PERCEPTION OF GOVERNMENT AUDITORS ON RED FLAGS ...seabc.unsri.ac.id/seabc2017/2017/92.pdf · person is guilty or innocent but rather a warning sign of fraud. Red Flags contained in

Proceeding 3rd Sriwijaya Economics, Accounting, and Business Conference 2017

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PERCEPTION OF GOVERNMENT AUDITORS ON RED

FLAGS EFFECTIVENESS IN DETECTING FRAUD ON

PROCUREMENT OF GOVERMENT GOODS AND SERVICES

Nayang Helmayunita, SE, M.Sc

Universitas Negeri Padang

[email protected]

Taufiq Akbar

Kementerian Hukum dan HAM

[email protected]

Abstract

This study aims to examine differences in perceptions between government

external auditors and government internal auditors about the effectiveness of red

flags in detecting fraud on procurement of government goods and services, and

get the most effective red flags by external and internal government auditors in

detecting fraud on procurement of goods and services government. This study

contributes to the accounting literature with a comprehensive perception of the

auditor on the effectiveness of red flags in detecting fraud in the government

sector is still very limited, especially in the procurement activities of goods and

services.

The research design is quantitative research with sampling technique using

purposive sampling method. Respondents in this study are BPK auditors as

external auditors, and BPKP auditors as internal auditors. Data collection

techniques by distributing questionnaires. Data analysis techniques using t-test to

test the first hypothesis, and analysis of variance to test the second hypothesis.

The results of this study indicate that there are different perceptions between

internal and external auditors on the effectiveness of red flags in the procurement

of goods and services, this study does not provide evidence that the auditor's

experience has a significant effect on the auditor's perception on the effectiveness

of red flags, this study illustrates that the first most perceived effective indicator

to detect fraud in government procurement of goods and services according to

government auditors is the volume of goods or construction is not the same or not

in accordance with the requested in technical specifications.

Keywords: Red Flags, Internal Auditor, External Auditor, Fraud.


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INTRODUCTION

One of the most frequent sectors of corruption in government is the procurement

of goods and services. The occurrence of fraud in the process of procurement of

goods and services government is a result of the inappropriate procurement

process with the applicable legislation. The government has actually made rules

related to the process of procurement of goods / services. Presidential Regulation

No. 54/2010 concerning Procurement of Government Goods / Services as lastly

amended by Peraturan Presiden No. 4/1955 is the prevailing laws and regulations

as a guideline in the implementation of government procurement of goods /

services for officials and or committees of goods and services procurement.

Despite the existence of legislation, but there are still many violations or fraud in

the procurement process of goods and services. This is evident from the

corruption-based corruption case data by the Corruption Eradication Commission

(KPK) as of July 2015 that corruption cases of goods and services procurement

are ranked the 2nd most handled by the KPK.

One of the foremost elements to detect the presence or absence of fraud on the

procurement of goods and services in government is the government auditor.

According to Guy (2002), government auditors are auditors working in various

government agencies, both central and local governments. Government auditors in

Indonesia basically work on the following three agencies: the Supreme Audit

Agency (BPK), the Financial and Development Supervisory Board (BPKP) and

the Inspectorate at the Ministry or in the Local Government. BPK can be regarded

as an external auditor because the position of BPK in accordance with the 1945

Constitution is not under the Head of Government (President). Meanwhile, the

Financial and Development Supervisory Board (BPKP) and Inspekstorat at the

ministries / agencies or at the local government is an agency responsible to

supervise and inspect internal government activities as regulated in Peraturan

Pemerintah No. 60 Tahun 2008 regarding Government Control System. So it can

be said that BPKP and Inspectorate is an internal government auditor (auditor).

