harm without the

aggrieved party being aware of it and provides an

advantage for the perpetrator of the fraud.

The Association of Certified Fraud Examiners

(ACFE) classifies fraud into three types, namely

misappropriation of assets, corruption, and fraud on

statements. Fraud that often occurs and causes large

losses is fraud on statements, often called financial

statement fraud [16], [17]. ACFE uses The Fraud

Triangle as a model in various studies related to

fraud. The concept of the fraud triangle introduced

by Donald Cressey in 1950 emphasizes three

conditions that cause fraud, namely

pressure/incentive, opportunity, and

rationalization/attitude [9], [16]. Pressure occurs

when financial stability is threatened, there is

market competition or business failure, and also

there is a high profit target from shareholders so that

management is threatened with low performance.

Opportunity occurs due to transactions that are not

fair in size, use a lot of accounting estimates,

subjective considerations or uncertain, international

operations, as well as differences in business culture

[9], [20]. Opportunities also occur when the

company has poor governance. Rationalization is

the attitude of someone who justifies the actions

taken. This is due to insufficient information and

communication regarding ethical standards that

must be implemented, aggressive profit growth, and

failure to implement accounting systems and

internal controls within the company [5], [20].

2.1.1 Factors that Drive Fraud

According to Cressey, [6], [22] there are factors

driving the occurrence of fraud, namely:

1. Intent, is a characteristic that distinguishes fraud

from errors or mistakes. Fraud perpetrators

intend to commit fraud for their own benefit at

the expense of others.

2. Incentive/Pressure. Management or employees

may have encouragement or pressure that is the

reason for committing fraud. To commit fraud

depends more on individual conditions, such as

facing financial problems, someone's bad habits

such as gambling and drinking or having

expectations unrealistic goals.

3. Opportunity. The environmental conditions in

the workplace provide an opportunity to commit

fraud due to a weak supervisory system.

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4. Rationalization/Attitude. Some individuals have

attitudes, character, or ethical values that follow

to justify committing dishonest acts.

2.1.2 Fraud Prevention

Cressey revealed that the root of fraud is: fraud by

need, by greed, and by opportunity. However, if we

want to prevent fraud, eliminate or suppress the

cause as much as possible. Eliminating or

suppressing the need and greed that initiates the

occurrence of fraud is carried out since receiving a

person (recruitment process), even though we know

that the process is not a full guarantee. This is

instilled through fraud awareness and examples

given by the leadership of the company or

institution [6], [10], [23]. Therefore, fraud

prevention efforts can be started from internal

control. Internal control has developed in thought

and practice. Because one of the goals of internal

control is one of them to oversee the performance of

management and employees so that the level of

fraud can be suppressed.

2.1.3 Fraud Detection

Fraud detection measures cannot be generalized to

all frauds. Each type of fraud has its own

characteristics, so to be able to detect fraud, it is

necessary to have a good understanding of the types

of fraud that may arise in the company. Most of the

evidence of fraud is indirect evidence. Indications of

fraud are usually indicated by the appearance of

symptoms such as changes in a person's lifestyle or

behaviour, suspicious documentation, complaints

from customers or suspicions from co-workers.

Initially, this fraud will be reflected through the

emergence of certain characteristics, both

environmental conditions/conditions, as well as a

person's behaviour.

Characteristics that are certain

conditions/situations, conditions of that personal

person are called Red Flags (danger signs).

Although the emergence of these red flags is not

always an indication of fraud, these red flags usually

always appear in every case of fraud that occurs

[11], [18].

2.1.4 Investigative Audit

Investigative audit is one of the activities in the

context of implementing strategic efforts to combat

corruption with an investigative approach. In other

words, investigative audit in general can be said as

an investigative process based on law and a sense of

justice to seek the truth with a high level of

assurance regarding a problem found [13], [14].

2.1.5 Professionalism of Auditor

One measure of a good auditor's performance is if

the auditor can obtain adequate assurance about the

financial statements that are made, free from

misstatements caused by errors or fraud. This can be

obtained by using his professional skills carefully

and thoroughly. According to Oboh in [15], a person

is said to be professional if he meets three criteria,

namely having the expertise to carry out tasks

according to his field, carrying out a task by setting

standard standards in the profession concerned and

carrying out his professional duties by fulfilling the

established professional ethics.

2.1.6 Framework

Figure 1 shows the framework made in the research

model regarding the effect of prevention

measurement, fraud detection, investigative audits,

and professionalism of auditor on efforts to

minimize fraud in financial statements.

