Financial intelligence: Financial statement fraud in Indonesia

Muhammad Ikbal, Irwansyah Irwansyah, Ardi Paminto, Yana Ulfah, Dio Caisar Darma


Indonesia is currently in an honesty crisis, especially in financial governance, both
in government and private institutions. Our study uses the concept of financial intelligence to
identify and collect information related to financial affairs in an organization. We use the
opinions of 76 auditors regarding various fraudulent attempts, both with fraudulent financial
statements and other corrupt practices in organizations in Indonesia. Our important finding is
that small companies are more likely to commit fraud due to weak supervisors than listed public
companies. This is also more likely than family-owned companies and government level
organizations. It was indicated by some respondents that local government level organizations
with weak supervision are more likely to commit fraud than local governments with close
supervision from urban communities. The results of the non-parametric relationship analysis
show that although there is a possibility that the more experienced the auditor is, the more able
they are to detect fraud and manipulation in the organization, the relationship is relatively
weak. Other findings also show that auditors who have a CFE certificate find it easier to find
fraud in the company.


Bribes, financial intelligence, fraudulent financial statements, procurement of goods and services

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