scholarly journals The Effectiveness Of The Auditing Standards To Detect Fraudulent Financial Reporting Activities In Financial Statement Audits In Malaysia

2011 ◽  
Vol 8 (9) ◽  
Author(s):  
Glen D. Moyes ◽  
Hesri Faizal Mohamed Din ◽  
Normah H. Omar
Keyword(s):  
Financial Incentive ◽  
Demographic Factors ◽  
Developed Countries ◽  
Internal Controls ◽  
Demographic Factor ◽  
Financial Statement ◽  
Red Flags ◽  
Red Flag ◽  
The Relationship ◽  
Sas 99

In identifying relevant red flags to be used to detect possible fraud in financial statements, this study adopts the International Auditing Standard AI240 and adapts the US-based Statement of Auditing Standard No 99 (SAS 99). Both SAS 99 and AI240 classify the red flags into three categories: Opportunity, Pressure, and Rationalization. Opportunity Red Flags are found in situations that are ideal for people to commit fraud more easily due to ineffective internal controls, inadequate supervision or managers overriding internal controls. Pressure Red Flags are circumstances in which people have a financial incentive to commit fraud such as falsely overstating sales or profits to receive their bonuses or exerting pressure on managers to reduce actual expenses to be under budgeted costs. Rationalization Red Flags are situations where people have certain traits and abilities to commit fraud and justify it with false reasons which they believe are true. A Red Flag Questionnaire which contains 15 demographic multiple choice questions, followed by a five-point Likert scale with questions for 14 Opportunity Red Flags, 15 Pressure Red Flags and 11 Rationalization Red Flags was developed and distributed to three groups of auditors: External, internal and governmental. The study indicates the direct or inverse relationships between each demographic factor and each red flag. These relationships were identified by using multiple regression models. Three types of relationships are possible: direct, inverse and no relationship. These three types of relationships are as follows: (1) the relationship between the level of fraud-detecting effectiveness of each Opportunity Red Flag and each demographic factor, (2) the relationship between the level of fraud-detecting effectiveness of each Pressure Red Flag and each demographic factor, and (3) the relationship between the level of fraud-detecting effectiveness of each Rationalization Red Flag and each demographic factor. These relationships indicate which specific professional demographic factors are more likely associated with more effective fraud-detecting red flags. In contrast, other relationships also indicate which specific demographic factors are more likely associated with less effective fraud-detecting red flags. In conclusion, this research project should be conducted in other countries, so the result from one country can be compared to the results from other countries. Some results may vary between developed countries and developing countries. The learning curve or the period of time necessary for auditors to learn how to use red flags and then interpret the findings may also explain differences in the results between countries. This study may enhance the auditors understanding of the different levels of fraud-detecting effectiveness of red flags as well as when the auditors may benefit from using them in financial statement audits.

scholarly journals Professional Demographic Factors That Influence Iranian Auditors Perceptions Of The Fraud-Detecting Effectiveness Of Red Flags

2010 ◽  
Vol 9 (1) ◽  
Author(s):  
Weifang Yang ◽  
Glen D. Moyes ◽  
Hamed Hamedian ◽  
Azar Rahdarian
Keyword(s):  
Financial Reporting ◽  
Demographic Factors ◽  
Red Flags ◽  
Fraudulent Financial Reporting ◽  
Internal Auditors ◽  
Red Flag ◽  
The Relationship

The purpose of this study is to explore the relationship between professional demographic factors concerning external and internal auditors and the perceived level of effectiveness of the Statement of Auditing Standard (SAS) No. 99 red flags in detecting fraudulent financial reporting activities as perceived by external and internal auditors. The six hypotheses are: (1) the type of auditors using red flags to detect fraud, (2) highest degrees received by auditors, (3) areas that auditors majored in at universities, (4) auditors’ accumulated knowledge of red flags, (5) auditors who have or have not used red flags to detect fraud, and (6) auditors whohave or have not received in-house red flag training.  The six hypotheses explore how six professional demographic factors may influence the level of fraud-detecting effectiveness of the SAS No. 99 red flags as perceived by 227 external and internal auditors in Iran.  The results of this study indicate that all six hypotheses were accepted.   In conclusion, the level of fraud-detecting effectiveness of these red flags as perceived by the Iranian auditors may be influenced by the following factors: (1) the type of auditors, (2) the highest degrees received by auditors, (3) areas that auditors majored in at universities, (4) knowledge about red flags accumulated by auditors, (5) auditors whohave or have not previously used red flags to detect fraud, and (6) auditors whohave or have not previously received in-house red flag training.

