An Analysis of the Determinants Influencing Internal Auditors’ Ability to Detect Fraud in Indonesian State-Owned Enterprises
Keywords:
Internal Audit Effectiveness, Fraud Detection Capability, State-Owned Enterprises
Abstract
This study examines persistent challenges in fraud detection within Indonesian State-Owned Enterprises (BUMN), despite the formal establishment of internal audit mechanisms. Motivated by recurring large-scale corruption cases that remained undetected over extended periods, the study aims to identify and empirically analyse the key determinants influencing internal auditors’ ability to detect and disclose fraud. A mixed-methods explanatory design was employed, integrating quantitative and qualitative approaches. Data were collected from 85 internal auditors through structured questionnaires, supported by in-depth interviews and Focus Group Discussions (FGDs) involving auditors from BUMN, the Financial and Development Supervisory Agency (BPKP), and the Inspectorate General. Quantitative data were analysed using multiple linear regression, while qualitative data were examined through thematic analysis and visualized using a mind mapping approach. The results reveal that six determinants auditor competence, independence and objectivity, management support, internal control systems, organizational culture, and audit technology have positive and significant effects on fraud detection capability, explaining 70.9% of the variance (R² = 0.709). Auditor competence and independence emerge as the most influential factors. This study proposes a determinant-based model of internal audit effectiveness and highlights the need for integrated reforms to strengthen audit capability and accountability within BUMN.
References
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Joseph F. Hair, William C. Black, Barry J. Babin, & Rolp E. Anderson. (2019). Multivariate_Data_Analysis (8th ed.). United Kingdom Cengage Learning EMEA.
Khamainy, A. H., Amalia, M. M., Cakranegara, P. A., & Indrawati, A. (2022). Financial Statement Fraud: The Predictive Relevance of Fraud Hexagon Theory. Journal of Accounting and Strategic Finance, 5(1). https://doi.org/10.33005/jasf.v5i1.249
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Lesmana, D., Susetyo, D., Ferina, I. S., Yusnaini, Y., & Syathiri, A. (2026). Enhancing Fraud Detection: Professional Skepticism and Whistleblowing in the Context of Hofstede’s Culture in Indonesia (pp. 68–84). https://doi.org/10.2991/978-94-6463-994-0_6
Martha, S. Y., & Tapatfeto, J. D. (2022). The Effect of Competence and Independence on Audit Quality with Auditor ’ s Ethics as a Moderating Variable. Nternational Conference on Applied Science and Technology on Social Science 2021 (ICAST-SS 2021), 647, 823–828. https://doi.org/10.2991/assehr.k.220301.135
Natsir, S., Arif, M. R., Arsyad, M., Amin, A. N., & Azzahrah, F. (2025). Strong Control Environment the Main Pillar of Internal Audit in State-Owned Enterprises. Jurnal Ilmiah Akuntansi Kesatuan, 13(5), 1175–1186. https://doi.org/10.37641/jiakes.v13i5.3790
Novatiani, R. A., Kusumah, R. W. R., Yadiati, W., Abdul Halim Rachmat, R., & Arifian Rachman, A. (2024). Internal auditor competence and internal control: Improving internal audit quality to prevent fraudulent financial statements. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2409339
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Rifai, M. H., & Mardijuwono, A. W. (2020). Relationship between auditor integrity and organizational commitment to fraud prevention. Asian Journal of Accounting Research, 5(2), 315–325. https://doi.org/10.1108/AJAR-02-2020-0011
