Accounting Research Journal of Sutaatmadja (ACCRUALS) Volume 09 Nomor 01 Tahun 2025 (Hal : 25-.
DOI : .
ttps://doi.
org/10.
35310/accruals.
https://ojs.
id/index.
php/accruals/index ISSN 2614-5286 (Prin.
ISSN 2615-0409 (Onlin.
SYSTEMATIC LITERATURE REVIEW: INVESTIGATIVE
AUDITING IN FRAUD DISCLOSURE
Muhammad Syahrudin1.
Irma Suryani2.
Wedi Rusmawan Kusumah3 STIE Gema Widya Bangsa Bandung12.
Universitas Widyatama Bandung3 ssh@gmail.
INFO ARTIKEL
ABSTRACT
Histori Artikel :
Tgl.
Masuk : 14-01-2025 Tgl.
Diterima : 10-02-2025 Tersedia Online : 30-03-2025 Keywords:
In terms of global economic growth.
Indonesia ranks 40th with the best economic growth out of 195 countries, with a growth of 4.
94 per cent in 2023.
Indonesia's growing economy does not escape the threat of fraud.
To detect someone committing fraud, signs or symptoms commonly called red flags are needed.
The existence of an investigative audit will produce red flags or signals of This research aims to find out how investigative audits can detect and reveal corruption by using examples of corruption cases that have occurred as literature studies to be theoretically analysed.
This study employs a SLR approach that explores investigative audits from various reference sources.
The results of the discussion by dissecting selected literature and reviewing fraud cases that occur, considering the researcherAos findings, it can be said that Cris Kuntadi is the most active researcher in the field of investigative auditing on fraud disclosure.
Fraud that occurs can be observed by the presence of red flags in a Perpetrators.
Living beyond means or lifestyle is one of the common characteristics of red flags which can be caused by personal financial need to cover this lifestyle Investigative audit, fraud, red flags, lifestyle INTRODUCTION In terms of global economic growth.
Indonesia ranks 40th with the best economic growth out of 195 countries, with growth of 4.
94 per cent in 2023.
Based on data from the Central Bureau of Statistics.
Indonesia's economic growth in the first quarter of 2024 was 5.
11% .
, an increase compared to 5.
04% .
in the previous quarter.
As part of the development of the National Strategic Project (PSN), economic growth in 2024 is expected to remain strong in the range of 5% .
This is supported by consumption and building investment.
While Indonesia's fiscal position continues to improve, the debt-to-GDP ratio continues to shrink significantly from the pandemic in 2020 of 6.
1% to 1.
65% in Overall.
Indonesia's financial system remained sound in Q1-2024 thanks to stable fiscal, monetary, and financial sector conditions (Badan Pusat Statistik.
Indonesia's growing economy is not immune to the threat of fraud.
Any means that can be used by a person or group of people to gain an advantage over another party by making false representations is included in the general term fraud Volume 09.
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01 Ae Maret (Carpenter & Reimers, 2.
Corruption, also known as bribery, occurs when a person gives something of value to another person in a position to influence their behaviour or judgement, while financial statement fraud occurs when a person presents false financial statements or financial data with the intent to mislead investors, auditors, and analysts about the true financial state of a company.
(Nigrini.
Based on ACFE data .
fraud is divided into three schemes but the perpetrators do not limit themselves to just one fraud scheme.
The figure below shows that 38% of fraud cases involve two or more schemes, overlapping cases generally occur between corruption and misuse of assets at 35% and 1% of cases involving only financial statement fraud.
This indicates that when someone is caught committing financial statement fraud, it is likely that they are also committing other types of fraud.
Source: ACFE .
Figure 1 Percentage of Fraud Cases Occurred The corruption is that it can cause businesses to become inefficient and divert human resources, technology, and capital from their most productive use for society (Tuanakotta, 2.
Here are 7 cases of corruption with the biggest losses that occurred in the world:
Table 1 Biggest Corruption Case
Nama Kasus / Tahun Jumlah Kerugian (US $) 1 Enron /2001 74 Milyar
2 Olimpiade Sochi Rusia / 2014
50 Milyar
3 Bank of Credit and Commerce 20 Milyar
International / 1990
4 1MDB Malaysia / 2015
4,5 Milyar
5 Siemens / 2006
2,5 Milyar
6 Satyam India / 2009 1,5 Milyar
7 FIFA /2015
300 Juta Sumber: goodstats.
id, 2024 An example of a major fraud case that befell Malaysia with the 1 Malaysia Development Berhad .
