The Islamic Rural Bank (IRB) Bumi Rinjani Kepanjen is a financial institution that has Sharia
principles in carrying out its activities conventionally. In improving the development of financial institutions, it
is necessary to assess the company's financial performance. Thus, researchers want to know how the financial
performance of IRB Bumi Rinjani Kepanjen during the 2016-2020 period.
This study aims to analyse the impact of external factors and internal factors on the risk factors of
regional development bank. Sample used in this study is regional development banks in Indonesia in the period
of 2015 – 2019.
Corporate Governance Practices of Indian Public Sector and Private Sector Ban...scmsnoida5
Banks play a major role in providing credit to the
productive sectors of the economy as well as act
as facilitators of financial inclusion and foremost
source of employment. Whereas, the Banking
Sector Acts as catalysts in promoting the growth
of economy, these also possess the capability to
cause calamity to an economy. Well governed
banks have the ability to cope up with risk
associated with them and benefit to the economy.
The present study is an attempt to investigate the
Corporate Governance practices being adopted
by the Indian Public Sector Banks and Private
Sector Banks. For this purpose, two Public Sector
Banks and Private Sector Banks have been
selected taking into account the top banks in the
BSE 100 index ranked on the basis of market
capitalization. In order to study the quality of
Corporate Governance practices of the banks,
an assessment tool – Corporate Governance
Disclosure Index (CGDI) has been developed.
The data has been collected from the annual
reports of the banks from the financial year 2002
to 2014. Further, to investigate the difference in
both the sector banks, student’s t-test has been
applied. The findings of the study reveal that
both the sector banks have significant difference with respect to Board related parameters,
Remuneration Committee sub-index and Non-
Mandatory sub-index.
A Dissertation Report On "Study Of Net Interest Margin {NIM} Of Selected INDIAN Public & Private Sector Banks"
Has Undertaken 10 Years Financial Data Of Selected Banks i.e. 2008-2017 for the Study.
The Islamic Rural Bank (IRB) Bumi Rinjani Kepanjen is a financial institution that has Sharia
principles in carrying out its activities conventionally. In improving the development of financial institutions, it
is necessary to assess the company's financial performance. Thus, researchers want to know how the financial
performance of IRB Bumi Rinjani Kepanjen during the 2016-2020 period.
This study aims to analyse the impact of external factors and internal factors on the risk factors of
regional development bank. Sample used in this study is regional development banks in Indonesia in the period
of 2015 – 2019.
Corporate Governance Practices of Indian Public Sector and Private Sector Ban...scmsnoida5
Banks play a major role in providing credit to the
productive sectors of the economy as well as act
as facilitators of financial inclusion and foremost
source of employment. Whereas, the Banking
Sector Acts as catalysts in promoting the growth
of economy, these also possess the capability to
cause calamity to an economy. Well governed
banks have the ability to cope up with risk
associated with them and benefit to the economy.
The present study is an attempt to investigate the
Corporate Governance practices being adopted
by the Indian Public Sector Banks and Private
Sector Banks. For this purpose, two Public Sector
Banks and Private Sector Banks have been
selected taking into account the top banks in the
BSE 100 index ranked on the basis of market
capitalization. In order to study the quality of
Corporate Governance practices of the banks,
an assessment tool – Corporate Governance
Disclosure Index (CGDI) has been developed.
The data has been collected from the annual
reports of the banks from the financial year 2002
to 2014. Further, to investigate the difference in
both the sector banks, student’s t-test has been
applied. The findings of the study reveal that
both the sector banks have significant difference with respect to Board related parameters,
Remuneration Committee sub-index and Non-
Mandatory sub-index.
A Dissertation Report On "Study Of Net Interest Margin {NIM} Of Selected INDIAN Public & Private Sector Banks"
Has Undertaken 10 Years Financial Data Of Selected Banks i.e. 2008-2017 for the Study.