Fig. 1: Framework Mode in the Research

2.1.7 Hypothesis Development

H1: Fraud prevention have a significant effect on

efforts to minimize fraud in financial

H2: Fraud detection have a significant effect on

efforts to minimize fraud in financial

statements

H3: Investigative audit significant effects on

efforts to minimize fraud in financial

statements

H4: Professionalism of auditor have a

significantly effect on efforts to minimize

fraud in financial statements

H5: Simultaneous fraud prevention, fraud

detection, investigative audit, and

professionalism have a significant effect on

efforts to minimize fraud in financial

statements.

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2.2 Research Methodology

This study aims to analyse the causal relationship

used to explain the effect of independent variables,

namely fraud prevention, fraud detection,

investigative audits, and professionalism.

Dependent variable is efforts to minimize fraud in

financial statements.

2.2.1 Population and Sample

The population in this study were internal auditors

at companies in Makassar City, Indonesia and the

number of samples used was 52 respondents. The

sample selection method used is convenience

sampling, so the authors have the freedom to choose

the fastest and easiest sample [7].

2.2.2 Method of Collecting Data

The data used in this study is primary data, namely

the source of research data obtained directly from

the original source (not through intermediary

media). Primary data was collected through survey

methods using questionnaires. Questionnaires were

sent directly to respondents.

2.2.3 Data Analysis Method

The data were analysed using multiple regression

method to test the effect of the independent

variables on the dependent variable.

In this study the regression equation used is:

Y = a + b1 X1 + b2 X2 + b3 X3 + b4 X4+

ℇ

Information:

Y : Minimizing fraud in financial statements

b1, b2, b3, b4 : Regression Coefficient

X1 : Fraud Prevention

X2 : Fraud Detection

X3 : Investigative Audit

X4 : Professionalism

a : Constant

ℇ : error

2.2.4 Research Instrument Test

Researchers tested the research instrument from the

data to be processed as follows:

1. Validity Test. Validity test is used to measure the

validity or validity of a questionnaire. A

questionnaire is said to be valid if the questions

on the questionnaire are able to reveal something

that will be measured by the questionnaire. In

this study, the validity test was measured by

doing a correlation between the score of the

question items and the total score of the construct

or variable.

2. Reliability Test. Reliability test was conducted to

test the consistency of answers from respondents

through the questions given. The results of

reliability testing are used to determine whether

the research instrument used can be used many

times at different times.

2.2.4 Definition of Operational Variables

The dependent variable in this study is an effort to

minimize fraud in the financial statements. While

the independent variable is the effect of fraud

prevention, detection, investigative audit, and

professionalism. In this study, the measurement

scale used is the Likert scale, using five research

points, namely: (1) strongly agree, (2) agree, (3)

uncertain or neutral, (4) disagree, (5) strongly

disagree.

The measurement of each variable can be found as

follows:

1. Fraud Prevention

In general fraud prevention is an activity carried

out by management in terms of establishing

policies, systems and procedures that help

ensure that the necessary actions have been

taken by the board of commissioners,

management, and other company personnel to

provide adequate assurance in achieving 3

(three) main objectives, namely: reliability of

financial reporting, effectiveness and efficiency

of operations as well as compliance with

applicable laws and regulations [21].

2. Fraud Detection

This fraud will be reflected through the

emergence of certain characteristics, both

environmental conditions/conditions, and a

person's behavior. Characteristics of a certain

condition/situation, behavior/condition of a

person called Red flags (Fraud indicators).

Although the emergence of the red flag is not

always an indication of fraud, this red flag

usually always appears in every case of fraud

that occurs [12].

3. Investigative Audit

One of the activities in the context of

implementing a strategy to combat fraud with

an investigative approach. An investigative

audit in general can be said as an investigation

process based on law and a sense of justice to

seek the truth with a high level of assurance

regarding a problem found [22]

4. Professionalism

Auditor professionalism is a responsible attitude

towards what has been assigned to him. The attitude

of professionalism will make decisions based on

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their considerations [15]. The indicator is

dedication, social obligation, autonomy demands,

belief in self-regulation, professional community

affiliation.

3 Problem Solution

This research was conducted on 52 internal

auditors who work in companies in Makassar City

by distributing questionnaires.