MDB) scandal in 2015, 1MDB itself was a state investment fund launched by the then Malaysian PM Najib Razak.
The case attracted international attention when US media outlet Wall Street published documents showing that the Malaysian PM received US$681 million in payments to his personal accounts and his stepson Riza Aziz spent tens of millions of dollars to fund a film starring Leonardo DiCaprio.
independent investigation by the US government found that senior officials and associates stole more than US$4.
5 billion from 1MDB between 2009 and 2015.
The relationship between fraud and the management of a company is the existence of agency theory by Jensen & Meckling .
which discusses the establishment of cooperation in the management of the company given by shareholders to management.
Information asymmetry between the two parties causes agency problems.
Although there shareholders of the company are considered as people who have economic ratios and are motivated by personal Therefore, management will do nothing to protect the interests of Accounting Research Journal of Sutaatmadja (ACCRUALS) This is because management also has an interest in maximising its welfare (Santana & Wirakusuma, 2.
The auditor, as an independent third party, serves as a shareholders to reduce this asymmetry (Syahrudin, 2.
Shareholders' auditors to provide fraud protection are reflected in the Policeman Theory.
The theory describes stakeholder expectations of auditors, including protection against fraud, warning of future bankruptcy, and general assurance of financial well-being.
(Dauda et al.
, 2.
Auditors are expected to play a role in disclosing fraud accuracy to prevent misstatements and detect fraud.
Fraud detection is an effort to obtain sufficient early indications of fraud and reduce the space for fraudsters to move (Nusa, 2.
One definition of forensic accounting is using auditing and investigative skills to examine financial statements that are being prepared in court.
However, not all forensic accountant work is defined in this (Dreyer.
Meanwhile, investigative audit is the process of collecting evidence that is acceptable by applicable law or evidence in accordance with applicable procedural or evidentiary law (Tuanakotta, 2019.
Investigative audits can be proactive or reactive.
When conducted proactively, forensic audits are used to detect possible fraud.
When conducted reactively, the audit is conducted when there are indications or preliminary evidence that fraud has occurred (Nur, 2.
To detect someone committing fraud, signs or symptoms commonly called red flags are needed.
An investigative audit will show signals of irregularity or red flags.
Some signals of irregularities that can lead to corruption include relationships between key employees and permitted vendors, confidentiality relationships that occur, lack of review of management approval, and errors in vendor approval (Singleton & Singleton, 2.
They may exhibit signs of fraudulent behaviour, such as shrewd relationships with buyers or suppliers, lavish behaviour, and pressure from family to appear successful.
In addition, they may experience excessive pressure from the company, financial problems, or dislike sharing tasks (Nur, 2.
The biggest corruption case in PT Timah in 2024 was the alleged corruption scandal of tin commodities from 20152022, causing ecological losses of IDR 271 trillion and ensnaring Helena Lim and Harvey Moeis.
Sandra Dewi's celebrity partner who is Crazy Rich Indonesia.
Harvey Moeis' life caught the public's attention when he had a lavish wedding with Sandra Dewi at Disneyland Japan in 2016, spending billions of rupiah.
In 2019, he also bought a private jet for his son, and on Sandra Dewi's birthday in 2023.
Harvey Moeis bought a Rolls Royce car for her birthday which is estimated to be worth 25 billion rupiah.
In the case of PT Timah, the corruption lasted for 7 years which shows that early detection of fraud is very important to reduce the amount of loss an organisation experience.
Fraud in the workplace usually lasts for twelve months, according to ACFE .
which proves that perpetrators can commit fraud for a year before being discovered.
However, the losses incurred by the company are greater if the fraud continues.
Several studies on the role of investigative audits in disclosing fraud have been conducted by Kristanti & Kuntadi .
Ramadhan & Mulyati .
Mulyandini & Simatupang .
and Sudarmadi .
with the final conclusion that investigative auditing and forensic accounting play an important role in helping business entities to find and Volume 09.
