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The Effect Of Auditor Experience And Audit Fees On Fraud Detection With Professional Skepticism As A Moderating Variable 1*Nabilah Fathurohmah, 2Wasfini 1*Sekolah Tinggi Ilmu Ekonomi Tri Bhakti.
Bekasi.
Indonesia 2Universitas Terbuka.
Banten.
Indonesia 2Email: Fwasfini@gmail.
1*Corresponding author e-mail: nabilahfath29@gmail.
Article Info Abstract Keywords:
o Auditor Experience.
o Audit Fees.
o Professional Skepticism.
o Fraud Detection Purpose Ae This study aims to examine how Auditor Experience and Audit Fee on Fraud Detection.
As well as assessing how Professional Skepticism moderates the effect of Auditor Experience and Audit Fee on Fraud Detection.
Article History Received: 06 Ae 01 - 2025 Accepted: 15 Ae 01 - 2025 Published: 30 Ae 01 - 2025 Design/methodology/approach Ae This study uses quantitative research methods, using primary data obtained through The research sample consisted of 130 respondents who were employees of the finance department at financial service sector companies registered in the Bekasi City area.
Data analysis was perfomed using Partial Least Square (PLS) software with Moderated Regression Analysis.
Findings Ae The results of this study found that Auditor Experience has a negative and insignificant effect on Fraud Detection.
Audit Fee has a positive and significant effect on fraud Detection.
Skepticism strengthens the relationship between Auditor Experience and Fraud Detection.
Professional Skepticism does not strengthen Audit Fee on Fraud Detection.
Research limitations/implications Ae This research has several All research variables were measured using a questionnaire, so the data obtained were the peceptions of Respondents were not guided in detail, so there is a possibility of subjectivity in the answers and obstacles in waiting for INTRODUCTION The rise of fraud cases that occur in the work environment is a form of crime that occurs in an organizational or corporate environment.
Fraud can occur due to several things such as poor internal control of the company so that there is a gap for someone to commit fraud.
Fraud is an act with the intention of deceiving others by claiming or being credited with unjustified achievements (Alleyne et al.
, 2.
According to (Sood & Bhushan, 2.
Fraud in the financial sector has always been a JOURNAL OF ACCOUNTING
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major concern for governments around the world.
On the other hand, the financial sector is constantly working to improve their fraud risk management frameworks, both to meet regulatory directives and to respond to the increasing incidence of fraud.
While some risks in the financial sector have been around since the beginning, they continue to change as technology standards continue to evolve.
The evolution of fraud from Hawala transactions, ponzi schemes and inadequate due diligence to money laundering, identity theft and cybercrime has put serious issues in front of regulators to tackle financial crime more vigorously than ever.
The types of financial fraud themselves that are commonly committed according to (Sood & Bhushan, 2.
namely money laundering, bribery and corruption, identity theft, accounting fraud, phishing and online banking fraud (Artika & Faisal, 2024.
Faisal et al.
, 2.
Such as the phenomenon of large-scale fraud that occurred at PT Asabri on the page https://wartapemeriksa.
id/?p=26308, where the Supreme Audit Agency (BPK) concluded that there was fraud in the management of finances and investment funds at PT Asabri (Perser.
during 2012-2019 which caused losses of 22.
7 trillion.
The fraud is an act of agreement in arranging the placement of investment funds in several company owners or shareholders in the form of mutual fund shares, where the mutual fund shares are risky and illiquid investments so that they do not provide benefits to PT Asabri.
In the case of PT Asabri, fraud detection by analyzing investment transactions and financial statements to find suspicious placement of funds or not in accordance with the investment policy should be.
Periodic internal audits and continuous monitoring can be the key to detecting fraud and preventing fraud, by implementing fraud detection with a strong monitoring system and effective internal audits, fraud is likely to be detected early.
Fraud detection is an action that must always be improved and carried out in the company every period to ensure that there is no act of fraud that occurs in the company that can harm the company and the people in the company's context.
This research is in line with (Rafnes & Primasari, 2.
conducted at KAP in the Central Jakarta area, (Yusrianti, 2.
conducted at Public Accounting Firms (KAP) in the South Sumatra region, located in Palembang City.
Jambi.
Bengkulu.
Lampung and Bangka Belitung Provinces, (Laitupa & Hehanussa, 2.
conducted at the Financial and Development Supervisory Agency (BPKP) Representative of Maluku Province, stating that Work Experience and Professional Skepticism have a positive effect on Fraud Detection.
