Factors That Influence The External Auditor's Assessment Of The Risk Of Fraud: An Auditor’s Perception

  • hadi mahmudah universitas islam 45
  • Noviriliza Nadia Putri Universitas Islam 45
  • Neneng Lasmita Universitas Islam 45
Abstract views: 213 , PDF downloads: 231



Financial reporting fraud has become a concern for the accounting profession in Indonesia. The accounting profession specifically issued Audit Standards Section 316 in response to the emergence of fraudulent financial reporting. One of the rules of the standard is the discussion of fraud risk assessment.

This study aims to examine the effect of professional skepticism, independence, client narcissism, and time pressure on the risk assessment of fraud. This study uses primary data by distributing questionnaires to auditors who work in the DKI Jakarta area. The total respondents of this study were 120 auditors. The method of analysis used to test the hypothesis is multiple regression using SPSS version 22 software.

The results of this study indicate that professional skepticism has a positive and significant effect on the risk assessment of fraud, independence has a positive and significant effect on the risk assessment of fraud, client narcissism has a positive and insignificant effect on the risk assessment of fraud, and time pressure has a negative and insignificant effect on the risk assessment of fraud.

Keywords: professional skepticism, independence, client narcissism, time pressure, the auditor's fraud risk assessment.


Download data is not yet available.


Agusti, Restu, and Nastia Putri Pertiwi. 2013. "The Influence of Competence, Independence and Professionalism on Audit Quality (Empirical Study in Public Accounting Firms in Sumatra)". Journal of Economics Volume 21, Number 3 September 2013.

Anggriawan, Eko Ferry. 2014. "The Effect of Work Experience, Professional Skepticism and Time Pressure on the Auditor's Ability to Detect Fraud (Empirical Study at a Public Accounting Firm in DIY)". Journal Nominal / Volume Iii Number 2/2014.

Arens, Alvin A., Randal J. Elder, Mark S. Beasley, and Chris E. Hogan. 2014. "Auditing and Assurance Services: An Integrated Approach, 15th Edition". Pearson Education Inc. Upper Saddle River, New Jersey.

Budiani, Rizka Julia. 2011. "Narcissism in Financial Reporting: Semiotic Analysis of Financial Statements of Losing Companies".

Budiartha, I Ketut. 2016. "Time Pressure as a Moderator The Effect of Premature Termination of Audit Procedures on Auditor Performance." E-Journal of Accounting at Udayana University Vol. 17.1. October (2016): 743-770

Campbell, W. Keith, Adam S. Goodie and Joshua D. Foster. 2004 "Narcissism, Confidence, and Risk Attitude". Journal of Behavioral Decision Making, 17: 297–311.

Chatterjee, Arijit and Donald C. Hambrick. 2007. "It's All about Me: Narcissistic Chief Executive Officers and Their Effects on Company Strategy and Performance".

Endraningtyas, Rizki and Herlina Rahmawati Dewi. 2017. "Factors - Factors that affect the external auditor's assessment of the risk of fraud". Journal of Accounting and Business 17 (2): 120-131.

Ely Suhayati and Siti Kurnia Rahayu. 2010. "Auditing, Basic Concepts and Guidelines for Public Accountant Examination". Yogyakarta: Graha Science.

EY. 2013. "13th Global Fraud Survey".

Fatimah, Isti and Rudy Suryanto 2016. "The Influence of Auditor Experience, Independence, Time Pressure, and Auditor Professional Skepticism on Auditor's Ability to Detect Fraud". Muhammadiyah University of Yogyakarta, Faculty of Economics and Business

Fransiska, Inneke Puspita and Dewi Fatmawati, S.E., M.Ec. 2015. "The Effect of Personal Skepticism and Situational Skepticism (Client-Specific Experiences) on Audit Decisions." Gadjah Mada University, Faculty of Economics and Business, Yogyakarta.

Hall, James. A. 2008. "Accounting Information System". Salemba Empat: Jakarta.

Gullkvist, Benita and Annukka Jokipii. 2013. "Perceived Importance of Red Flags Across Fraud Types". Critical Perspectives on Accounting, Volume 24, pp. 44-61.

Hammersley, Jacqueline S., 2011. "A Review and Model of Auditor Judgments in Fraud-Related Planning Tasks". Auditing: A Journal of Practice & Theory, 30 (4), pp. 101-128.

Idawati, Wiwi and Roswita Eveline. 2016. "The Influence of Auditor Independence, Competence, and Professionalism Against Consideration of Materiality Level in Financial Statement Examination". Journal of Accounting / Volume Xx, No. 01, January 2016: 16-32

Indonesian Institute of Public Accountants. 2011. "Professional Standards for Public Accountants". Jakarta: Four Salemba.