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01 Ae Maret prevent fraud through a careful and systematic approach based on evidence.
Investigative auditing enables competent and independent parties to discover and disclose actual fraud by thoroughly analysing the available evidence.
The purpose of this research is to find out how investigative audits can detect and reveal corruption.
To achieve this goal, this research conducts literature research on corruption cases that have occurred, and then the cases are theoretically analysed.
This research uses a systematic literature review method that distinguishes it from previous studies and this research explores investigative audits from various reference sources.
The formulation of the problems in this study are: .
Indonesia's economic growth is the best of 195 countries, with growth of 4.
94 per cent in 2023 and Indonesia's fiscal position continues to improve, the debt to GDP ratio continues to shrink significantly from the pandemic in 2020 of 6.
1% to 1.
65% in 2023, but this economic growth does not escape the threat of Fraud (Badan Pusat Statistik, .
38% of fraud cases involve two or more schemes, overlapping cases generally occur between corruption and asset misappropriation at 35% and 1% of cases involving only financial statement This indicates that when someone is caught committing financial statement fraud, they are likely to commit other types of fraud as well (ACFE, 2.
Auditors are expected to play a role in disclosing fraud by concentrating on mathematical accuracy to prevent misstatements and detect fraud.
If a condition is odd or different from normal circumstances, the auditor must be able to recognise red flags or signals of irregularity with an investigative audit.
The emergence of corruption in the tin case that lasted for 7 years resulted in a fantastic loss to the state of 271 trillion.
THEORETICAL FRAMEWORK
Agency Theory Agency theory explains the existence of a form of joint venture between the owner of capital and management in managing the business.
AoAn agency relationship is a contractual arrangement in which one or more parties .
he principal.
) hire another party .
he agen.
to carry out a service on their behalf, entailing the agent's delegation of certain decision-making authorityAo by Jensen & Meckling .
Conflicts of interest will occur when investors and management have an interest in maximising personal wealth.
The conflict that arises will result in differences in interests and the difficulty of uniting the desires between company owners and management, so that management actions are not always in accordance with the wishes of investors, thus encouraging investors to supervise Agency problems are often triggered by information asymmetry or imbalance of information conveyed by management to owners or shareholders.
Policeman Theory Problems arising from agency theory are often triggered by the imbalance of information conveyed by management to investors or company owners due to differences in interests and the difficulty of uniting the wishes of both parties, so that management actions are not always in accordance with the wishes of the principal which encourages the principal to supervise the company's operational activities by the agent.
To prevent or reduce this information imbalance, the presence of auditors is expected to help.
Policeman theory describes stakeholder expectations of auditors, including protection against fraud, warning of future bankruptcy, and Accounting Research Journal of Sutaatmadja (ACCRUALS) general assurance of financial well-being (Dauda et al.
, 2.
Policeman theory explains that audits rely on the principle of arithmetic accuracy, which means auditors must detect and prevent fraud.
Over the years, the focus of audits has changed from verifying the truth and fairness of financial statements to the need to provide sufficient assurance.
As a result, this theory could not explain the role and purpose of the audit so its weaknesses were refined back into Credibility Theory (Rahmawati et al.
Fraud Fraud is defined as an abuse of position at work to obtain personal gain by using organisational assets or resources (ACFE, 2.
Meanwhile.
Bologna et al.
defines fraud as Aoillegal deceit if the deceiver intends to profit financially from the deceptionAo.
No matter the size of the industry or the scope of the region, workplace fraud is a major threat to the operations of every Workplace fraud has an even greater impact on businesses that are often victims of financial crime.
While only a small percentage of employees have the ability to commit corporate fraud, it can be caused by many things, such as rationalisation, opportunity, chance and pressure that allow fraudsters to plan and carry out their fraudulent plans.
Investigative Audit One definition of forensic accounting is using auditing and investigative skills to examine financial statements that are being prepared in court.
However, not all forensic accountant work is defined in this way Dyreng et al.
, .
Meanwhile, an investigative audit is an examination or audit procedure intended to identify and reveal crime or fraud using methods, procedures, or techniques commonly used (Esnawati & Primasari, 2.