Factors Affecting Return on Assets (ROA) in Banking Companies Listed in Indon...AJSSMTJournal
Bank performance is a description of each economic results can be achieved by the banking company in a
particular period through the activities of the company to generate profits effectively and efficiently. The performance level
was good bank increase public confidence to use the financial services of banks. One indicator to assess the financial
performance of a bank is ROA. The purpose of this research is to analyze the effect of CAR, NPL, LDR, NIM, BOPO, Inflation,
and BI Rate on ROA of banking companies listed on the Stock Exchange partially and simultaneously. The analysis method
used is Multiple Linear Regression Analysis, which is processed using the SPSS program version 25. The results showed that
partially CAR, NPL, Inflation, and BI Rate did not significantly influence ROA of banking companies listed on the IDX, while
LDR, NIM and BOPO significantly influence ROA on banking companies listed on the IDX. Simultaneously all independent
variables have a significant effect on ROA in banking companies listed on the IDX, where the contribution of all independent
variables is 95.80% and the remaining 4.20% influenced by other variables that have not been examined in this research.
A COMPARATIVE STUDY ON FINANCIAL PERFORMANCE OF PUBLIC SECTOR BANKS IN INDIA:...kishoremeghani
Banking sector is one of the fastest growing sectors in India. Today’s banking sector becoming more complex. The objective of this study is to analyze the Financial Position and Performance of the Bank of Baroda and Punjab National Bank in India based on their financial characteristics. This study attempts to measure the relative performance of Indian banks. For this study, we have used public sector banks. We know that in the service sector, it is difficult to quantify the output because it is intangible. We have chosen the CAMEL model and t-test which measures the performance of bank from each of the important parameter like capital adequacy, asset quality, management efficiency, earning quality, liquidity and Sensitivity.
IOSR Journal of Business and Management (IOSR-JBM) is an open access international journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications.
IOSR Journal of Business and Management (IOSR-JBM) is an open access international journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications.
Performance Analysis of a sample Micro finance Institutions of Ethiopia by ...belay224358
Outreach and sustainability of Ethiopian MFIs
This study assesses the performance of Ethiopian MFIs in terms of various criteria set forth by the Micro banking Bulletin. Reaching the poorest customers, while at the same time being financially self-sufficient, is a challenge for the Ethiopian microfinance industry.
The study examines data from the MIX MARKET website for 16 Ethiopian MFIs. Study results indicate that Ethiopian MFIs performed well in terms of breadth of outreach, cost management, efficiency and productivity. They also charged low interest rates. They, however, are poor performers on depth of outreach. Findings indicate that these MFIs are:
Not reaching the poorest of the poor;
Allocating a lower proportion of their total assets to loans;
Not using their debt capacity properly;
Allocating more loan loss provision expense than the industry average, and have a high PAR.
The study also finds that MFI profitability and sustainability depend on its size. There is a trade-off between serving the poor and being operationally self-sufficient. Finally, MFI age correlates positively with efficiency, productivity. Use of debt financing also makes firms more productive.
The Impact of Liquidity on Profitability on Selected Banks of Bangladesh Samia Ibrahim
This research seeks to establish a relationship between liquidity and profitability which may assess in liquidity management in the banks in Bangladesh.There has been a wide range of study on the concepts of liquidity and profitability. My research differs from the previous works as such research was not done in the context of Bangladeshi banking sector using recent data.
Effect of Credit Risk Management Practices on Profitability of Listed Commerc...iosrjce
The study sought to analyze the effect of credit risk management practices on profitability of listed
commercial banks at Nairobi Security Exchange in Kenya. A descriptive research design was adopted. The
population comprised of listed commerical banks where a sample of 55 employees was purposively sampled. It
was established that credit appraisal practices had a significant positive effect on profitability and that it
explained 14.4% of the variations in profitability. The results also found that credit monitoring had a
significative positive effect on profitability and that 47.8% of the variance in profitability. The findings further,
indicated that debt collection practices had a positive and significant relationship and explained 17.4% of the
variations in profitability. Lastly, the results indicated that credit risk governance had a positive and significant
effect on profitability. Based on the study findings the study concluded that credit appraisal, debt collection and
credit risk governance have a significant positive effect on profitability. It is thus recommended that commercial
banks should have stringent credit appraisal and debt collection policies, credit personnel at all levels must
work in co-ordination in order to ensure that credit is collected in a timely manner and banks should also adopt
credit risk governance frameworks which can be attained by making the process of interaction between senior
management and the Board more effective
The Effect of Working Experience, Integrity, Competence, and Organizational C...iosrjce
External There search objectives are to seek empirical evidence about the influence of personal
characteristics of the auditor to the audit quality. The population in this study is the auditor who worked on
owned companies in Libya. The data used in this research is the primary data. For the analysis used validity
and reliability test as instrument test. This research used regression analysis and for hypothesis test used F test
and t test. From the result of the research showed that work experience, integrity, competence and commitment
to organizational has significant influence to audit quality. Work experience has the biggest value of arithmetic
and beta coefficient. Hence, the Integrity variable has the strongest influence instead of another variables so
that variable Work experience has a dominant influence toward quality of audit results.