This is because work experience and professional skepticism are one of the factors that come from within or internally an auditor, where the more experience and the higher the professional skepticism an auditor has, the higher the auditor's ability to detect fraud.
In addition, this study is also in line with (Korompis & Latjandu, 2.
conducted on external auditors from the Public Accounting Firm (KAP) operating in the Manado area, (Arief et al.
, 2.
conducted at the Public Accounting Firm (KAP) in the Central Jakarta area, which states that Audit Fee affects Fraud Detection.
This is because if the amount of fee spent is due to the higher risk and reputation of the KAP, so that the results of the auditor's examination will be better and of higher quality.
The purpose of this study was to determine and examine the effect of Auditor Experience and Audit Fee on Fraud Detection with Professional Skepticism as a moderating variable.
This research is expected to provide information about fraud detection and benefits for readers and future researchers.
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Detecting fraud is one way to minimize fraud.
Therefore, researchers are interested in examining the effect of Auditor Experience and Audit Fee on Fraud Detection with Professional Skepticism as a moderating variable, on the grounds that until now there are still many cases of fraud and to explore deeper information about the effect of Audit Fee in detecting fraud because there are still few who examine this matter.
LITERATUR REVIEW
Atribution theory According to Fritz Heider in 1958 who proposed attribution theory, attribution theory is a theory that explains how to interpret an event related to individual thoughts and behavior.
According to (Kiswanto & Maulana, 2.
states that a person's behavior is determined by a combination of internal forces and external forces.
This attribution theory aims to find out the reasons for each behavior, nature, attitude and character of a person in carrying out an action, so that it can be identified whether the action leads to deviations that are carried out intentionally where it is fraud or unintentionally which means that it is an error.
Fraud hexagon Theory Fraud hexagon theory is a theory that explains fraud put forward by Vousinas, 2019.
his journal (Vousinas, 2.
explains that this theory is the result of the development of the fraud triangle theory proposed by Donal Cresey .
a criminologist whose research focuses on embezzlers - people he calls Auviolators of trustAy.
One leg of the triangle represents financial need that cannot be shared.
The second leg represents perceived opportunity, and the last leg represents rationalization.
The fraud hexagon itself consists of six components, namely stimulus .
, capability .
, collusion .
, opportunity .
, rationalization .
, and ego.
The component added in the fraud hexagon theory is the component regarding collusion.
Auditor Experience According to (Astuti et al.
, 2.
Auditor experience refers to the number of years the auditor has worked in the audit field, the types of audit cases that have been handled, and the various situations and scenarios that have been experienced.
This experience includes knowledge of audit techniques, understanding of specific industries, and the ability to recognize signs of fraud.
Audit Fees According to Sukrisno Agoes .
2: .
audit commissions are compensation in the form of money or goods or other forms given to or received from clients or other parties to obtain an engagement from clients or other parties.
Fraud Detection Fraud detection is about adopting a proactive approach to fraud by carrying out audit projects to seek out and eradicate specific fraud.
This can be done in conjunction with the police who will provide advice and get involved if there is a clear case of criminal activity (Pickett.
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Professional Skepticism According to (Wicaksono & Amalia, 2.
Professional Skepticism is the attitude adopted by the auditor when conducting an audit.
This means that the auditor remains independent of the entity, its management and staff when completing audit work.
In a practical sense, this means that auditors maintain an inquiring mind and thoroughly investigate all evidence presented by their clients.
Hypotheses development Auditor experience is the experience of the tasks performed by the auditor while working, where auditors who have experience will be more sensitive in understand every single thing that happens during the auditor's work process.
With that, auditors who have more experience will be able to detect fraud more easily.
This is due to the many cases that have been resolved during his time as an auditor.
This hypothesis is in line with previous research conducted by (Rafnes & Primasari, 2.
which states that Aiditor Experience has a positive effect on Fraud Detection because with Auditor Experience the quality and results provided by auditors will be better.
H1: Auditor experience has a positive effect on fraud detection Audit Fee is a fee charged by the auditor to the client to conduct an audit examination of the financial statements.
The audit fee will be received by the auditor after the auditor's work process is complete, where it describes the costs required to get the company's financial statements audited thoroughly and in accordance with the accounting standards that have been set to get definite results.
Therefore, the higher the fee given to the auditor, the better the level of audit quality.