In the Statement of Auditing Standard (SAS) no. 99 which has been adopted into

the Standards of Professional Public Accountants (SPAP) on the consideration of

fraud in the audit of financial statements set forth in the Statement of Audit

Standards (PSA) no. 70, has identified several risk factors that can be used by the

auditor in performing the audit of financial statements. Risk factors are also

termed Red Flags. According to DiNapoli (2008) Red flags are an unusual or

different circumstance with normal circumstances. Red flags do not indicate that a

person is guilty or innocent but rather a warning sign of fraud.

Red Flags contained in audit standards will certainly help the auditor to detect a

fraud. However, in the audit standard it is not stated which red flags are most


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effective at detecting fraud, thus allowing for differences in perceptions among

auditors in assessing the effectiveness of red flags in detecting fraud.

Several studies have been conducted to see the auditor's perceptions of the

effectiveness of red flags in detecting fraud. Majid et al. (2001) concluded that the

indicator of misstatements in previous audits and related issues of concern

concerning going concern is the most significant red flags in detecting fraud.

Moyes (2007) conducted a study to see if there were any differences between

external and internal auditors' perceptions of the effectiveness of red flags

contained in the Statement of Auditing Standard (SAS) no. 99, and it was

concluded that overall there was no difference in perceptions regarding the

effectiveness of red flags between external and internal auditors. Utomo (2014)

conducted a study to examine the perceptions of government external auditors on

the effectiveness of red flags in detecting fraud on procurement of goods /

services, and found that fictitious work; volume and quality of goods / services

not according to technical specifications; and price inflation in HPS are red flags

that are perceived to be most effective in detecting fraud on procurement of goods

/ services.

The studies that aim to see which red flags are most effective according to the

auditors in detecting fraud have been largely done in the business or private sector

using the red flags contained in audit standards as described previously. However,

such research is still not widely conducted in the public sector, especially in

government. Under these conditions it is felt necessary to conduct similar research

in the government sector to see which red flags are most effectively perceived by

government auditors in detecting fraud especially in the procurement of goods /

services. Procurement activities of government goods / services were chosen

because it is still one of the activities that contribute greatly in the case of

corruption (fraud)

This research is different from previous research. In this study, the red flags that

will be used as research instruments similar to those used in Utomo's (2014) study

are red flags contained in the Petunjuk Teknis Badan Pemeriksa Keuangan RI.

Pemeriksaan Atas Pengadaan Barang/Jasa Pemerintah Nomor 9/K/I-

XIII.2/10/2009. Red Flags in the BPK RI Technical Guidelines is used because it

is a red flags specifically related to the procurement of government goods /

services.

In this study other than using the external auditor government as respondents will

also include the internal auditor of the government that is the auditor on BPKP as

respondents. In addition, as did Moyes (2007), this study will also see whether the

experience of government auditors will lead to differences in the perception of

government auditors over the effectiveness of red flags in detecting fraud.


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Based on the description above, then in this research asked some research

questions as follows:

1) Which red flags are most considered effective by the government's

external and internal auditors in detecting fraud on the procurement of

government goods / services?

2) Is there a difference of perception between the government's external

auditor and the internal government auditor over the effectiveness of red

flags in detecting fraud on procurement of government goods / services?

3) Is there a difference in perceptions of the effectiveness of red flags in

detecting fraud based on the auditor's experience?

LITERATURE REVIEW

Procurement of Government Goods / Services

According to Schiavo-Campo and Sundaram (2000: 315), Government

procurement is the acquisition of goods, services, and public works in timely

manner that results in best value to the government and the people. Schiavo-

Campo and Sundaram (2000) also said that most countries have legal rules

relating to procurement of government goods / services that contain provisions on

the formal procurement process from the beginning of the process to the signing

of contracts or agreements. The Indonesian government also has rules related to

the process of procurement of goods / services. Presidential Regulation No.

54/2010 concerning Procurement of Government Goods / Services as lastly

amended by Presidential Regulation No. 4/1955 is the prevailing laws and

regulations as a guideline in the implementation of government procurement of

goods / services for officials and / or committees of goods / services procurement .