Johnson, Eric N, John R. Kuhn Jr, Barbara A Apostolou and John M Hassell, 2013. “Auditors Perceptions of Client Narcissism As a Fraud Attitude Risk Factor”. A Journal of Practice & Theory, 32 (1), pp. 203-219.

Korompis, Claudia Wanda Melati and Lady Diana Latjandu. 2017. "The Influence of Client Narcissism, Audit Fees, Independence, Professional Skeptism, and External Auditor Interlock on Audit Judgment in Detecting Fraud Financial Statements (Case Study on Kap in Manado). Going Concern Accounting Research Journal

Maulina, Anggraini and Anwar. 2010. "The Effect of Time Pressure and Supervision Measures on Premature Termination of Audit Procedures". Proceedings of the XIII National Symposium on Accounting, 1-24. Purwokerto.

Mayangsari, Sekar. 2003. "The Effect of Expertise and Independence on Audit Opinion". Indonesian Journal of Accounting Research Vol. 6 No.1 (January).

Morf, Carolyn C and Frederick Rhodewalt. 2001. "Unraveling the Paradoxes of Narcissism: A Dynamic Self-Regulatory Processing Model". Psychological Inquiry 2001, Vol. 12, No. 4, 177–19

Noviyanti, Suzy. 2008. "Professional Skeptics of Auditors in Detecting Fraud". Indonesian Journal of Accounting and Finance 5 (1): 102-125.

Paulhus, Delroy L and Kevin M. Williams. 2002 '"The Dark Triad of personality: Narcissism, Machiavellianism, and psychopathy". Journal of Research in Personality 36 (2002) 556–563

Pangestika, Widya, Taufeni Taufik, and Alfiati Silfi. 2014. "The Influence of Professional Expertise, Independence, and Time Budget Pressure on Fraud Detection (Empirical Study at the Representative Audit Agency of Riau Province)". JOM FEKON Journal Vol. 1 No. October 2, 2014.

Prasetyo, Sandi. 2015. "The Influence of Red Flags, Auditor's Professional Skepticism, Competence, Independence, and Professionalism on Auditor's Ability to Detect Fraud (Empirical Study of Public Accounting Firms in Pekan Baru, Padang, and Medan which are Listed in IAPI 2013)". JOM FEKON Journal 2 (1): 1–15.

Education Center d an Oversight Training for Development Finance Supervisory Agency (Pusdiklatwas BPKP). 2008. "Fraud auditing Issue 2". BPKP.

Rahmawati, Dewi 2016. "The Influence of Professional Skepticism, Integrity, Workload and Client's Perceptions of Narcissism Against Fraud Risk Assessment."

Rapina, Lili Marlen Saragi, and Verani Carolina. 2010. "The Influence of External Auditor Independence on the Quality of Audit Implementation (Case Studies in Several Public Accounting Firms in Bandung)". Accurate Scientific Journal of Accounting No.2 Year 1 May-August 2010.

Sanjaya, Aviani. 2017. "The Influence of Professional Skepticism, Independence, Competence, Auditor Training, and Audit Risk on the Auditor's Responsibility in Detecting Fraud". Journal of Business Accounting.

Schilit, Howard Mark and Jeremy Perler. 2010 “Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, 3rd Edition”.

Solomon, Ira. Clifton Brown. 2005. “Auditors' Judgments and Decisions Under Time Pressure: An Illustration and Agenda for Research1”.

Siregar, Sylvia Veronica and Bayu Tenoyo. 2015. "Fraud awareness survey of private sector in Indonesia". Journal of Financial Crime, Vol. 22 Issue: 3, pp. 329-346.

Suryanto, Rudy, Yosita Indriyani, Hafiez Sofyani. 2017. "Determining the Auditor's Ability to Detect Fraud" Journal of Accounting and Investment, Vol. 18 No. 1, Pages: 102-118, January 2017

Syah Putra. 2012. "The Influence of Auditor Competence, Professional Skepticism. Experience, Audit Expertise, Gender and Independence of the Auditor's Opinion Decision (Thesis) ”. Islamic University of Indonesia, Faculty of Economics, Yogyakarta.

Widjaja, Amen. (2012). "Forensic & Investigative Accounting: A Case Approach". Harvarindo: Jakarta.

Winardi, Djatu Rijadh and Yoga Permana. 2015. "The Influence of Client's Professional Skepticism and Narcissism on the External Auditor's Assessment of the Risk of Fraud". Paper Presented at the XVIII National Accounting Symposium.

Vona, Leonard W. 2008. "Fraud Risk Assessment: Building a Fraud Audit Program". New Jersey: John Wiley & Sons, Inc.