Likewise in (Korompis & Latjandu, 2.
Audit Fee research refers to the amount of fees earned depending on the level of difficulty, expertise required, risk in the assignment and the cost structure of the Public Accounting Firm (KAP).
This hypothesis is in line with previous research conducted by (Pratiwi et al.
, 2.
which states that Audit Fee has a positive effect on fraud detection because the fee given affects auditor performance.
H2: Audit Fee has a positive effect on fraud detection Professional skepticism is considered important for an auditor in assessing audit Skepticism is a critical attitude in assessing the reliability of the assertion or evidence obtained, so that in carrying out the audit process an auditor has a high enough confidence in an assertion or evidence he has obtained and also considers the adequacy and suitability of the evidence obtained(Anggriawan, 2.
With professional skepticism, auditors can be better at detecting fraud because with this skepticism the auditor will not easily believe the recognition given by management without valid evidence of the recognition provided.
With the auditor's professional skepticism and the experience possessed by the auditor, it will strengthen the auditor's competence in detecting fraud so that the resulting audit quality will also be better.
H3: Professional skepticism strengthens the relationship between auditor experience and fraud detection.
Auditors are required to have a high level of professional skepticism in conducting JOURNAL OF ACCOUNTING
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audits, especially of the possibility of fraud even though the fraud has not necessarily occurred.
A skeptical auditor will not take for granted the explanation from the client, but will ask questions to obtain reasons, evidence and confirmation related to certain objects.
Without applying professional skepticism, auditors will only find misstatements caused by errors and it is difficult to find misstatements caused by fraud, because fraud will usually be hidden by the perpetrator (Laitupa & Hehanussa, 2.
Professional skepticism allows auditors to be more vigilant about the unreasonable amount of audit fees provided by clients.
This happens if the audit fee is too high and causes the auditor to neglect his duties in order to maintain a good relationship with his client.
With that, fraud is not detected properly or ignored so that the resulting audit quality is also poor.
H4: Professional skepticism weakens the relationship between Audit Fee on Fraud Detection RESEARCH METHOD This study uses hypothesis testing, namely to determine the effect between the independent variables of Auditor Experience and Audit Fee on the dependent variable, namely Fraud Detection and Professional Skepticism as a moderating variable.
The unit of analysis used is individuals, namely employees of institutions or companies engaged in the financial services sector as research subjects.
The following are the variables used in this study:
Variable Auditor Experience Audit Fee Professional Skepticism Fraud Detection Table 1.
Variabel Measurement Independent Variable Dimensions Make a Decision Task intensity and career development Work ability Length of service Competence Audit Risk Service Complexity Level of Expertise Cost Structure.
Critical Thingking Professional Precise Assumptions Careful In The Examination Of Client
Financial Statements Understanding Of Audit Evidence Self-confidence Variabel Dependen
Understand SPI
Characteristics Of Fraud
Audit Environment Audit Method
Source Aulia 2013
Sarira 2018
Aulia 2013
Aulia 2013
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Form Of Fraud Source: data processed in 2024 The data analysis method used in this study was the Partial Least Square (PLS) PLS is a structural equation modeling (SEM) solution method that is better suited for this study than other SEM approaches.
With the following equation, there are two test models: Model 1 is a novel test, while Model 2 is a non-novel test:
PK = 0 1PA 2AF 3PA*SP 4AF*SP A
RESULTS
Responden Demographics The respondents in this study were conducted in the Bekasi City area.
The data collected is primary data, which is obtained through distributing questionnaires to respondents who meet the predetermined criteria.
researchers have succeeded in collecting data from 130 respondents, of which 52 are male with a percentage of 40% and 78 are female with a percentage of 60%, in which female respondents dominate.
Based on their age, where the most respondents are 18-21 years old with 52 respondents or with a percentage of 40%, then the second is respondents aged 22-25 years where there are 52 respondents or with a percentage of 40%, and the last is with respondents aged 26-29 years as many as 26 Respondents or with a percentage of 20%.
Based on the level of education where respondents with a high school / vocational high school education level are 65 respondents or with a percentage of 50%, then based on the Diploma i (D.
education level there are 26 respondents or with a percentage of 20%, and the last is respondents with a Bachelor's degree there are 39 respondents or with a percentage of 30%.
And based on the length of work, where respondents with a length of work of < 1 year and a length of work of 3 - 5 years have the same number, namely 39 respondents or with a percentage of 30%, then respondents with a length of work of 1 - 2 years have a total of 40%.