Samagaio, A., & Diogo, T. A. (2022). Effect of Computer Assisted Audit Tools on Corporate Sustainability. Sustainability (Switzerland), 14(2). https://doi.org/10.3390/su14020705
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Teddlie, C., & Yu, F. (2007). Mixed Methods Sampling. Journal of Mixed Methods Research, 1(1), 77–100. https://doi.org/10.1177/1558689806292430
Usman, A. S., & Audu, P. (2021). Triangulation Approach to Research in Accounting and Finance. International Journal of Accounting Research, 6(2), 55–57. https://doi.org/10.12816/0061254
Utibe Monday, T. (2020). Impacts of Interview as Research Instrument of Data Collection in Social Sciences. Journal of Digital Art & Humanities, 1(1). https://doi.org/10.33847/2712-8148.1.1_2
Volodina, T., Grossi, G., & Vakulenko, V. (2022). The changing roles of internal auditors in the Ukrainian central government. Journal of Accounting and Organizational Change, 19(6). https://doi.org/10.1108/JAOC-04-2021-0057
Vousinas, G. L. (2019). Advancing theory of fraud: the S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381. https://doi.org/10.1108/JFC-12-2017-0128
Yusnaini, Y., Athiyyah, M., Hakiki, A., & Wahyudi, T. (2025). Work pressure and client internal control: Auditor personality in fraud detection. South African Journal of Economic and Management Sciences, 28(1). https://doi.org/10.4102/SAJEMS.v28i1.6395
Achmad, T., Ghozali, I., & Pamungkas, I. D. (2022). Hexagon Fraud: Detection of Fraudulent Financial Reporting in State-Owned Enterprises Indonesia. Economies, 10(1), 13. https://doi.org/10.3390/economies10010013
Adekola, G., & Olumati, E. S. (2023). Focus Group Discussion: A Research Method in Community Development. International Journal of Research and Innovation in Social Science, VII(V). https://doi.org/10.47772/ijriss.2023.70533
Almagrashi, A., Mujalli, A., Khan, T., & Attia, O. (2023). Factors determining internal auditors’ behavioral intention to use computer-assisted auditing techniques: an extension of the UTAUT model and an empirical study. Future Business Journal, 9(1). https://doi.org/10.1186/s43093-023-00231-2
Alwi Rahman Kusnandar. (2025, February 28). “Klasemen Liga Korupsi Indonesia” Ramai, Berikut Urutannya! Universitas Muhammadiyah Jakarta. https://umj.ac.id/just_info/klasemen-liga-korupsi-indonesia-ramai-berikut-urutannya/
Arena, M., & Azzone, G. (2009). Identifying Organizational Drivers of Internal Audit Effectiveness. International Journal of Auditing, 13(1), 43–60. https://doi.org/10.1111/j.1099-1123.2008.00392.x
Arif, M. R., Md. Kassim, A. A., Omsa, S., Triana, D., Annisa, A., & Danduru, A. F. (2025). Identifying governance contextual dimensions in Indonesia regional government-owned enterprises. Eastern-European Journal of Enterprise Technologies, 1(13 (133)), 78–88. https://doi.org/10.15587/1729-4061.2025.318560
Arsyad, M., & Natsir, S. (2024). The Role of Forensic Accounting in Improving Audit Quality BT - Proceedings of the International Conference on Applied Science and Technology on Social Science 2023 (iCAST-SS 2023). 903–908. https://doi.org/10.2991/978-2-38476-202-6_115
Bans-Akutey, A., & Tiimub, B. M. (2021). Triangulation in Research. Academia Letters. https://doi.org/10.20935/AL3392
Bekhet, A. K., & Zauszniewski, J. A. (2012). Methodological triangulation: an approach to understanding data. Nurse Researcher, 20(2), 40–43. https://doi.org/10.7748/nr2012.11.20.2.40.c9442
Bonrath, A., & Eulerich, M. (2024). Internal auditing’s role in preventing and detecting fraud: An empirical analysis. International Journal of Auditing. https://doi.org/10.1111/ijau.12342