Auditors who will conduct investigations can help uncover fraud and corruption (Mulyadi & Nawawi, 2.
An investigative audit will show signals of irregularities or red flags.
Some of the signals of irregularities that can lead to corruption include relationships between key employees and permitted vendors, confidentiality relationships that occur, lack of review of management approval, and errors in vendor approval (Singleton & Singleton, 2.
They may exhibit signs of fraudulent behaviour, such as shrewd relationships with buyers or suppliers, lavish behaviour, and pressure from family to appear successful.
In addition, they may experience excessive pressure from the company, financial problems, or dislike sharing tasks (Nur, 2.
METHODS
This study conducted qualitative research with a descriptive approach.
Qualitative research is a type of research that conducts research in a natural object environment, with the researcher as the main tool (Sugiyono, 2.
To answer the research questions, the authors used the Systematic Literature Review (SLR) method, which is defined as the process of identifying, assessing, and interpreting research evidence (Kitchenham et al.
VosViewer software was also used as a tool in analysing the data.
The Research Question in the SLR study was created to maintain the focus of the research review.
The PICO criteria, which includes Population.
Intervention.
Comparison.
Outcomes was used to construct the question (Kitchenham et al.
, 2.
The following is the Research Question in this Volume 09.
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01 Ae Maret Table 2 Research Question Description RQ1 How is the development of research on investigative auditing and Fraud? RQ2 What is the role of investigative audit in disclosing fraud? This SLR method is used to identify, analyse, evaluate and interpret previous (Soebiartika Rindaningsih, 2.
A good literature review must be relevant, actual, and This SLR research learns more about investigative audits in fraud disclosure besides that the other purpose of this research aims to find solutions to the problem by uncovering relevant theories and identifying various relevant points of To ensure that the articles found after the search process fulfil the desired criteria.
Quality Assessment (QA) will be conducted on the articles.
The articles to be discussed must fulfil the inclusion and exclusion criteria and must be thoroughly discussed according to the Quality Assessment criteria below:
RESULTS AND DISCUSSION
Results To ensure that the articles found fulfil the desired criteria, after the search process.
Quality Assessment (QA) will be carried out on the articles.
Articles that will be discussed must meet the inclusion and exclusion criteria and must be discussed thoroughly in accordance with the Quality Assessment criteria in table 3 above.
The flowchart of the article selection process in SLR based on Moher et al.
, .
Table 3 Quality Assesment Description QA1 Whether the article fits the criteria of Investigative Audit and fraud? QA2 Does the article explain how investigative audits in fraud disclosure? QA3 Whether the article was published between 2022 and 2024.
QA4 Was the article published in an accredited national journal or international journal? Researchers use Publish or Perish (POP) software to search for previous research journals using sources from Google Scholar and then select articles according to specific criteria.
PoP can be used to conduct a literature review and select which scientific journals to use as references and references.
(Hutapea.
Figure 2 Article Selection Flowchart There are thirteen articles from Publish or Perish Software that meet the criteria of the Quality Assessment assessment, namely research conducted by Tambunan et al.
, .
Fernaldi & Ratnawati, .
Putri et al.
, .
Anfield & Fransiska .
Sukawanda & Kuntadi .
Avilla Anggun Arisendy & Tri Ratnawati .
Maharani et al.
Kuntadi et al.
, .
Lutfi et al.
Prasetiyo et al.
, .
Sakinah et , .
Urumsah et al.
, .
Makhmuro & Nurcahya .
Discussion The Development of Research on Investigative Audits and Fraud The first data analysis in the form of visualisation of research trends that can be Accounting Research Journal of Sutaatmadja (ACCRUALS) seen in Network Visualisation (Figure .
obtained three clusters with seven keyword items, the first cluster is effect, fraud and influence with occurences values of 22, 155, 13.
The second cluster is forensic accounting and role with occurences of 10 and 11, while the third cluster is audit and investigative audit with occurences of 84 and 40.
research keywords with the year of Audit and investigative audit keywords were published in 2024, research on fraud was published in 2022 while forensic accounting was published in The third data analysis in the form of a research development map based on the author (Co-Authorshi.
can be seen in the Network Visualisation Co-Authorship network below:
Figure 3 Network Visualization Occurences Figure 3 can be explained that the relationship between terms is in the form of nodes or spheres that represent keywords while edges describe the relationship between pairs of nodes to form a bibliometric network in research on investigative auditing and fraud whose research was conducted from 2018 to 2024 as many as 200 research journal articles derived from Google Scholar.