Fraud Detection and Investigation: Microcomputer Consulting Services

1999 ◽  
Vol 14 (1) ◽  
pp. 99-115 ◽  
Author(s):  
Bonita K. Peterson ◽  
Thomas H. Gibson
Keyword(s):  
Fraud Detection ◽  
Internal Controls ◽  
Financial Statement ◽  
Sufficient Evidence ◽  
Red Flags ◽  
Fine Line ◽  
Consulting Services ◽  
Financial Statement Audit ◽  
Audit Team ◽  
University Setting

This nonfictional case of inventory fraud in a university setting exposes students to fraud detection and investigation. These skills are becoming increasingly important for auditors, as evidenced by the alarming rate of fraud. The accounting profession has acknowledged the seriousness of this issue with the issuance of SAS No. 82, Consideration of Fraud in a Financial Statement Audit, developed in part to improve detection of frauds by auditors. The case raises many of the fraud-related issues faced by accountants: recognizing red flags indicative of fraud; the importance of a good system of internal controls; the profile of the typical fraud perpetrator; the fine line auditors walk when investigating a fraud; the need to develop an audit team with the appropriate level of expertise which may require members from a variety of disciplines (e.g., investigative, legal and forensic areas); and the difficulty of obtaining sufficient evidence to prosecute and convict perpetrators.

scholarly journals The Relationship between Demographic Factors in Adult Patients with Stroke

2020 ◽  
Vol 7 (4) ◽  
pp. 14
Author(s):  
Samad Shams-Vahdati ◽  
Alireza Ala ◽  
Eliar Sadeghi-Hokmabad ◽  
Neda Parnianfard ◽  
Nasim Ahmadi Sepehri ◽  
...  
Keyword(s):  
Significant Relationship ◽  
Demographic Data ◽  
Demographic Factors ◽  
Patient Characteristics ◽  
Developed Countries ◽  
Adult Patients ◽  
Stroke Severity ◽  
Statistical Population ◽  
The Mean ◽  
The Relationship

Background: Developing countries are challenging with stroke as the third cause of death in developed countries and the most popular neurologic disease which results in disability. This study was designed to assess the relationship between demographic factors and early outcome in adult patients with difference type of stroke. Methods and Materials: A retrospective register review was performed from March 2017 to March 2018. ED medical document (chart) were reviewed by a neurologist or physician to obtain the clinical diagnosis, patient characteristics. Their demographic data (such as age, gender), NIHSS score and MRS score were filled in questionnaire. the significant variables were verified in a multivariable model to achieve an attuned estimate of effect. Results: A total of 861 patients with stroke were included in the analysis; the male and female sex in the statistical population were 56% and 43%; the mean age of the patients was 14.32 ± 61.74. The mean NIHSS (16.08±10.51) & MRS (3.66) scores were evaluated, respectively 47% severe stroke (NICHSS>16). There was no significant relationship between age increase and NIHSS increase (P = 0.86). Conclusion: Aging has a significant relationship with increased stroke. Gender and age differences in risk of stroke outcomes are mostly described by variations in physical characteristics and stroke severity of the patients.

scholarly journals The relationship between key audit matters in the new auditor's report and the risks reported in the management report and the estimates and judgments in the notes to the financial statements

2016 ◽  
Vol 90 (12) ◽  
pp. 580-613 ◽  
Author(s):  
Arjan Brouwer ◽  
Peter Eimers ◽  
Henk Langendijk
Keyword(s):  
The Netherlands ◽  
Information Needs ◽  
Balance Sheet ◽  
Financial Statements ◽  
Internal Controls ◽  
Financial Statement ◽  
It Systems ◽  
Strong Focus ◽  
The Relationship ◽  
Management Report

For decades, auditors have communicated their opinion on financial statements with standard wordings in the auditor’s report. However, stakeholders expect more information from the auditor. The limited transparency regarding an auditor’s actual activities, has contributed to the dissatisfaction concerning the functioning of auditors. The new (extended) auditor’s report is an answer to the information needs of stakeholders. The key audit matters reported by the auditor provide new insights to financial statement users with respect to significant estimates and risks reported in the financial statements. It may be expected from the auditor that he pays extra attention to the most significant estimates and risks. This article contains an examination of the degree to which reported key audit matters match with the significant risks presented in the directors’ reports, and with the significant accounting policies and estimates in the notes. We have studied management reports, financial statements and auditor’s reports of 50 companies listed in the Netherlands (at the AEX and Midkap index) in 2015. Our study shows that the key audit matters in the new auditor’s report often correspond with the significant accounting policies and estimates as they are reported by management in the notes. However, only in ten percent of the cases, the risks presented in the directors’ reports are mentioned as key audit matters in the new auditor’s report. Auditors have a strong focus on balance sheet items as key audit matters. Many companies recognize the riskiness of issues like reliability and continuity of IT systems and complying with regulation, but these are hardly mentioned as key audit matters. This is also a general finding of our study for issues related to the internal controls of the audited companies.