Brink, A. G., Eller, C. K., & Green, K. Y. (2022). Fraud Reporting within an Organization and the Use of the Internal Audit Function as a Training Ground for Management. Behavioral Research in Accounting, 34(1), 1–22. https://doi.org/10.2308/BRIA-2020-015
Budi Yuniarso, Y., Bernanthos, B., & Author, C. (2025). State-Owned Enterprises as Agents of Development: Between Business Interests and Social Responsibility. Greenation International Journal of Economics and Accounting (GIJEA), 3(4), 538–541. https://doi.org/10.38035/gijea.v3i4
Eulerich, M., Eulerich, A., & Bonrath, A. (2025). Technology and internal auditing: An overview of performance effects. Maandblad Voor Accountancy En Bedrijfseconomie, 99(4), 181–193. https://doi.org/10.5117/mab.99.153598
Guerrero J. M., & Ramos, P. (2015). Mind Mapping for Reading and Understanding Scientific Literature. International Journal of Current Advanced Research, 4(11). https://doi.org/10.1002/da
Hotimah, R. N., & Kuntadi, C. (2024). Factors that affect Fraud Detection: Internal Auditor Independence and Whistleblowing System. Jurnal Stagflasi : Ekonomi, Manajemen Dan Akuntansi, 2(02), 153–161. https://seaninstitute.or.id/bersinar/index.php/Stagflasi/article/view/139
Hutchins, S., Wright, K., & Rambo-Hernandez, K. (2026). A Contingency Table-Based Method of Crossover Analysis in Convergent Mixed Methods Designs to Achieve Complementarity Between Ratings and Comments in Survey Research. Journal of Mixed Methods Research. https://doi.org/10.1177/15586898261435472
Ikhsan, W. M., Ednoer, E. H., Kridantika, W. S., & Firmansyah, A. (2022). FRAUD DETECTION AUTOMATION THROUGH DATA ANALYTICS AND ARTIFICIAL INTELLIGENCE. Riset, 4(2), 103–119. https://doi.org/10.37641/riset.v4i2.166
Joseph Elikem Kofi Ziorklui, Frederick Owusu Ampofo, Nicholas Nyonyoh, & Bernard Owusu Antwi. (2024). Effectiveness of internal controls mechanisms in preventing and detecting fraud. Finance & Accounting Research Journal, 6(7), 1259–1274. https://doi.org/10.51594/farj.v6i7.1322
Joseph F. Hair, William C. Black, Barry J. Babin, & Rolp E. Anderson. (2019). Multivariate_Data_Analysis (8th ed.). United Kingdom Cengage Learning EMEA.
Khamainy, A. H., Amalia, M. M., Cakranegara, P. A., & Indrawati, A. (2022). Financial Statement Fraud: The Predictive Relevance of Fraud Hexagon Theory. Journal of Accounting and Strategic Finance, 5(1). https://doi.org/10.33005/jasf.v5i1.249
Latan, H., Ringle, C. M., & Jabbour, C. J. C. (2018). Whistleblowing Intentions Among Public Accountants in Indonesia: Testing for the Moderation Effects. Journal of Business Ethics, 152(2), 573–588. https://doi.org/10.1007/s10551-016-3318-0
Lesmana, D., Susetyo, D., Ferina, I. S., Yusnaini, Y., & Syathiri, A. (2026). Enhancing Fraud Detection: Professional Skepticism and Whistleblowing in the Context of Hofstede’s Culture in Indonesia (pp. 68–84). https://doi.org/10.2991/978-94-6463-994-0_6
Martha, S. Y., & Tapatfeto, J. D. (2022). The Effect of Competence and Independence on Audit Quality with Auditor ’ s Ethics as a Moderating Variable. Nternational Conference on Applied Science and Technology on Social Science 2021 (ICAST-SS 2021), 647, 823–828. https://doi.org/10.2991/assehr.k.220301.135
Natsir, S., Arif, M. R., Arsyad, M., Amin, A. N., & Azzahrah, F. (2025). Strong Control Environment the Main Pillar of Internal Audit in State-Owned Enterprises. Jurnal Ilmiah Akuntansi Kesatuan, 13(5), 1175–1186. https://doi.org/10.37641/jiakes.v13i5.3790
Novatiani, R. A., Kusumah, R. W. R., Yadiati, W., Abdul Halim Rachmat, R., & Arifian Rachman, A. (2024). Internal auditor competence and internal control: Improving internal audit quality to prevent fraudulent financial statements. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2409339
