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Financial Statement Fraud Revisited, Learn From Auditor Negligence


Bambang Leo Handoko, Ang Swat Lin Lindawati, DezieLeonarda Warganegara
Abstract

Financial statements become a communication medium between company management with investors and creditors. It's just that in many cases, financial statements are manipulated, so the users of financial statements make the wrong decision, because it depends on the financial statements that are manipulated. The role of financial auditors should be an independent third party that detects when financial statement fraud occurs. However, in some cases of large-scale financial statement fraud, auditors failed to detect fraud due to lack of professionalism, even auditors involved in the case. This research is a descriptive qualitative research. The purpose of this study is to review fraud schemes committed by company management, then mistakes made by auditors, both negligence and fraud. After that, it provides recommendations on how the auditor should act accordingly. The data in this study are primary and secondary data. Primary data were obtained through focus group discussions with auditor practitioners in reviewing cases. The results of our study are that in some cases, auditors do lack independence, lack professional skepticism, do not complete a comprehensive audit, and inappropriate sample technique

Volume 12 | Issue 6

Pages: 2774-2781

DOI: 10.5373/JARDCS/V12I6/S20201238