3.1 Descriptive Demographics of

Respondents

Descriptive demographics of respondents provide

an overview of the characteristics of respondents

as measured by a nominal scale that shows the

absolute frequency and percentage of gender and

length of service at the agency. The number of

respondents based on gender was 32 men or

61,5%, while the remaining 20 people or 38,5%

were female. The number of respondents based on

the length of work as an auditor for 5-15 years is

16 people or 30,7%, while those who have worked

for 16-25 years are 18 people or with a percentage

of 34,7%. While the auditors with experience

above 25 years are 18 people or with a percentage

of 34,7%

3.2 Data Quality Test

In the research methodology studied by researchers

using data quality tests as follows:

3.2.1 Validity Test

Validity test is conducted to measure whether a

questionnaire is valid or not. An item is said to be

valid if the questions/statements on the

questionnaire are able to reveal something that will

be measured by the questionnaire.

Testing the validity of the instrument using SPSS.

The validity value is shown in the Corrected Item-

Total Correlation column. Based on the validity

test, it can be concluded that most of the

question/statement items to measure each research

variable are declared valid.

Based on the results of the SPSS output, it is

known that the validity value is in the Corrected

Item-Total Correlation column, which means the

correlation value between the scores of each item

and the total score on the tabulation of respondents'

answers to the results of the validity test of 55

questions/statements on the variables of fraud

prevention, detection, investigative audit,

professionalism auditors, efforts to minimize fraud

in the financial statements can be declared valid

because all values of the coefficient r count ≥ r

table (0.30).

3.2.2 Reliability Test

Reliability test is carried out to show the extent to

which a measuring instrument can be trusted. A

questionnaire is said to be reliable if a person's

answers to questions/statements are consistent

from time to time. The reliability test was carried

out using the Cronbach's Alpha statistical test. An

instrument is said to be reliable if the Cronbach's

Alpha value ≥ 0.60, means that the instrument used

is reliable. The test results show that the variables

X1, X2, X3, X4 and Y in this study are reliable.

This is evidenced by the value of Cronbach's

Alpha ≥ 0.60.

3.3 Hypothesis Test

3.3.1 Multiple Regression Analysis Test

Hypothesis testing in this study used multiple linear

regression analysis. Multiple linear regression

analysis was conducted to find the effect of two or

more independent variables on the dependent

variable. The magnitude of this influence can be

seen in Table 1.

Table 1. Multiple Regression Analysis Test

Based on Table 1. (coefficients) the value of the

multiple linear regression equation is obtained as

follows:

Y = 13.390 + 0.465X1-0.041X2-0.22X3+0.371X4

Information:

Y = Estimated value of efforts to minimize

fraud in financial statements

X1= Value of prevention

X2= Value of Detection

X3= Value of investigative audit

X4= Value of Auditor professionalism

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Based on the results of SPSS data processing, the

results of multiple linear regression can be described

as follows:

a. If everything in the independent variables is

considered 0 (zero) then the value of efforts to

minimize fraud in the financial statements (Y) is

13.390.

b. If there is an increase in preventive measures by

1, the effort to minimize fraud in the financial

statements (Y) will increase by 0.465.

c. If there is an increase in detection by 1, the effort

to minimize fraud in the financial statements (Y)

will decrease by 0.041.

d. If there is an increase in investigative audits by 1,

the effort to minimize fraud in the financial

statements (Y) will decrease by 0.022.

e. If there is an increase in auditor professionalism

by 1, the effort to minimize fraud in the financial

statements (Y) will increase by 0.371.

3.3.2 Partial Significance Test Results (t Test

Results)

Partial regression test (t test) is useful for testing the

effect of each independent variable partially on the

dependent variable. To determine whether there is

an influence of each independent variable on the

dependent variable, it can be seen by comparing the

probability value (p-value) of each variable with a

significance level of 0.05. if the p-value is less than

0.05, it can be said that the independent variables

partially have a significant effect on the dependent

variable. The results of the partial regression test (t

test) can be seen in the following Table 2:

Table 2. t Test Results

1) Test Hypothesis 1 (Fraud Prevention (X1)).

The test results for this preventive measure have

a significance number of 0.000 so that the value is

less than 0.05. It can be concluded that H1 is

accepted, which means that preventive measures

have an influence on efforts to minimize fraud in

financial statements. The results of this study

support previous research conducted by Sidik in

[21] which states that preventive measures have an

effect on efforts to minimize fraud. The researcher

concludes that the increasing number of preventive

actions taken by a government or private agency

will have a positive impact on efforts to minimize

fraud.

2) Test Hypothesis 2 (Fraud Detection (X2)).

The test results for this detection have a

significance number of 0.743 so that the value is

greater than 0.05. Thus, H2 is rejected. The results

of this study are inversely proportional to the

research conducted. The limitations of auditors in

the implementation of fraud detection can be

triggered by concealment related to financial data by

the company's management. This is due to the cover

up by the company in terms of detecting fraud.