In clause 1 point 1 of Perpres No. 4 of 2015, it is explained that the Procurement

of Government Goods / Services is an activity to obtain goods / services by

Ministries / Institutions / Institution which process starts from the planning needs

until completion of all activities to obtain goods / services. Perpres No. 4 of 2015

also explains that the procurement of goods / services must be implemented in

accordance with the principle of procurement of goods / services that is efficient;

effective; transparent; open; compete; fair / non-discriminatory; and accountable.

The parties related to the procurement process of goods / services in accordance

with the regulations are as follows:

1. Budget User / Proxy User (PA / KPA);

2. Committing Officer (KDP);

3. Procurement Services Unit (ULP) / Procurement Official;


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4. Committee / Official Receiving Officer.

In Presidential Regulation no. 4 at 2015 has set the stage of implementation of

procurement of goods / services government. In general, the stages of

procurement of goods / services is divided into 2 phases, namely the preparation

stage of procurement and the implementation stage of procurement. Presidential

Regulation no. 4 at 2015 also explains that the procurement of goods / services

must be done electronically (e-procurement) through electronic procurement

system (SPSE) and for its implementation is done by electronic procurement

service (LPSE) established in every government agency.

Government Auditor and Government Auditor Experience

The government auditor according to Guy (2002) is an auditor working on various

agencies / agencies of the central government as well as local government. The

main task of government auditors is to determine compliance with laws, laws,

policies, and procedures. The government auditor is responsible for auditing the

executive and reporting it to the legislature.

Government auditors in Indonesia basically work on the following three agencies:

the Supreme Audit Agency (BPK), the Financial and Development Supervisory

Board (BPKP) and the Inspectorate at the Ministry or in the Local Government.

The Supreme Audit Agency (BPK) is one of the state's top institutions in charge

of auditing state financial management and accountability. In accordance with

Article 23E of the 1945 Constitution, the Supreme Audit Board can be regarded

as an external auditor of government due to the independent and independent

position of BPK and not under the Head of Government (President). Meanwhile,

the Financial and Development Supervisory Board (BPKP) and Inspekstorat at the

ministries / agencies or at the local government is an agency responsible to

supervise and inspect internal government activities as regulated in Government

Regulation Number 60 Year 2008 regarding Government Control System. So it

can be said that BPKP and Inspectorate is an internal government auditor

(auditor).

In accordance with the first generally accepted auditing standards (GAAS) that

audits should be conducted by persons already in training and having sufficient

technical skills as an auditor. This first generally accepted auditing standard is

interpreted that the auditor should have formal education, sufficient practical

experience, and follow a continuing professional education (Arens et al., 2011:

42). The experience of government auditors can be seen from how many credit

numbers that have been owned by the auditor. According to the Regulation of the

Minister of Administrative Reform of the State Civil and Bureaucracy Reform

No. 51 of 2012 states that the auditor's credit score is the unit of value of each

item of activity and / or the accumulation of the value of items of activity that


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must be achieved by the auditor which is the performance appraisal as one of the

conditions for appointment, promotion and / or rank. The number of credit

numbers owned by a government auditor can be seen from the functional position

of the auditor. According to Presidential Decree (Keppres) RI No. 87 of 1999 on

the Functional Group of Civil Servant Officials as amended by Presidential

Decree no. 97 of 2012, Functional Position is a position that shows the duties,

responsibilities, authorities, and rights of a civil servant in an organizational unit

which in the performance of its duties is based on certain skills and / or skills and

is independent.

Fraud and Red Flags of Fraud

DiNapoli (2008) defines red flags as an unusual or different circumstance.

According to Tuanakotta (2010), red flags are symptoms of fraud. Red flags do

not indicate that a person is guilty or innocent but rather a warning sign of fraud.