The second data analysis is in the form of a research development map based on the year of research publication which can be seen in the following Overlay Visualisation:
Figure 4 Overlay Visualization In the figure above, it can be explained that the colour of the nodes represents the Figure 5 Network Visualization CoAuthorship The figure above can be explained that the nodes describe the research authors with edges as the relationship between authors with the scope of investigative auditing and fraud.
Author Cris Kuntadi is the centre of the bibliometric network of authors in the field of investigative auditing and fraud in the research year period 2018 to 2024.
The Role of Investigative Audit in Fraud Disclosure The results of the selection of articles through SLR show that the results of the investigative audits affect fraud disclosure in business entities in Indonesia.
This can happen because investigative audits are carried out by conducting preventive and repressive supervision.
Preventive or preventive supervision is carried out to determine whether the entity has carried out the development and Volume 09.
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Repressive supervision carried out by investigative audits can be said to be effective if it can quickly correct weaknesses in fraud control design as a follow-up to the discovery of these The average duration of Perpetrators .
committing fraud is for a full year before being detected, the longer the duration of a fraud occurs, the greater the loss the company will experience (ACFE.
Reflecting on the PT Timah case, where the case was only revealed after the fraud had been running for seven years so that the amount of loss value experienced was very large.
Apart from investigative audits, one of the supporting components in fraud disclosure studied by the authors is whistleblowing and auditor professional The relationship between whistleblowing and fraud disclosure is characterised by indications of fraud reported by whistleblowers as an early warning that fraud may occur.
The more whistleblower reports received, the more likely fraud will occur (Urumsah et al.
If the whistleblowing system does not run online, the direct supervisor is the party that receives reports from the whistleblowers (ACFE, 2.
The relationship between professional scepticism and fraud disclosure is discussed by Kuntadi et al.
, .
that auditors with low scepticism tend not to find signs of fraud, on the other hand, high auditor scepticism will tend to find signs of fraud or red flags.
Red Flags are signs of fraud and are clues or indications of something unusual.
If the situation is odd or different from normal, the auditor must be able to recognise red flags.
84% of fraudsters will show one red flags in research conducted by (ACFE, 2.
The fraud that occurs can be observed by the frequency of Perpetrators showing red flags or signs of fraud, the most common red flags are Living beyond means or lifestyle (ACFE, 2.
In the triangle fraud theory by Cressey .
, it is explained that pressure can cause fraud, one of which can include the lifestyle of the perpetrator caused by personal financial need or personal financial need to cover this lifestyle, an example of a case can be seen from the PT Timah case where the lifestyle of the perpetrators is very luxurious.
Conclusion The results of the discussion by examining fraud cases that occur, it can be concluded that:
The development of research on investigative audits and fraud in 2018 to 2024 based on research trends from bibliometric processing of Vosviewer Software obtained three clusters with seven keyword items, the first cluster is effect, fraud and influence.
The second cluster is forensic accounting and role while the third cluster is audit and investigative audit.
The keywords audit and investigative audit were published in 2024, research on fraud was published in 2022 while forensic accounting was published in 2021 while based on researchers found that Cris Kuntadi is the most active researcher related to investigative audit research in revealing Investigative Audit plays an important and influential role in revealing fraud.
Fraud that occurs can be observed by the presence of red flags in a Perpetrators.
Living beyond means or lifestyle is one of the common characteristics of these red The existence of pressures can Accounting Research Journal of Sutaatmadja (ACCRUALS) cause fraud, one of which can include the lifestyle of the perpetrator caused by personal financial need or personal financial need to cover this lifestyle, an example of a case can be seen from the PT Timah case where the lifestyle of the perpetrators is very luxurious.
IMPLICATIONS AND
LIMITATIONS
This research is expected to help learn how to detect fraud by looking at the symptoms of fraud caused by the The limitations of this research are that researchers still lack data and longer research and it is hoped that future researchers will use SLR software such as watase uake.
REFERENCES