3) Hypothesis Test 3 (Investigative Audit (X3)).

The test results for this investigative audit have

a significance number of 0.841 so that the value is

greater than 0.05. It can be concluded that H3 is

rejected, which means that the investigative audit

has no effect on efforts to minimize fraud in the

financial statements. The results of this study are

support.

4) Hypothesis Test 4 (Professionalism of Auditor

(X4)).

The significant value of the auditor

professionalism variable is 0.000. This shows that

the significant value of the auditor professionalism

variable is less than 0.05, it can be concluded that

H4 is accepted, which means that auditor

professionalism has an influence on efforts to

minimize fraud in financial statement [15].

3.3.3 F. Test Results

Simultaneous significance testing (F test) was

conducted to show whether all independent

variables used in the regression model had a

significant effect on the dependent variable together.

The results can be seen in the following Table 3:

Table 3. F Test Results ANOVAb

Predictors: (Constant), Professionalism,

Investigative Audit, Detection, Prevention

Dependent Variable: Effort to Minimize

Fraud

Based on the results of data processing in Table

3 shows that the significance value is 0.000 or less

than the probability value (p-value) of 0.05 (0.000 <

0.5). The results of the hypothesis test show that

(H5) is accepted. The results of this study support

[21]. Partially, the variables of detection and

investigative audit have no significant effect on

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efforts to minimize. However, together or

simultaneously, the fourth variables, namely

prevention, detection, investigative audits and

professionalism have a significant effect on efforts

to minimize fraud in financial statements.

The success of minimizing fraud is an

achievement for an auditor. Conducting an

investigative audit can increase success in efforts to

minimize fraud in financial statements. The

researcher argues that prevention and detection

measures cannot be carried out partially in a

government or private agency to minimize fraud,

due to factors such as data limitations.

hidden by management. However, if the fourth

variables are carried out simultaneously, prevention,

detection and investigative audits will be able to

minimize fraud.

3.3.4 Coefficient of Determination Test Results

The Coefficient of Determination Test was

conducted to measure the ability of the independent

variables, namely Fraud Prevention, Detection,

Investigative Audits, and Professionalism; and in

explaining the dependent variables, namely

Minimizing Fraud. The results of the coefficient of

determination test can be seen in the adjusted R

square column, which is shown in the following

Table 4:

Table 4. Coefficient of Determination Test Results

Model Summaryb

Predictors: (Constant), prevention, detection,

investigative audit, professionalism

Dependent Variable: Effort to Minimize Fraud

The test results show the magnitude of the

multiple correlation coefficient (R), the coefficient

of determination (R Square). Based on the model

summary table above, the multiple correlation

coefficient value (R) is 0.846. This shows that the

variables of prevention, detection, investigative

audit and auditor professionalism have a very strong

relationship with the variable of efforts to minimize

fraud in the financial statements. The results in the

table above also show that the coefficient of

determination (R Square) is 0.716 and the value of

the adjusted coefficient of determination (adjusted

R2) is 0.692. This means that the variables of

prevention, detection, investigative audit and auditor

professionalism are able to explain 0.692 or 69.2%

of the variables of efforts to minimize fraud in

financial statements. While the rest, namely (100% -

69.2% = 30.8%) 30.8% is explained by other

variables that are not included in this research

model. There are many variables that can influence

efforts to minimize fraud in financial reports,

including the complexity of the auditor and whistle-

blower Aziz in [4].

3.4 Discussion of Research Results

3.4.1 The Effect of Fraud Prevention on Efforts

to Minimize Fraud in Financial Statements

The results of this study indicate that fraud

prevention have a significant effect on efforts to

minimize fraud in financial statements. These

results are consistent with research by [19], [20]

which states that preventive measures have a

significant effect on efforts to minimize fraud and

are consistent with research by Sidik in [21] which

states that preventive measures have a significant

positive effect on efforts to minimize fraud in

financial statements. This is because there is

awareness about fraud which, if you commit fraud,

will be subject to sanctions, namely dismissal so

that it will have a deterrent effect. Good supervision

within the company or institution, implementation

of a good control system and proper implementation

of Good Corporate Governance (GCG) so that fraud

prevention affect efforts to minimize fraud in

financial statements.

