Detection Accounting Fraud: Role Internal Auditor and Whistleblowing Data System in Study Literature

This research was conducted with the aim of finding out and analyzing the role and influence of the independence of internal auditors and whistleblowing data systems in detecting accounting fraud in private, public sector organizations or non-governmental organizations. This research is qualitative research with descriptive analysis methods based on literature studies with secondary data through scientific articles, news, books, previous research and the internet over the last five years, namely 2019-2023. The results of this research are that the independent attitude of internal auditors and the whistleblowing data system is very good and has a significant effect on detecting accounting fraud. Although there are several factors that influence the effectiveness of implementing an independence attitude and whistleblowing system, such as the control environment, relationships with clients, incentives for whistleblowers, and binding regulations and other related factors.


INTRODUCTION
Fraud is now one of the most worrying problems.Fraud always attracts media attention, and it is the most important and fundamental problem occurring at home and abroad (Yufeng Kou et al., 2004).According to Irwansyah & Syufriadi (2019),An organization, especially its scope of work, can be greatly affected by fraud.Fraud is defined by the Association of Certified Fraud Exminers as an act of fraud or error committed by a person or organization who is aware that his or her actions may result in unfavorable benefits for the individual or organization or another party (Indella & Husaini, 2021).Weak internal controls can lead to fraud which has fatal consequences for the organization (Prasetiyo et al., 2023).
Every practical mode of cheating in the form of finance and accounting will result in significant losses to organizational, group and state funds for the personal gain of the perpetrators (Melinda et al., 2022).Corruption, misuse of assets, and manipulation of financial statements are some forms of fraud.The results of a survey conducted by ACFE (Association of Certified Fraud Examiners) in 2019 show that corruption cases are the most common type of fraud in Indonesia (Situngkir & Triyanto, 2020).The percentage was 64.4%, followed by misuse of assets, or misuse of assets, both state and company owned, at 28.9%, and manipulation of fraudulent financial reports at 6% (Arianto et al., 2022).One of the various sources of corruption is accounting fraud.Corruption is the misuse of state money (companies, organizations, foundations, etc.) for personal or other people's interests.This fraud causes the organization's reputation to be damaged, the organization loses money, the country loses money, employee morale is lost, and other negative effects (Adelya Putri Kesuma & Fachruzzaman, 2023).
Accounting enforcers and auditors prioritize regulatory compliance over fraud prevention and detection; however, in the course of their oversight responsibilities, they must pay close attention to fraud risks and warning signals (Brasel et al., 2019).In cases where misstatements are likely to be caused by intentional actions by management, audit standards recommend a different audit response (e.g., Auditing Standard No. 14, PCAOB, 2010a).Additionally, an auditor's unaltered opinion on an annual report that is later found to be materially misstated is a type of audit error that investors can no longer tolerate.This is especially true in cases of fraudulent accounting (Kassem, 2023).If enforcement and oversight of financial reporting is inadequate, it can slow down fraud detection, reducing investor confidence in capital markets and their supervisory function.Conversely, good auditor supervision and law enforcement can reduce the incentives and possibility of accounting fraud.This impacts an important component of the fraud triangle model, which describes the environment that supports fraud (Campa et al., 2023).
Even though there are laws that limit these fraudulent acts, fraud still occurs and is on the rise (Meitasir et al., 2022).Of the 180 countries with the highest levels of corruption, Indonesia is ranked 96th according to the Corruption Perception Index (IPK).With quite a history of fraud cases, this ranking is quite embarrassing.Several cases of fraud that are publicly known mostly originate from state-owned companies and state government institutions, such as PT Garuda Indonesia, PT Asuransi Jiwasraya, PT Angkasa Pura II, PT Waskita Karya, PT Krakatau Steel, and PT Mahata Aero Teknologi, among others.(Reskia & Sofie, 2022).The Enron case in 2001, which was related to manipulated financial reports at the same time as KAP Arthur Andersen, was one of the biggest cases ever widely discussed and caused the KAP to be closed.Apart from that, Garuda Indonesia suffered state losses of IDR 8.8 trillion due to misuse of financial reports related to aircraft procurement (Aprillia & Sulfitri, 2023).
An organization's internal controls can maintain wealth and smoothness and prevent fraud.A survey conducted by the Indonesian Association of Certified Fraud Examiners (ACFE) in 2016 found that corruption was the most common type of fraud in Indonesia (Association of Indonesian Certified Fraud Examiners Section, 2016).The results of the 2014 ACFE survey also show that financial institutions such as banks have the highest fraud rates (Yulian Maulida & Indah Bayunitri, 2021).According to Anti-Fraud Control published by ACFE in 2016, the Whistleblowing System is the most effective fraud prevention method.Prevention and early detection efforts are needed because various fraudulent practices are increasingly widespread in the public and business sectors.However, strategic actions to reduce fraudulent practices must follow developments in the current era.In this case, implementing a whistleblowing channel is a strategy that can be used to prevent fraudulent practices in the first place.This is due to the fact that this scheme can be used to collect various accurate evidence regarding fraudulent practices (Mamahit & Urumsah, 2018).Therefore, notifications have a significant effect on efforts to prevent fraud (Riyanto & Arifin, 2022).Whistleblowing can also detect various types of fraud in the public sector (Basri, 2022).
Whistleblowing channels must adapt to advances in information technology, especially social media.Social media continues to play an important role in all aspects of people's lives, especially in recent decades (Arianto, 2021).In the current era of computers and the internet, sometimes there are people who upload reports or complaints on social media, which are then followed up by other people who make reports (Widhiyanti & Bernawati, 2020).In short, whistleblowing channels can be combined with advances in information technology.With many whistleblowing reporting methods, the accountability process will become stronger and the possibility of fraudulent practices will be lower.In addition, the ethical orientation of relativism, professional identity, and anticipatory socialization are some of the many variables that influence a person's desire to become a whistleblower (Annisaa & Nurlaeli, 2022).
This article was written with a focus on elaborating and comparing the role of whistleblowing and internal auditor independence as a platform for detecting accounting fraud.The effectiveness of the complaint system and the role of internal auditor independence in company management greatly influence the ability to detect fraud quickly and precisely.The more effective the whistleblowing system, the more effective fraud detection will be.On the other hand, the whistleblowing system can function well when the whistleblower also participates in complaints about fraud cases.So, if research results differ on how whistleblowing systems affect fraud detection, it may be because of how the systems work in different organizations.So it can be concluded that, if whistleblowing systems can be used effectively as a tool for reporting fraudulent practices, their influence on fraud detection is quite large.So this research was carried out with the aim of seeing how existing research, studies that have been made prove that whistleblowing and the role of internal auditors in collaborating to detect and prevent fraud.