Albrecht et.al (2014) termed red flags as an indicator of fraud. According to

Albrecht et al, to detect fraud the auditor should be aware of the existence of red

flags and investigate whether the indicator is due to fraud that actually occurred

or caused by other factors. Albrecht et al. (2014: 473) divides the fraud indicators

into 6 (six) groups: (1) accounting anomalies; (2) weakness of internal control;

(3) analytical anomalies; (4) excessive lifestyles; (5) unfair behaviour; and (6)

information and complaints.

Accounting anomaly indicators generally occur involving problems with source

documents, incorrect journal entries, and inaccuracies in the ledger. Cheating

occurs when there is a combination of perceived pressure, opportunity /

opportunity, and rationalization. When individuals in the organization experience

a lot of pressure and everything is nationalized, then at the same time the

organization overrides the internal controls then the risk of fraud becomes

greater. An analytical anomaly indicator is a procedure or relationship that is very

unnatural or very unrealistic. Analytical anomalies include transactions or events

occurring at unusual times and places, conducted by or involving persons who are

or should not be involved, or who use unusual procedures, policies or practices.

The vast majority of people who commit fraud are subject to financial stress.

Sometimes the financial pressures are real, and sometimes the pressure is just

greed. Once fraudsters meet their financial needs, they usually continue to

commit theft and use the funds to improve their lifestyle. Soon after, they have a

lifestyle that is higher than their true ability. Research in psychology reveals that

when a person is the first time to cheat, he will be overwhelmed by the emotions

of fear and guilt. Emotion is an expression of a pressure. To overcome the

perceived pressure, fraudsters often exhibit unusual and recognizable patterns of


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behavior. Although no specific behavior can indicate fraud, behavior change is an

indication of fraud.

Fraud is hard to detect by the auditor, because every fraudster will always hide

evidence or traces of his fraudulent actions. Therefore, information and

complaints are considered as an indicator of fraud (red flags) by the auditor but

not as evidence of fraud. This is because the auditor needs to conduct further

investigation to ensure the correctness of the information and the complaint.

In government one of the most frequent sectors of fraud (corruption) is the

procurement of goods / services as described previously. Red flags in every stage

of the procurement process have been tried by Lyson and Ferrington (2006) in

Matthew (2013: 20) as follows:

a. The stage establishes the need for goods or services. Some red flags

indicate this stage:

- Too exaggerated in maintaining stocks for the justification of making

purchases;

- Selling items that are still in good condition and useful, while doing the

same purchase of goods;

b. Phase of development of specification of goods / services required. Some

of the red flags in this stage are:

-Create a specification that is only suitable for a single contractor;

- Create specifications that are only suitable for one product;

c. Phase before procurement socialization. Some of the red flags in this stage

are:

- Reason for justification that there is only one sole provider / contractor;

- Technical personnel provide information in advance to one of the

prospective bidders;

d. Socialization of procurement; Some of the red flags in this stage are:

-Restrictions on procurement to prevent qualified suppliers;

- Limit the time to enter the auction, so that only people who get 'leaked'

information at the beginning of the auction;

e. Bid acceptance; Some of the red flags in this stage are:

-Receive an offer when the auction process ends;

- Falsification of documents for acceptable bids;

f. After signing the contract. Some of the red flags in this stage are:

-Receiving goods without inspection or re-checking;


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- No action is taken regarding supplier's non-compliance with terms and

conditions of the goods specified;

The Supreme Audit Agency (BPK) has also identified red flags or termed the

Critical Point on the Technical Guidelines for Procurement of Government Goods

/ Services Procurement. Red flags can be used by government auditors to detect

fraud at every stage of the procurement process. The details of the red flags

contained in the BPK Technical Guideline No.9/K/I-XIII.2/10/2009 on the

Examination of Government Procurement of Goods / Services Procurement.

Development of Hypotheses

Perceptions of External Auditor and Government Internal Auditor on Red

Flags

Effectiveness (Fraud Indicators) on Procurement of Government Goods /

Services.