Convergent Validity and Reliability Testing In convergent validity, measurements using reflective indicators are assessed based on the correlation between item scores or component scores and construct scores.
A reflective indicator is considered to have good value if the correlation is more than 0.
Convergent validity relates to the principle that measurements of a construct must have a high correlation.
Convergent validity is achieved when two different instruments, but measuring the same construct, show a high correlation.
In PLS, convergent validity tests with reflective indicators are carried out by assessing the loading factor .
orrelation between item or component scores and construct score.
on indicators that measure the construct (Abdillah & Jogiyanto, 2.
There are two main criteria for determining whether the outer model .
easurement mode.
meets the requirements of convergent validity for reflective constructs, namely: the outer loading value> 0.
7 and the average variance extracted (AVE) value> 0.
If these two criteria are met, then the variable is considered to have adequate convergent validity (Hair et al.
, 2.
However, in some cases, especially in newly developed questionnaires, the loading requirement above 0.
7 is often not met.
Therefore, loading values between 0.
40 to 0.
70 can still be considered and maintained (Ghozali, 2.
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The Hypothesis Test The hypothesis in this study can be determined through model calculations using the PLS bootstrapping technique.
From the results of the bootstrapping calculation, a statistical t value will be obtained for each relationship or path.
This hypothesis testing is carried out with a significance level of 0.
The hypothesis can be accepted if the original sample value is in accordance with the hypothesis.
The results of the calculation for hypothesis testing in this study using the direct effect of the independent variable on the dependent variable and the moderating variable are obtained as follows:
Tabel 2.
Path Coefisient Path Structure Directions PA -> PK
AF -> PK
SP * PA -> PK
SP * AF -> PK
R-squared Adjusted R- squared Original Sample (O) P-Values Source: data processed in 2024 AE: Auditor Experience.
AF: Audit Fee.
FD: Fraud Detection.
PS: Professional Skepticism.
AE*PS: Moderating Professional Skepticism on Auditor Experience.
AF*PS: Moderating Professional Skepticism on Audit Fees Explanatoty The results of hypothesis testing regarding the effect of Auditor Experience on Fraud Detection show an original sample value of -0.
088 and a p-value of 0.
229, where the significance level is 0.
000> 0.
05, so H1 is not accepted.
With that, it can be stated that Auditor Experience has a statistically significant negative effect on Fraud Detection.
The results of hypothesis testing regarding the effect of Audit Fee on Fraud Detection show an original sample value of 099 and a p-value of 0.
000, where the significance level is 0.
000 <0.
05, then H1 is accepted.
With that, it can be stated that Audit Fee has a statistically significant positive effect on Fraud Detection.
The results of hypothesis testing regarding the effect of Audit Experience * Professional Skepticism on Fraud Detection, obtained from the p-value of 0.
026, where the significance level is 0.
000 <0.
05, then H4 is accepted.
With that, it can be stated that Professional Skepticism can strengthen the relationship between Audit Experience and Fraud Detection.
The results of hypothesis testing regarding the effect of Audit Fee * Professional Skepticism on Fraud Detection, obtained from the p-value of 0.
000, where the significance level is 0.
000 <0.
then H4 is accepted.
With that, it can be stated that Professional Skepticism can strengthen the relationship between Audit Fee and Fraud Detection.
DISCUSSIONS
Auditor experience has a negative and insignificant effect on fraud detection.
In this study, the auditor's experience shows that it has no effect on fraud detection, this JOURNAL OF ACCOUNTING
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is in line with research (Adisaputri, 2.
conducted at the Public Accounting Firm (KAP) registered in South Jakarta.
Which states that auditors with a lot of experience are not always better at detecting fraud, for reasons that may be more experienced auditors have high selfconfidence by relying on their work habits that have been formed, so they tend to ignore new or unusual suspects.
Indicators of auditor experience consist of making decisions, task intensity and career development, work ability, length of work, and competence, it explains that every financial employee must be able to make firm decisions in every problem and not look at relationships with clients while working, task intensity and career development are also very important to be able to detect fraud fraud that has never occurred before so that work ability will also continue to increase over time and increase its competence in order to produce quality financial reports and can be trusted by the public.
Audit fees have a positive and significant effect on fraud detection.