LITERATURE REVIEW Theory Planed Behavior
According to the Theory of Planned Behavior, the point of view of humans as social creatures who have rational thinking, have a tendency to consider the impact of every action they take on what will happen to them in the future.(Basri, 2022).This theory explains that thinking about the impact of every action they take on what will happen to them in the future shapes every human action.
According to Rahman (2020), This theory is related to the human desire to carry out whistleblowing because when they do so, there will be impacts that can threaten individuals and those closest to them if the system does not work well and the confidentiality of the whistleblower cannot be guaranteed.Apart from that, this theory can also be related to the role of an internal auditor in maintaining an independent attitude in the work environment.The existence of organizational lines and the fact that internal auditors are part of the organization can enable some parties to pressure them to carry out their duties by offering promises about positions, jobs, or other things, which can provide personal benefits (Prasetiyo et al., 2023).

Fraud Accounting
Accounting fraud, also known as fraud, is any form of illegal action that is intentionally carried out in violation of applicable laws and regulations, resulting in losses for the victim and profits for the perpetrator.Perpetrators, both individuals and groups, commit this fraud solely for their personal interests and profits, which are influenced by various factors (Basri, 2022).Fraud can be defined as a general term that includes all the ways in which a person tries to force human intelligence to create various means that can be used to gain an advantage over another individual or group by using false and unfair representation.(Marfiana & Gunarto, 2021).

Internal Auditor
According to the Institute of Internal Auditors (IIA) (2017), internal control is the unit or organization that is responsible for all actions taken by management, the board and other parties to improve risk management and achieve predetermined goals and objectives.To ensure that goals and objectives are achieved, management plans, organizes and directs adequate performance (Adelya Putri Kesuma & Fachruzzaman, 2023).The Committee of Sponsoring Organizations of The Treadway Commission on Internal Control (COSO) defines internal auditing as a procedure intended to give reasonable assurance about the accomplishment of goals pertaining to operations, reporting, and compliance.It is influenced by the board of directors, management, and other staff members of an entity.Five components of policies and procedures created and implemented to guarantee that management control objectives will be met were also introduced by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission.The five components that make up internal control are information and communication systems, management risk assessment, control activities, monitoring, and the control environment.(Pratiwi et al., 2021).