3.4.2 The Effect of Fraud Detection on Efforts to

Minimize Fraud in Financial Statements

The results of this study indicate that detection has

no significant effect on efforts to minimize fraud in

financial statements. Results this study is consistent

with research by Sidik in [21] which states that

detection has no significant effect on efforts to

minimize fraud. This is because there are limitations

of auditors in the implementation of fraud detection,

which is a challenge that needs to be faced by the

profession and academia. The existence of

competitive pressures, time pressures and

relationship pressures with clients can have an

impact on the success of fraud detection, and some

previous standards do not provide guidance in

providing directions for fraud detection. The new

standard is expected to bring new hope by

overcoming previous weaknesses, so that detection

does not affect efforts to minimize fraud in financial

statements.

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3.4.3 The Influence of Investigative Audits on

Efforts to Minimize Fraud in Financial

Statements

The results of this study indicate that investigative

audits have no significant effect on efforts to

minimize fraud in financial statements. The results

of this study are inconsistent with research by Iqbal

[12] which states that investigative audits have a

significant effect on efforts to minimize fraud. This

is because the investigative audit techniques used in

handling fraud are generally common ways in

auditing, such as physical examination,

confirmation, checking documents, analytical

reviews, asking for an oral or written explanation

from the auditee, recalculation and observing that

there are still no optimally applied, so that

investigative audits have no effect on efforts to

minimize fraud in the financial statements in this

study.

3.4.4 The Influence of Auditor Professionalism

on Efforts to Minimize Fraud in Financial

Statements

The results of this study indicate that auditor

professionalism has a significant effect on efforts to

minimize fraud in financial statements. The results

of this study are consistent with Aziz's research in

[4] which states that auditor professionalism has a

positive effect on the effectiveness of the forensic

auditor's ability to prove fraud and is consistent with

Sastiana's research in [19] which states that auditor

professionalism has a significant effect on fraud

prevention, so it can be concluded that the better the

professionalism of a person, the better. the auditor,

the easier it is for the auditor to find evidence of

fraud. The auditor's professional attitude must

prioritize the code of ethics in carrying out his

duties responsibly and objectively, because the

auditor has a professional spirit and always

encourages himself to realize professional work.

Professional auditors will maintain confidence in the

quality of audits in users of financial statements and

audit reports are a top priority so that fraud

committed by fellow auditors or superiors can be

detected to reveal fraud that has occurred, so that the

professionalism of the auditor affects efforts to

minimize fraud in financial statements [19].

4 Conclusion

This study aims to determine the effect of

prevention, detection, investigative audit and auditor

professionalism on efforts to minimize fraud in

financial statements. Respondents of this study

amounted to 52 internal auditors who work in

companies in Makassar City, South Sulawesi,

Indonesia. Based on the data that has been collected

and the results of the tests that have been carried

out, the following conclusions can be drawn:

1. Precautions have a significant effect partially on

efforts to minimize fraud in financial statements.

This is based on the significant value of the

preventive action variable which is less than

0.05, which is 0.000.

2. Detection does not have a significant effect

partially on efforts to minimize fraud in financial

statements. This is based on the significant value

of the detection variable greater than 0.05, which

is 0.743.

3. The investigative audit does not partially have a

significant effect on efforts to minimize fraud in

the financial statements. This is based on the

significant value of the investigative audit

variable greater than 0.05, which is 0.841.

4. Auditor professionalism has a significant partial

effect on efforts to minimize fraud in financial

statements. This is based on the significant value

of the auditor professionalism variable which is

less than 0.05, which is 0.000.

5. Precautions, detection, investigative audits and

auditor professionalism have a significant

simultaneous effect on efforts to minimize fraud

in financial statements. This is based on the

significance value of the F test results of 0.000.

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DOI: 10.37394/23209.2022.19.6

Natalia Paranoan, Sita Yubelina Sabandar,

Anthon Paranoan, Elisabet Pali,

Isak Pasulu

E-ISSN: 2224-3402

Volume 19, 2022

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Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

Natalia Paranoan: Ideas, formulation or evolution

of overarching research goals and aims. Also,

preparation, creation and/or presentation of the

published work by those from the original research

group, specifically critical review, commentary or

revision – including pre- or post-publication stages.

Sita Yubelina Sabandar: Development of

methodology and formal techniques to analyze

study data.

Anthon Paranoan testing of existing code

components

Elisabet Pali and Isak Pasulu were collecting

primary data for this paper

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.en

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WSEAS TRANSACTIONS on INFORMATION SCIENCE and APPLICATIONS

DOI: 10.37394/23209.2022.19.6

Natalia Paranoan, Sita Yubelina Sabandar,

Anthon Paranoan, Elisabet Pali,

Isak Pasulu

E-ISSN: 2224-3402

Volume 19, 2022