Factors Affecting Return on Assets (ROA) in Banking Companies Listed in Indon...AJSSMTJournal
Bank performance is a description of each economic results can be achieved by the banking company in a
particular period through the activities of the company to generate profits effectively and efficiently. The performance level
was good bank increase public confidence to use the financial services of banks. One indicator to assess the financial
performance of a bank is ROA. The purpose of this research is to analyze the effect of CAR, NPL, LDR, NIM, BOPO, Inflation,
and BI Rate on ROA of banking companies listed on the Stock Exchange partially and simultaneously. The analysis method
used is Multiple Linear Regression Analysis, which is processed using the SPSS program version 25. The results showed that
partially CAR, NPL, Inflation, and BI Rate did not significantly influence ROA of banking companies listed on the IDX, while
LDR, NIM and BOPO significantly influence ROA on banking companies listed on the IDX. Simultaneously all independent
variables have a significant effect on ROA in banking companies listed on the IDX, where the contribution of all independent
variables is 95.80% and the remaining 4.20% influenced by other variables that have not been examined in this research.
A COMPARATIVE STUDY ON FINANCIAL PERFORMANCE OF PUBLIC SECTOR BANKS IN INDIA:...kishoremeghani
Banking sector is one of the fastest growing sectors in India. Today’s banking sector becoming more complex. The objective of this study is to analyze the Financial Position and Performance of the Bank of Baroda and Punjab National Bank in India based on their financial characteristics. This study attempts to measure the relative performance of Indian banks. For this study, we have used public sector banks. We know that in the service sector, it is difficult to quantify the output because it is intangible. We have chosen the CAMEL model and t-test which measures the performance of bank from each of the important parameter like capital adequacy, asset quality, management efficiency, earning quality, liquidity and Sensitivity.
IOSR Journal of Business and Management (IOSR-JBM) is an open access international journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications.
IOSR Journal of Business and Management (IOSR-JBM) is an open access international journal that provides rapid publication (within a month) of articles in all areas of business and managemant and its applications. The journal welcomes publications of high quality papers on theoretical developments and practical applications inbusiness and management. Original research papers, state-of-the-art reviews, and high quality technical notes are invited for publications.
Performance Analysis of a sample Micro finance Institutions of Ethiopia by ...belay224358
Outreach and sustainability of Ethiopian MFIs
This study assesses the performance of Ethiopian MFIs in terms of various criteria set forth by the Micro banking Bulletin. Reaching the poorest customers, while at the same time being financially self-sufficient, is a challenge for the Ethiopian microfinance industry.
The study examines data from the MIX MARKET website for 16 Ethiopian MFIs. Study results indicate that Ethiopian MFIs performed well in terms of breadth of outreach, cost management, efficiency and productivity. They also charged low interest rates. They, however, are poor performers on depth of outreach. Findings indicate that these MFIs are:
Not reaching the poorest of the poor;
Allocating a lower proportion of their total assets to loans;
Not using their debt capacity properly;
Allocating more loan loss provision expense than the industry average, and have a high PAR.
The study also finds that MFI profitability and sustainability depend on its size. There is a trade-off between serving the poor and being operationally self-sufficient. Finally, MFI age correlates positively with efficiency, productivity. Use of debt financing also makes firms more productive.
The Impact of Liquidity on Profitability on Selected Banks of Bangladesh Samia Ibrahim
This research seeks to establish a relationship between liquidity and profitability which may assess in liquidity management in the banks in Bangladesh.There has been a wide range of study on the concepts of liquidity and profitability. My research differs from the previous works as such research was not done in the context of Bangladeshi banking sector using recent data.