Whistleblowing Data System
A violation reporting system, also known as a "wishtleblowing system", is a collection of rules, regulations, procedures, facilities and infrastructure used and provided by an organization to ensure that information submitted by staff can be processed accountably and transparently with the aim of early detection and handling fraud incidents.According to the Financial and Development Audit Agency (BPKP), internal control includes reporting system violations.Effective internal controls can detect signs of fraudulent practices (Coram et al., 2008;Protiviti, 2009).Because awareness of the importance of implementing a violation reporting system policy in companies and government organizations continues to increase, a violation reporting system policy is still only being implemented in Indonesia.Therefore, the whistleblowing system is part of the internal control system which has an impact on fraud prevention.
Whistleblowing systems are usually applied to companies or other organizations to track certain violations committed by employees or former employees.These violations can result in losses for other parties if they violate applicable laws, norms or regulations.This reporting system is designed to control the company against possible fraud committed by various parties within the company (Rahmi et al., 2024).Thus, this whistleblowing system allows anyone involved in the company to report the fraud.A reporter in this whistleblowing system is usually referred to as a whistleblower, and he must maintain the confidentiality of his identity.Whistleblowers are very important for running a whistleblowing system and finding fraudulent behavior that occurs in companies.The whistleblowing system is very important because it can function as a way to reveal unlawful actions, unethical actions and other actions that are detrimental to the company.However, the success of a whistleblowing system depends on how company management implements this policy and protects the rights and identity of whistleblowers.Whistleblowers are the main supporters of implementing this policy (Kartim, 2022).Apart from that, a whistleblower must adhere to the Theory of Planned Behavior before reporting cases of violations to the whistleblowing system.Therefore, the guarantee of the safety of the reporter must be upheld so that this policy can be implemented properly.
Whistleblowing is categorized into internal and external because of several elements that form it, namely action, outcome, actor, subject and target.Internal whistleblowing occurs when an employee finds out about various types of fraud committed by an employee and then reports it to his superior (Arianto & Tinggi, 2022).This system is built through company and organizational procedures.However, external whistleblowing occurs when an employee finds out about the company's fraudulent practices and then leaks it to the public.Concerned that this action could harm the public at large.However, external reporting still requires an organization outside the company that has the authority to receive whistleblower reports (Okafor et al., 2020).

METHODOLOGY
This research is qualitative research using descriptive analysis methods and empirical observations of situational conditions.The aim of this research is to collect, analyze and display current data, which data consists of previous research, books, papers, scientific studies and sources from big data such as the internet which are related to the research topic of this research.The data collected by the author of this research was obtained through documentation and literature studies as well as journal articles written by previous researchers on topics and problems similar to the topic of this research.Specifically, in the field of accounting fraud, whistleblowing systems and the role of internal auditors as internal controllers of an organization in carrying out their duties as parties who measure and assess an organization's business units.