In this study, audit fees have a positive and significant effect on fraud detection, which is in line with research (Korompis & Latjandu, 2.
stating that fees are rewards in the form of money received by public accountants after carrying out their audit services, the amount depends on the risk of the assignment, the complexity of the services provided, the level of expertise needed to carry out the audit services.
So that the large audit fee is caused by the reputation of the KAP where the higher the reputation, the better the auditor audit results The indicators of the audit fee itself include audit risk, complexity of services, level of expertise, and cost structure, this explains that the amount of fees incurred to conduct an audit is measured by the existing audit risk and the complexity of the services required.
Every company must be able to choose auditors who have good quality by considering fees that are in accordance with the company's capabilities.
Therefore, audit fees are also very influential in detecting fraud.
Professional skepticism reinforces the relationship between Auditor Experience and Fraud Detection In this study, professional skepticism was stated to strengthen the relationship between auditor experience and fraud detection.
With the existence of professional skepticism, auditors who have a lot of experience also need to continue to apply skepticism to everything that happens when doing assignments.
Fraud in the financial services sector that occurs for several periods is a form of negligence of an auditor in auditing, it can be caused by the auditor who lacks in applying his skepticism in carrying out assignments so that it is easy to be deceived by perpetrators who commit fraudulent acts.
Therefore, every auditor must continue to apply professional skepticism in detecting fraud to produce quality audit reports.
Professional skepticism does not reinforce the relationship between Auditor Experience and Fraud Detection In this study, professional skepticism was stated not to strengthen the relationship between audit fees and fraud detection.
The increasing amount of fees can cause the auditor to be careless about fraudulent acts or even the auditor falls into fraudulent acts committed by his clients because they are tempted by fees with large nominal amounts.
Auditors must be aware of fees that should not be carried out, during the audit process the auditor must remain independent in every condition to detect fraud and obtain objective audit results.
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CONGLUSIONS Auditor experience has a negative and statistically insignificant effect on fraud detection.
The results of this study show that the higher the auditor's experience in working is still not enough to get quality fraud detection results.
Audit fees have a positive and statistically significant effect on fraud detection.
The results of this study show that the higher the audit fee incurred by the company for audit services with a high KAP reputation, the higher the results will be.
Professional skepticism can strengthen the relationship between Auditor Experience and Fraud Detection.
The results of this study show that auditors who have a lot of work experience and always apply professional skepticism will be better at detecting fraud.
Professional skepticism does not strengthen the relationship between audit fees and fraud The results of this study show that with professional skepticism the higher the fees given must be watched out, with fees that should not be possible that the client has the intention to incite the auditor to cover up the fraudulent acts committed, with the auditor must be skeptical of all things that happen at the time of assignment and always be independent and objective in making decisions in detecting fraud.
Theoretical Implications The results of writing this research are expected to be able to add to the academic literature and be used to develop a more comprehensive theoretical model in understanding similar problems.
This research can also be a reference in testing the auditor experience variable, audit fee as an independent variable, fraud detection as a dependent variable and professional skepticism as a moderating variable on financial staff incorporated in financial sector companies.
Managerial Implications This study produces findings that are useful for financial staff who are members of financial sector companies working to provide reinforcement to the understanding of the auditor's experience, ensure that the experience of the auditors is not negligent in their work and continue to apply professional skepticism in every incident that occurs during the time the audit is carried out to detect fraud.
By applying this, it will provide maximum results in fraud detection, increase independence, integrity and objectivity which have a long useful life for both auditors and companies being audited.
Policy Implications The results of this study can help regulators and governments to prevent fraud by improving education, training and awareness by developing educational programs that strengthen the auditor experience.
Regulators need to conduct a thorough review to ensure that the principles of audit fees are applied effectively and consistently to companies and improve a corporate culture that has integrity, is objective and transparent in presenting results in financial reports so as to produce quality reports and free from potential fraud.
Limitations The limitations of this researcher are that all the research variables, namely the auditor
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using a questionnaire, so that the data obtained is the respondent's perception.
Respondents were obtained through WhatsApp so that the questionnaire obtained was not guided in detail in its filling.
As a result, there is a possibility of subjectivity in the respondent's response to the questions asked and obstacles in waiting for confirmation from the respondent.
Suggestion The author's suggestion is that it is recommended to research with a larger number of respondents in order to increase the validity and reliability of research results.
Increase the accuracy of the respondent data received so that the results of the research will be stronger.
addition, the object for the research is more focused on respondent criteria that are more varied in other sectors.
REFERENCE