Effect of Credit Risk Management Practices on Profitability of Listed Commerc...iosrjce
The study sought to analyze the effect of credit risk management practices on profitability of listed
commercial banks at Nairobi Security Exchange in Kenya. A descriptive research design was adopted. The
population comprised of listed commerical banks where a sample of 55 employees was purposively sampled. It
was established that credit appraisal practices had a significant positive effect on profitability and that it
explained 14.4% of the variations in profitability. The results also found that credit monitoring had a
significative positive effect on profitability and that 47.8% of the variance in profitability. The findings further,
indicated that debt collection practices had a positive and significant relationship and explained 17.4% of the
variations in profitability. Lastly, the results indicated that credit risk governance had a positive and significant
effect on profitability. Based on the study findings the study concluded that credit appraisal, debt collection and
credit risk governance have a significant positive effect on profitability. It is thus recommended that commercial
banks should have stringent credit appraisal and debt collection policies, credit personnel at all levels must
work in co-ordination in order to ensure that credit is collected in a timely manner and banks should also adopt
credit risk governance frameworks which can be attained by making the process of interaction between senior
management and the Board more effective
The Effect of Working Experience, Integrity, Competence, and Organizational C...iosrjce
External There search objectives are to seek empirical evidence about the influence of personal
characteristics of the auditor to the audit quality. The population in this study is the auditor who worked on
owned companies in Libya. The data used in this research is the primary data. For the analysis used validity
and reliability test as instrument test. This research used regression analysis and for hypothesis test used F test
and t test. From the result of the research showed that work experience, integrity, competence and commitment
to organizational has significant influence to audit quality. Work experience has the biggest value of arithmetic
and beta coefficient. Hence, the Integrity variable has the strongest influence instead of another variables so
that variable Work experience has a dominant influence toward quality of audit results.
The ever increasing regulations and expansion of organisations across the globe into new markets exposed the organisations to greater regulatory and compliance risks. To Know More : https://www2.deloitte.com/in/en/pages/audit/articles/internal-audit.html
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2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
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1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
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G386166
1. American International Journal of Business Management (AIJBM)
ISSN- 2379-106X, www.aijbm.com Volume 3, Issue 8 (August 2020), PP 61-66
*Corresponding Author: Vita Citra Mulyandini www.aijbm.com 61 | Page
The Impact of Internal Audit Function and Internal Auditor
Competency on Detection of Fraudulent Financial Statement
Survey in Internal Auditors of State-Owned Bank in Indonesia
Vita Citra Mulyandini
(Economics and Business, Universitas Jenderal Achmad Yani, West Java - Indonesia)
*Corresponding Author: Vita
ABSTRACT: - The results of this research revealed, the internal audit function and internal auditor
competency against detection of fraudulent financial reporting of internal auditor state owned bank in Indonesia.
The research population was 489 internal auditor voters. Using the Slovin formula, the number of samples was
220 respondents. The list of questions in this research was structured data information from internal auditors of
state-owned banks in Indonesia. The respondents in this research were internal auditors and the audit committee.
Result of this research, internal audit function and internal auditor competence has positive impact on financial
statement fraud detection, and simultaneously internal audit function variable and internal auditor competence
have positive significant effect on fraudulent financial reporting detection. The most dominant variable whose
influence is internal auditor competence, this can be seen from the high β value of the other variables. The
competencies possessed by state owned bank auditor can help the organization to detect intentional fraud in
preparing financial statements that provide biased and misleading information. The competence possessed by
internal auditors can be seen from the procedural skills they have, audit experience, education level, so that they
have the ability to improve the effectiveness of added value in internal audit, which is governance, risk
management, and control processes so that in the end the financial statements that become the entity's activity
reports for the year walk free from material misstatement, trustworthy, and reliable.
KEYWORDS :- internal audit function, internal auditor competence, fraudulent financial reporting detection
I. INTRODUCTION
Fraud in financial reports is a high level of crime that can harm the company. Fraud in financial
statements is one of the serious problems that must be addressed immediately because people rely on financial
statements as an important data on the company's financial performance in decision making. This form of fraud
covers the true financial condition by engineering financial statements, misuse of accounting principles and
changes or falsification of corporate accounting records motivated to fraudulent financial reporting when
companies face a strong economy so that companies report results that look more profitable than having to
follow provisions, as well as when ownership structures encourage financial performance for short-term
orientation. A company under financial pressure (economic factors) and worsening financial conditions can
motivate people in the company to take actions intended to improve the appearance of the financial position of
company.