Fraud Practices and Occurrence
Currently, fraud or accounting fraud has become commonplace and commonly occurs in various organizations, both in the private sector, public sector and government institutions.Various factors influence these fraudulent practices, and there are different types of fraud.The increasing number of fraud crimes shows how important basic human ethics are to live a social life that respects the basic rights of other people and honesty in every aspect of life.Donald R. Cressey developed the fraud triangle theory, which states that three factors encourage fraud: 1) Opportunity (or opportunity), 2) Pressure (or pressure), and 3) Rationalization (or rationalization).According to Cressey, if one of these three factors is not met, it is very likely that fraud will not occur.However, according to Crowe Howarth proposed a theory that by considering five supporting factors, fraud can occur.This theory is known as the fraud pentagon, and includes two additional factors: ability or capability (competence) and arrogance (arrogance).For example, when there is an opportunity to commit fraud that is visible to the eye with the possibility of a large reward that he will get for doing it, a person will be increasingly motivated to do it.Apart from that, there are other external factors that at the same time pressure the perpetrator to get something bigger.Fulfillment of pressure usually causes a person to feel rational about committing fraud because he feels that the action he is taking is tolerable and not too negative.However, in reality, this rationalization only arises in the individual committing the fraud themselves when the situation can be considered to "justify" the behavior.Furthermore, this theory divides several types of fraud into several groups: 1) Fraudulent Financial Statements consist of fraudulent financial statements and other reports (non-financial statements).2) Asset Misappropriation consists of cash fraud and inventory and other assets fraud.
However, financial statement fraud often occurs in the business sector.Historically, accounting companies such as Enron, which is a combination of InterNorth, a provider of natural gas via pipeline, and Houston Natural Gas, have been known to engage in moral hazard behavior, namely manipulating financial reports by recording profits of US$600 million when in fact the company experienced large losses.However, the public finally found out about this fraud.However, General Electric Company, a multinational technology and services company in the United States which is suspected of manipulating, also experienced the same case.Apart from that, there was fraud in the financial reports in the case of PT Hanson International Tbk.This case is linked to the scandal of two state-owned insurance companies, PT Asuransi Jiwasraya (Persero) and PT Asabri (Persero).As a result, both Jiwasraya and Asabri have placed quite large amounts of their customers' funds in PT Hanson International Tbk.In addition, investments and placements through shares have resulted in significant losses for PT Hanson International Tbk which was proven to have committed fraud in its annual financial report in 2012, based on data from the Financial Services Authority (OJK).

The Role and Function of Internal Auditors for Detecting Accounting Fraud
The ethics that an internal auditor must follow when carrying out his duties as an auditor are that he must take an independent attitude so that the results of his audit of the company's financial statements and other activities can be trusted.An auditor must be honest and free from client influence to make their decisions, suggestions and opinions accurate.This is known as an independent perspective of internal auditors' attitudes and behavior.
Seeing the importance of an independent internal auditor's attitude, many previous studies have been carried out by Dharmawati et.al, (2022), with the title The Mediating Effect of Fraud Prevention on the Relationship of Internal Control, Risk Management and Organizational Performance with the results that internal control and risk management have a positive and significant impact on fraud prevention, fraud prevention has a positive and significant impact on organizational performance, and internal control and Risk management has a positive and significant impact on organizational performance through fraud prevention.Then research conducted by Anggraeni et al., (2021),with the title The Influence of Whistleblowing Systems, Internal Control Systems, Organizational Culture, and Organizational Justice in Fraud Prevention with the results that the violation reporting system, internal control system, organizational culture, and organizational justice have a positive and significant influence on fraud prevention.Then research is carried out Puryati & Febriani (2020), with the title Consequences of the Whistleblowing System and Internal Control on Fraud Prevention: A Study of the Indonesian State in State-Owned Enterprises with the results of the whistleblowing system which has a significant impact on fraud prevention.Then research is carried out Adawiyah et al., (2023) with the title The Influence of Internal Control, System Violation Reporting, and Internal Audit on Fraud Prevention.With the results of the analysis, the literature review that has been carried out means that it can be concluded that the Internal Control, Fraud Reporting System, and Internal Audit that have been carried out by auditors in preventing fraud have This is done well enough to minimize possible fraud Based on previous research, because the auditor's independent attitude supports an objective audit process, so that the audit evidence collected becomes more accurate by referring to the facts that occurred on top of the existing evidence without considering the subjective opinions of certain parties, the sample in previous research shows this attitude.Internal auditor independence largely has a positive influence on the auditor's ability to detect accounting fraud committed by either outside or within the company.Thus, independence also has a significant influence on auditors in detecting fraud while carrying out their duties as internal auditors.If the auditor does not do this, audit evidence that points to fraud will be ignored because there is pressure from other parties to cover up the fraudulent actions of company individuals.