Differences in information held between internal auditors and external auditors

can lead to information asymmetries that result in internal auditors having more or

better information than external auditors. This is in line with Moyes (2007)

opinion that internal auditors have better information about what is going on

within the organization than with external auditors. This condition makes internal

auditors more aware of information related to indications of cheating (red flags)

that exist within the organization compared with external auditors. So this makes

the internal auditor will have a better perception of the effectiveness of the red

flags in detecting fraud on the procurement of goods / services compared with

external auditors.

In addition, differences in status among government auditors (external and

internal) also allow for differences in perceptions of the effectiveness of red flags

in detecting fraud on the procurement of government goods / services. This is

based on one of the factors that can affect the perception according to Robbins

(2010) are the situation andworkplace.

This leads to the notion that external and internal government auditors have

different perceptions of the effectiveness of red flags in detecting fraud on

procurement of goods / services, as will be tested in hypothesis 1.

Hypothesis 1: There are different perceptions of effectiveness flags in detecting

fraud on procurement of government goods / services among external auditors and

internal government auditors.


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Experience of Government Auditor and Perception on Red Flags

Effectiveness in Procurement of Government Goods / Services

The experience of government auditors can be seen from how many credit

numbers that have been owned by the auditor. According to the law, it is stated

that the auditor's credit score is the unit of value of each item of activity and / or

the accumulation of the value of the items of activity to be achieved by the auditor

which constitutes the performance assessment as one of the conditions for the

appointment, promotion and / or rank. So it can be interpreted that the more

auditors involved in auditing activities (audits), the higher the credit score owned

by the auditor. The number of credit numbers owned by a government auditor will

be visible from the functional position of the auditor. Experienced government

auditors (having a high credit score) will have high functional positions as well,

and vice versa.

According to Robbins (2010) in addition to the factors of the situation /

workplace, experience factors can also affect perception. Smith et al. (2005) argue

that differences in auditors' perceptions of the level of significance of red flags

can be caused by several individual factors. Apostolou et al. (2001) in Smith et al.

(2005) have statistically seen whether demographic factors such as the type of

accounting firm, audit experience, auditor position, and others have an impact on

the level of significance of a red flags according to the auditor. Moyes (2007) says

that the hidden nature of fraud requires an experienced auditor and who has the

expertise of using red flags correctly in order to find the fraud. So this will make

the difference between auditors experienced with auditors who have not / little

experience in recognizing red flags to detect fraud.

Based on the above explanation, it is suspected that there is a difference of

government auditor's perception toward the effectiveness of red flags in detecting

fraud on procurement of goods / services based on the auditor's work experience

viewed from the functional position of the auditor, in accordance with which will

be tested on hypothesis 2.

Hypothesis 2: There is a difference in perceptions of the effectiveness of red flags

in detecting fraud on procurement of government goods / services between

functional positions of government auditors.

In addition to testing the two hypotheses above, this research will also see which

red flags items are most effectively perceived to detect fraud on the procurement

of government goods / services according to external and internal government

auditors by looking at the average of each red flags item. The red flags item that

has the highest average among government auditors will be considered as the

most effective red flags item perceived to detect fraud.


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METHODS

Types of Research, Population, Sample and Respondent

This type of research is a quantitative research. The population in this research is

Government Auditor in West Sumtera and Jambi Province. The sample and

respondents in this study are BPK RI Auditor Representatives of West Sumatra

and Jambi (external auditor of government) and Auditor BPKP Representative of

West Sumatra and Jambi (internal government auditor). This sampling technique

using purposive sampling technique.

Types and Data Collection Techniques

Types of data used in this study are qualitative data and quantitative data. In this

study independent variables using qualitative data and dependent variables using

quantitative data. For data collection techniques that is by using / distributing

questionnaires to respondents.