scholarly journals The Differences In Perceived Level Of Fraud-Detecting Effectiveness Of SAS No. 99 Red Flags Between External And Internal Auditors

2011 ◽  
Vol 5 (6) ◽  
Author(s):  
Glen D. Moyes
Keyword(s):  
Financial Reporting ◽  
Financial Statement ◽  
Red Flags ◽  
Perceived Effectiveness ◽  
Font Size ◽  
Fraudulent Financial Reporting ◽  
Internal Auditors ◽  
External Auditors ◽  
Effectiveness Rating ◽  
Red Flag

<p class="MsoNormal" style="text-align: justify; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">The purpose of this study is to examine the differences and the causes for the differences between external and internal auditors regarding the perceived levels of fraud detection of the 42 red flags found in Statement of Auditing Standard (SAS) No. 99.<span style="mso-spacerun: yes;">&nbsp; </span>SAS No. 99 requires the 42 red flags to be used in financial statement audits in order to detect fraudulent financial reporting activity.<span style="mso-spacerun: yes;">&nbsp; </span>No differences were found between external and internal auditors with respect to overall perceptions.<span style="mso-spacerun: yes;">&nbsp; </span>However, 17 of the 42 red flags had significant differences regarding the effectiveness of red flags in the detection of fraud.<span style="mso-spacerun: yes;">&nbsp; </span>For the external auditors, the extent of use and exposure to red flags were significant predictors regarding perceived effectiveness.<span style="mso-spacerun: yes;">&nbsp; </span>For internal auditors, perceived fraud-detecting effectiveness was a function of one&rsquo;s internal and total audit experience.<span style="mso-spacerun: yes;">&nbsp; </span>Surprisingly, gender differences occurred with both external and internal auditors with females rating the red flag effectiveness consistently higher than male auditors.<span style="mso-spacerun: yes;">&nbsp; </span>With the exception of two red flags, external auditors displayed a higher degree of consensus regarding the effectiveness rating of each red flag than internal auditors.<span style="mso-spacerun: yes;">&nbsp; </span>When asked to identify the more effective red flags based on the SAS No. 99 categories, both groups of auditors perceived the attitude/rationalization red flag category as the most effective red flags. </span></span></p>

Pengaruh Faktor Demografi Dan Iklim Organisasi Terhadap Niat Whistleblowing Internal

2017 ◽  
Vol 4 (1) ◽  
pp. 12-22
Author(s):  
Priyastiwi Priyastiwi
Keyword(s):  
Data Analysis ◽  
Data Collection ◽  
Organizational Climate ◽  
Demographic Factors ◽  
Financial Statement ◽  
Research Use ◽  
Analysis Method ◽  
Financial Statement Fraud ◽  
Internal Whistleblowing ◽  
Collection Methods

This study aimed to examine the effect of demographic factors and organizational climate on the intention of internal whistleblowing. The sample was an accountant who had worked as an auditor. Data collection methods using questionnaires with financial statement fraud case scenarios. This research use ANOVA data analysis method to examine demographic factors include age, gender, and experience, as well as organizational climate on the intention of internal whistleblowing. The results showed only the experience of demographic factors that influence internal whistleblowing. Besides internal whistlelowing also influenced by organizational climate in the company.Keyword: Demographics, Organizational Climate, Whistleblowing

Peranan Whistleblowing Dalam Meningkatkan Integriti Anggota Polis Diraja Malaysia (Pdrm): Kajian Ke Atas Kontinjen Perak

Sains Insani ◽  
2018 ◽  
Vol 2 (1) ◽  
pp. 17-27
Author(s):  
Megat Ayop Megat Arifin ◽  
Abd. Halim Ahmad
Keyword(s):  
Quantitative Analysis ◽  
Demographic Factors ◽  
Positive Perception ◽  
External Threats ◽  
Positive Practices ◽  
The Impact ◽  
The Relationship