The Role and Function of the Whistleblowing Data System for Detecting Accounting Fraud
Many cases of violations or fraud occur in internal companies, both in the private and government business sectors, and these cases are most often disclosed by internal employees.Therefore, internal employee complaints must be very important to uncover violations or fraud.Based on this, there is a system built to anonymously report suspected complaints about cases of fraud that have occurred in the organization, with evidence supporting the allegation, so that further investigation can be carried out regarding the veracity of the allegation.Whistleblowing System is its name.The Whistleblowing System is designed to help whistleblowers report suspected fraud cases anonymously to the management that manages them.A management system that is responsible for managing the rights of whistleblowers greatly influences the success of this whistleblowing system.The management system allows whistleblowers to report cases voluntarily without worrying about their careers at the next company.According to Transparency International Indonesia records, between 2004 and 2017, there were around 100 cases of threats against whistleblowers who revealed cases of corruption and violations.These threats include physical, psychological, legal threats and career obstacles.Therefore, organizations must have a good system and maintain whistleblower confidentiality so that whistleblowers are willing to report cases that have existed and occurred.Apart from maintaining identity confidentiality, providing incentives can encourage whistleblowers to report cases of fraud to the whistleblowing system.This incentive can encourage people to be more concern and brave enough to report fraud that occurs around them, and fraud detection can also be improved (Arianto, 2021).Countries around the world have policies that support whistleblowers, considering the important role they play in running this whistleblowing system.
According to news reported by Kompas.combroadcast in 2018, Indonesian President Joko Widodo issued Rule Number 43 in 2018 to provide incentives or rewards to those who report acts of corruption in their environment.The aim of this regulation is to encourage the public to be bolder in helping to uphold a country free from corruption and fraud.Whistleblowers in fraud cases are given bold incentives, namely up to 2 per mil of the amount of state financial losses that have been returned, and up to 10 million for bribery or auction cases.In other countries, people even dare to pay higher prices to fraud whistleblowers; for example, Malaysia dared to pay 400 thousand ringgit, or around 1.3 billion rupiah, to fraud reporters.
Several previous research researchers found similar topics to be used as references in this article, showing that several whistleblowing systems influence the ability to detect fraud, so the role of whistleblowers is very important and contributes to the success of an organization's whistleblowing system.Research conducted by (Puryati & Febriani, 2020) The whistleblowing system has a significant effect on preventing fraud.Then research conducted by Arianto et al., (2022), who found that the whistleblowing channel was created to detect and prevent fraud early in the public and private sectors.However, whistleblowing still requires the role of the whistleblower and an anonymous reporting plan to guarantee that whistleblowers will receive various forms of fraud.In elaborating on the research topic, this article uses a literature study approach.As shown in this article, whistleblowing channels are very effective for detecting and preventing various types of fraud that occur in all public and business sectors.Then research conducted by Hamilah et al., (2022), Internal control systems and internal auditors are very important to prevent fraud, independent commissioners and whistleblower protection are very important to prevent fraud, and whistleblowing systems are very important to prevent fraud and cheating in accounting.
The effectiveness of the complaint system in company management determines the influence of the complaint system on the ability to detect fraud.The more effective the whistleblowing system, the better the efforts to find fraud.On the other hand, the whistleblowing system can work well when the whistleblower also participates in complaints about fraud cases.So, if research results differ on how whistleblowing systems affect fraud detection, it may be because of how the systems work in each organization.Thus, it can be concluded that whistleblowing systems have a significant impact on fraud detection if they can be used properly as a tool to report fraudulent practices.

CONCLUSION AND RECOMENDATION
Fraud or deception occurs everywhere, especially in companies or organizations based on a profit or profit orientation.There are three main components responsible for this accounting crime or fraud: opportunity (or chance), pressure (or pressure), and rationalization.If these three main components are met, someone will commit fraud.It is unavoidable that fraud or accounting fraud has spread in almost all lines of business, including government, state-owned companies, non-governmental organizations and profit-based companies.Several factors, such as an organization's internal controls, ongoing relationships with clients, incentives for whistleblowers, and whistleblower protection regulations, influence how effective independence and the whistleblowing system are in detecting fraud.Most research shows that this independent attitude and whistleblower system is very helpful in detecting fraud.Thus, the higher the attitude of independence, the greater the ability to detect fraud, and the more effective the use of the whistleblower system, the greater the possibility of success in detecting fraud.
This research still has many shortcomings, therefore improvements for further research are needed.This research still uses literature study techniques which only document and study based on previous research, study of scientific articles, books, news and the internet as source media for analyzing topics in this research.For further research, it is hoped that quantitative research will be presented in the form of numbers so that it can be seen graphically and visualize the role of internal auditors and the whistleblowing system in early detection of accounting fraud.

FURTHER STUDY
For further research you can also use external references or events on similar research topics.that occurred outside Indonesia as a comparison and diversity of research results.