To reveal the perpetrators of fraud is very difficult because they are in the company environment, only
the symptoms of fraud can be seen and even after the perpetrators of fraud have done their actions. SAS 99 said
that, responsibility for detecting fraud, explains internal and external auditors using red flags among them:
opportunities, incentives and pressures, and rationalization it is called fraud triangle (Albrecht et al., 2012). To
catch fraud perpetrators, auditors must continue to practice to add capabilities in the field of auditing. This
knowledge can be obtained from formal education that is expanded and augmented among others through
auditor training and experiences in the practice of audit (Asthon, 1991). Components forming auditor
competence consist of psychological characteristics, decision making strategies, knowledge components,
thinking ability, and task analysis (Nursyofah, 2012).
In order for the internal auditor of a state-owned bank to run and work properly, the internal auditor
must carry out the applicable internal audit function. Public Company must establish an audit committee in
order to carry out its jobs effectively, the audit committee also requires an internal audit function. The current
phenomenon of economic globalization provides awareness in order to realize good corporate governance in
State-Owned banks in Indonesia. This demand is felt to be reasonable because so far State-Owned banks have
been managed in a less transparent and less professional manner, so it is far from the principles of good
corporate governance. As a business entity, the role of State-Owned banks is felt to be quite dominant in terms
of its assets, which in total amount to hundreds of trillions of rupiah (Herawati, 2013).
2. The Impact of Internal Audit Function and Internal Auditor Competency on Detection of Fraudulent...
*Corresponding Author: Vita Citra Mulyandini www.aijbm.com 62 | Page
II. LITERATURE REVIEW AND HYPOTHESES
Internal auditor activity can reduce 35% of the occurrence of fraud. This is where the importance of the
role of an internal auditor, with the authority duties, and possessed by the internal auditor can play a role in the
detection and prevention of fraud in the institution where he works. Therefore, to be able to detect internal fraud
the auditor must have expertise as the existence of knowledge about the definite symptoms, the intent of each
problem and the expertise to resolve the problem (ACFE, 2014).
2.1 Internal Audit Function
The scope of internal audit must include examining, and evaluating the adequacy and effectiveness of
the organization's internal control system and the quality of work in carrying out the responsibilities given
(Mulyadi, 2014). And it can be seen that internal audit must evaluate and contribute to the improvement of
governance, risk management and control processes using a systematic and disciplined approach (Reding,
2013), (Tugiman, 2011)
2.2 Competency Internal Auditor
Detecting fraud is difficult. need special competence in carrying out the examination. The expertise in
detecting fraud is important for the auditor to carry out his duties and detect fraud (Roe, 2001). Fraud in
financial statements requires special competencies in addition to accounting competencies, such as skills,
expertise, experience. The longer the auditor audits, especially cases of fraud, auditors will be more accurate in
detecting fraud (Walsh, 2004).
2.3 Detection of Fraudulent Financial Reporting
Fraud in the financial statements is an action taken deliberately to enhance your financial statements
(Belkaoui, 2004). This is done to enrich yourself, your family, and management. The perpetrators of fraud in
financial statements always provide corrections that cheating is a good thing for example inflating profits,
lowering the burden so that the financial statements look beautiful. The benefits are annual bonuses, promotion,
and a luxurious life.
2.4 Fraud Theory
(Cressey,1953) who concluded fraud consisted of three general conditions (Dorminey et al, 2012):.
Figure 1. Fraud Triangle
a. Opportunity
Someone cheating definitely when there is an opportunity. If the opportunity comes fraudsters will take
advantage of the opportunity to commit fraud. Cheating in financial statements is usually done at certain times
for example when the boss is not in the office, he will use the opportunity to commit fraud. The higher the
position, the greater the opportunity for cheating.
b. Pressure
Pressure to commit fraud is more dependent on individual conditions, such as facing financial problems, bad
habits such as gambling and drinking; or have unrealistic expectations / goals. Financial problems are generally
caused by urgent needs and cannot be helped by others.
c. Rationalization occurs when someone builds justification for cheating. For example, someone claims to
take company money, but he pretends to only borrow and will return the money after receiving a salary or
quibble that he deserves because he has worked hard for the company.