Whitsleblowing is one of the positive practices in organizations that are able to raise the level of integrity among the members of an organization. However, the roles of whistleblowing also inevitably invites a response, especially among members of the organization itself. This is because such practices are viewed as one factor that may be detrimental to the organization in addition to revealing the reporter (whistleblower) to some external threats and intimidation of discrimination within the organization. This paper is an attempt to examine the relationship between perceptions of members of the Royal Malaysian Police (RMP) Contingent of Perak through the role of whistleblowing practices to increase the perception of the integrity of the members. Next, identify the purpose of the whistleblowing and its effect on the integrity of the members of the organization. This study used a descriptive quantitative analysis to identify patterns of relationship that exists between the perception of whistleblowing practices with perceptions of increased integrity based on three basic variables of demographic factors, response to whistleblowing and the impact of making the report. The results showed that members of the Perak’s police have a positive perception of whistleblowing practices which are seen to be done in improving the integrity of the members.Keywords: whistleblowing, perception, RMP members, culture, integrity, organization, influence. ABSTRAK: Whitsleblowing merupakan salah satu amalan positif dalam organisasi yang mampu untuk meningkatkan tahap integriti ahli-ahli dalam sesebuah organisasi. Namun begitu, amalan whistleblowing juga turut tidak dapat mengelak daripada mengundang pelbagai respon khususnya dalam kalangan ahli organisasi itu sendiri. Amalan sebegini turut dilihat sebagai salah satu faktor yang boleh memudaratkan organisasi di samping mendedahkan pelapor (whistleblower) kepada beberapa bentuk ancaman ugutan dari luar dan diskriminasi dalam organisasi. Kertas ini merupakan satu upaya untuk melihat perkaitan antara persepsi anggota Polis Diraja Malaysia (PDRM) Kontinjen Perak melalui peranan amalan whistleblowing terhadap persepsi peningkatan integriti anggota. Seterusnya, mengenalpasti maksud whistleblowing dan pengaruhnya terhadap tahap integriti anggota dalam organisasi. Kajian ini menggunakan analisis kuantitatif berbentuk deskriptif bagi mengenalpasti corak hubungan yang wujud antara persepsi terhadap amalan whistleblowing dengan persepsi terhadap peningkatan integriti berdasarkan tiga pembolehubah asas iaitu faktor demografi, tanggapan terhadap whistleblowing dan kesan daripada tindakan membuat laporan. Dapatan kajian menunjukkan bahawa anggota PDRM Perak mempunyai persepsi yang positif terhadap whistleblowing yang mana ianya dilihat perlu dilaksanakan dalam meningkatkan integriti anggota.Kata kunci: whistleblowing, persepsi, amalan, anggota PDRM, budaya, integriti, organisasi, pengaruh.  

THE EFFECT OF TRADE RECEIVABLES ON THE LIQUIDITY OF THE COMPANY PT. GRAHA TUMARIMA, CITY OF SUKABUMI

2020 ◽  
Author(s):  
endang naryono
Keyword(s):  
Correlation Analysis ◽  
Hypothesis Testing ◽  
Sampling Technique ◽  
Strong Relationship ◽  
T Test ◽  
Financial Statement ◽  
Positive Meaning ◽  
The Relationship ◽  
Purposive Sample ◽  
Analysis Determination

This study examines the influence of receivables on liquidity at PT. Graha Tumarima. Sukabumi City for 5 years, with a sampling technique using a purposive sample in the form of financial statement data from 2010 to 2014 using a table of trade receivables and company liquidity. In this study, researchers refer to the theory of Bambang Riyanto (2008: 94) as the connecting theory of the title. This study aims to determine whether there is a relationship and influence between receivables and liquidity at PT. Graha Tumarima. The research design uses the method of exposing the facto, the method of data collection aims to test the hypothesis by using correlation analysis, determination, regression and hypothesis testing with t-test. The results of this study show the influence of receivables on liquidity is shown by the value of r = 0.888, meaning that receivables have a very strong relationship to liquidity. The nature of the relationship is positive, meaning that if the value of cooperative credit is higher the liquidity will be higher. Conversely, if the value of receivables decreases, liquidity will decrease. The magnitude of the influence of receivables on liquidity is shown by the value of R Square / Determination Coefficient of 0.789 or 78.9% thus the receivables have an effect of 78.9% on cooperative liquidity. Hypothesis testing uses the t test, that t arithmetic = 3.347 while t table = 3.182 means t arithmetic&gt; t table. Means that Ho is rejected and Ha is accepted. There is an influence between the receivables on liquidity at PT. Graha Tumarima, Sukabumi City

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