Oyedotun, S. A., Oise, G. P., Akilo, B. E., Nwabuokei, O. C., Ejenarhome, P. O., Fole, M., & Onwuzo, C. J. (2025). The Role of Internal Audit in Fraud Detection and Prevention: A Multi-Contextual Review and Research Agenda. Journal of Science Research and Reviews, 2(2), 76–85. https://doi.org/10.70882/josrar.2025.v2i2.51
Rahmasari, A., & Setiawan, D. (2022). Maturity of Internal Control System, the Capability of Internal Auditors, and Performance Accountability in Local Governments. Jurnal Tata Kelola Dan Akuntabilitas Keuangan Negara. https://doi.org/10.28986/jtaken.v8i2.830
Rifai, M. H., & Mardijuwono, A. W. (2020). Relationship between auditor integrity and organizational commitment to fraud prevention. Asian Journal of Accounting Research, 5(2), 315–325. https://doi.org/10.1108/AJAR-02-2020-0011
Samagaio, A., & Diogo, T. A. (2022). Effect of Computer Assisted Audit Tools on Corporate Sustainability. Sustainability (Switzerland), 14(2). https://doi.org/10.3390/su14020705
Setiawan, S., Carolina, Y., Kristiani, A., & Maranatha, U. K. (2020). The Effect of Auditor’s Competence and Independence on Information System Audit Quality. Asia Pacific Fraud Journa, 5(2), 183–190. https://doi.org/10.21532/apfjournal.v5i2.155
Shidqi, F., & Firmansyah, A. (2024). Bagaimana Peran Aparat Pengawasan Intern Pemerintah Dalam Pengawasan Akuntabilitas Proyek Kerjasama Pemerintah Dan Badan Usaha? Jurnalku, 4(1). https://doi.org/10.54957/jurnalku.v4i1.722
Sugiyono. (2022). Metode Penelitian Kualitatif (Untuk penelitian yang bersifat: eksploratif, enterpretif, interaktif dan konstruktif). Metode Penelitian Kualitatif. opac.stainkepri.ac.id/index.php?p=show_detail&id=4604
Suryana, A. (2007). Tahap-Tahapan Penelitian Kualitatif. In Analisis Data Kualitatif (pp. 5–10). Universitas Pendidikan Indonesia. adoc.pub/tahap-tahapan-penelitian-kualitatif-mata-kuliah-analisis-data.html?utm_source
Syakirun Ni’am, D. A. R. (2025, March 2). Klasemen Liga Korupsi Indonesia dan Masalah Serius di BUMN. Kompas.Com. https://nasional.kompas.com/read/2025/03/02/09222401/klasemen-liga-korupsi-indonesia-dan-masalah-serius-di-bumn?page=all
Teddlie, C., & Yu, F. (2007). Mixed Methods Sampling. Journal of Mixed Methods Research, 1(1), 77–100. https://doi.org/10.1177/1558689806292430
Usman, A. S., & Audu, P. (2021). Triangulation Approach to Research in Accounting and Finance. International Journal of Accounting Research, 6(2), 55–57. https://doi.org/10.12816/0061254
Utibe Monday, T. (2020). Impacts of Interview as Research Instrument of Data Collection in Social Sciences. Journal of Digital Art & Humanities, 1(1). https://doi.org/10.33847/2712-8148.1.1_2
Volodina, T., Grossi, G., & Vakulenko, V. (2022). The changing roles of internal auditors in the Ukrainian central government. Journal of Accounting and Organizational Change, 19(6). https://doi.org/10.1108/JAOC-04-2021-0057
Vousinas, G. L. (2019). Advancing theory of fraud: the S.C.O.R.E. model. Journal of Financial Crime, 26(1), 372–381. https://doi.org/10.1108/JFC-12-2017-0128
Yusnaini, Y., Athiyyah, M., Hakiki, A., & Wahyudi, T. (2025). Work pressure and client internal control: Auditor personality in fraud detection. South African Journal of Economic and Management Sciences, 28(1). https://doi.org/10.4102/SAJEMS.v28i1.6395
Published
2026-06-07
How to Cite
Arsyad, M., Amiruddin, & Rahmawati HS. (2026). An Analysis of the Determinants Influencing Internal Auditors’ Ability to Detect Fraud in Indonesian State-Owned Enterprises. International Journal of Business and Quality Research, 4(02), 683-708. https://doi.org/10.63922/ijbqr.v4i02.3273
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