3. The Impact of Internal Audit Function and Internal Auditor Competency on Detection of Fraudulent...
*Corresponding Author: Vita Citra Mulyandini www.aijbm.com 63 | Page
2.4 Conceptual Framework
The relationship between the variables used is seen as Figure 2, and each relationship between the
independent variable and the dependent variable represents the hypothesis.
Figure 2 Conceptual Framework
2.5 Research Hypothesis
The hypothesis in this study is how the variable x (independent) internal audit function and the
competence of internal auditors, affect the variable y (dependent) of fraud in financial statements, and how the
two independent variables x simultaneously affect the dependent variable.
III. RESEARCH METHODE
This research is survey explanatory research was used to obtain descriptive, systematic or factual and
accurate descriptive or depictions of facts and the relationship between variables studied.The population of the
research were all internal auditors and audit committees of state-owned banks in Indonesia, totaling 489
participants. Referring to the Slovin formula with a tolerance of 5%, the number of samples is 220
respondents,using multiple linear regression.
IV. FINDINGS AND DISCUSSION
4.1 Characteristic Respondents
The selected sample in this research was 220 respondents from the total questionnaire that was
distributed only returned a total of 182 questionnaires, an analysis of the returned questionnaire and from the
questionnaire that was eligible to be analyzed was 160 questionnaires or by 73% so that the total sample was
160 respondents. The basis of the analysis is obtained through the processing of primary data that is from
questionnaires that have been sent to respondents. Primary data consists of questionnaires in the form of case
studies that are used to assess internal auditors in detecting fraudulent financial reporting.
4.2 Instrument Testing Results
All three variables tested in this study have been successfully tested for validity and reliability. Results
of testing the validity of the independent variables and the overall dependent variable has a correlation number
above 0.3
which means that overall valid data is used to measure the variables to be examined. For the reliability test, it
shows number 0.770 which one greater than 0.70 so that the data is reliable and can be continued in further
analysis.
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4.3 Testing Multiple Linear Regression
Table 1 Multiple Regression Output
Source: SPSS V.23
Based on the calculation results, we get the equation of multiple linear regression as follows:
Y = 134,393 + 0.499 X1 + 0.524 X2 + e
a) A constant of 134,393 means that if the Internal Audit Function and the Internal Auditor Competency value
is 0 then the Fraudulent Financial Reporting Detection value is 134.339
b) Internal Audit Function Regression coefficient of 0.499 states that each addition of the internal audit
function by 1 unit, it will increase the Detection of Financial Reporting Fraudulent Financial Reporting by 0.499
c) Internal Auditor Competency regression coefficient of 0.524 states that for each addition of internal auditor
competence by 1 unit, it will increase Detection of Financial Reporting Fraudulent Financial Reporting by
0.524.
d) The regression coefficient / β of 0.499 and 0.524 indicates that there is a variable relationship. Positive
correlation shows that the relationship is unidirectional. The better the Internal Audit Function and the Internal
Auditor Competency, the better Detection of Fraudulent Financial Reporting.
4.4 Analysis Coefficient of Determination
Table 2 Coefficient Determination
Source: SPSS V.23
Coefficient of determination is 0.330 or 33%. It shows that the independent variables jointly influence
the dependent variable by 33%. The influence of the independent variable by 33% can be said to be small on the
dependent variable, while the remaining 67% can be explained by other variables outside the regression model
above.
4.5 Hypothesis Test
Table 3 F-test for multiple linear regression
Source: SPSS V.23
The F-count value of 3.659> F-table (n-k-1 = 157) is 2.655 and the significance value is 0.028 <0.050,
so that there is a significant simultaneous from the variable Internal Audit Function and Internal Auditor
Competency. All independent variables together can provide a significant impact on the Detection of Fraudulent
Financial Reporting.
Table 4 T- test for multiple linear regression
Source: SPSS V.23
5. The Impact of Internal Audit Function and Internal Auditor Competency on Detection of Fraudulent...
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Internal Audit Function variable t-count of 2.016 when compared with t table 1.975 obtained t count > t
table = 2.016> 1.975. Meanwhile the significance value of the internal auditor function is 0.045 when compared
with α = 5%, 0.045 <0.05 is obtained. Ho is rejected, this means that partially the Internal Audit Function has a
significant impact on the detection of fraudulent financial reporting.
Internal Auditor Competency has a t-value of 2.096 when compared with the value of t table 1.975, it is
obtained t-count> t table = 2.096> 1.975. Meanwhile the significance value of the Internal Auditor Competency
is 0, 038 when compared with α = 5%, it is obtained 0. 038 <0.05. Ho is rejected, this means that partially the
Internal Auditor Competence has a significant impact on the detection of fraudulent financial reporting.
V. CONCLUSIONS AND RECOMMENDATIONS
This research produces the following conclusions: 1). The independent variable, namely the internal
audit function, has a significant effect on the detection of financial statement fraud. Internal audits function to
prevent and detect irregularities that occur in organizations according to Petrascu (2014). In addition,
Soeharmoro (2012) concluded in his research that there was an influence of the character of the internal auditor
on the detection of fraud. Then the results of Gras-gill (2012) conducted research on internal audit and financial
reporting, where the internal auditor's function influences openness, integrity and standard of financial reports,
and internal audits are able to evaluation and explain problems of finding. In line with Coram et.al, (2006)
proved there is a very strong influence between organizations that have an internal audit function with fraud
detection. Wilopo (2006), in his research that analyzed the factors that impact the trend of accounting fraud: a
research of general companies and state-owned enterprises in Indonesia. Salameh (2011), internal auditors are
able to detect fraud in the company from their knowledge. This is in accordance with the internal audit function,
which is detecting fraud. It is proved that auditors internal was competent in detecting fraud compared to
external auditors. 2) The second result of this research is that the independent variable of internal auditor
competence has a great effect on the detection of financial statement fraud. This means that the better
competency of internal auditors, the better the detection of financial statement fraud. Client business
understanding, audit experience, auditor ability to detect fraud have a positive impact on fraud detection
strategies according to Lianitami (2016). The variable of competence influencing fraud detection was
successfully proved by Sulistyowati (2015). Auditor competence has a great impact to sense fraud in audits.
This proves that more competent auditors will be able to improve the ability to detect fraud Idawati (2015), from
Widyastuti (2009) research, namely the internal auditor's competence influences the auditor's ability to detect
fraud. Continuing education can improve the ability of internal auditors to detect fraud, the technical
competency of internal auditors will increase credibility in the financial reporting process (Kranacher, 2008).
3)The internal audit function together with internal auditor competency are simultaneously able to influence the
fraudulent detection of financial reporting, and the contribution of a greater influence is indicated by the internal
auditor competency variable. The most dominant variable influences the competence of internal auditors. This
can be seen from the high value of β from other variables.
Recommendation in this research :1) Internal auditors need competence to be able to support fraud.
Cheating is difficult to detect because it can only be detected from symptoms to detecting fraudulent actions in
the preparation of financial statements. In order to improve competence, internal auditors must be supported
with education and experience such as participating in the CFE (Certified Fraud Examiner) fraud certification
program and other supporting certifications, taking public speaking classes to improve communication skills.
Training needs to be provided in the form of seminars and group discussions on red flags and other forms of
cheating. 2) For the government, it is necessary to support each professional certification program provided by
each professional institution by conducting training that can give internal auditors recognition of their abilities.
Input for other researchers need to expand scope: 1) The independent variable in this research still
cannot contribute significantly to the dependent variable. From statistic result adjusted R2
value which is only
able to reach 33%. Thus, it is recommended for further researchers to add independent variables that
theoretically affect the financial statement fraud detection. If the next researcher wants to add new variables it is
recommended to use the variables of experience, independence and professionalism. 2) In this research only
using state-owned banks in Indonesia. Future studies are suggested using other state-owned bank companies.
Because of course every company is very risky of fraud in the preparation of financial statements. In addition to
state owned banks, researchers can then add Regional Development Banks (BPD).
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*Corresponding Author: Vita
(Economics and Business, Universitas Jenderal Achmad Yani, West Java - Indonesia)