Research Variables

In this study there are two types of variables:

1. Independent Variable (X)

In this research, independent variable is Government Auditor with 2 (two)

categories: External Auditor and Internal Auditor (X1), and Government

Auditor Functional Position with 5 (five) categories: Skilled Auditor, Auditor

/ First Inspector, Auditor / Young Examiner , Auditor / Examiner Madya, and

Auditor / Main Inspector (X2).

2. Dependent Variable (Y)

The dependent variables in this study are the most considered red flags that

are effective in detecting fraud on the procurement of government goods /

services (Y).

Data Analysis Techniques

To test hypothesis 1 we use different test of t-test. According to Ghozali (2007:

55) Different test t-test is used to see the difference or the relationship between

independent variables with two categories with dependent variables (which are

continuum, metric or interval and ratio). For hypothesis 2, the data analysis

technique used is the analysis of variance (analysis of variance / ANOVA).


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FINDINGS

Overview of Research Objects

The number of samples in this study are as many as 4 government agencies

namely BPK Representative Province of West Sumatra and Jambi, and BPKP

Representative Province of West Sumatra and Jambi. In the four samples were

distributed questionnaires with a total of 152 questionnaires. The number of

questionnaires returned was 103 questionnaires. The number of respondents who

did not return the questionnaires was due to the large number of respondents who

were doing the off-duty service, so up to the time limit of data collection, the

questionnaires that can be collected only amounted to 103 questionnaires. Of the

103 returned questionnaires, a questionnaire that can be processed is as many as

86 questionnaires. While the rest can not be processed because the respondents

did not fill in the complete questionnaire given. So the rate of his respond rate is

56.58%. Questionnaires are delivered and picked up directly at each instamsi.

Descriptive Statistics

Based on the result of statistical analysis, it is known that the respondent of the

external auditor (in this research is the respondent who came from the BPK

institution) has the highest score of 531, and the lowest value is 198, with the

mean value of 445,3061. As for the respondents internal auditors (in this study

were respondents who came from the agency BPKP) has the highest value of 565,

and the lowest value of 189, with a mean value of 399.2162.

Normality Test and Levene’s Test

Normality test results with Kolmogorov-Smirnov Test indicate the value of

Asymp. Sig is 0.076, this value is above the value of α 0.05. So with the results it

can be said that the data is normally distributed to meet one of the assumptions of

analysis of variance (ANOVA)

The result of statistical test shows levene statistic value of 0.343 far above 0,05.

This shows that each subject group of respondents meet the same variant so that it

has fulfilled the assumption of ANOVA (Hair et al, 2006).

Hypothesis Testing and Discussion

Hypothesis (H1) suspects that there is a difference of perception to the

effectiveness of red flags in detecting fraud on procurement of goods and services

among external and internal auditors. To test this hypothesis, an independent

sample t-test was performed. Based on statistical test result, it was found that

Levene Test gives F value equal to 12,537 with significance level 0,001 meaning


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significant, so this research model has variance which is not same. Thus, the value

of t seen is a value with an unequal variance assumption value, ie with a t value of

2.378 with a significance level of 0.021. So it can be concluded that hypothesis

(H1) is acceptable.

Differences in the absorption of information obtained by internal auditors with

external auditors, causing differences in perceiving the symptoms of effective

cheating that occurred within an organization. Internal auditors have more

information related to the internal state of the company, this is also because

organizations are more open in providing information to internal auditors than

with external auditors. So this causes internal auditors have a better perception

compared with external auditors. The results of this study are similar to that of

Moyes (2007) who stated that internal auditors have better information about the

situation that occurs within the organization compared with external auditors. So

this makes the difference in information owned by internal auditors compared

with external auditors. Information owned by internal auditors will better support

the intenal auditor to be aware of any indications of fraud contained within the

organization.

Hypothesis (H2) states that there is a difference of perception on the effectiveness

of red flags in detecting fraud on procurement of government goods / services

between functional positions of government auditors. To test this hypothesis, the

analysis of variance (analysis of variance / ANOVA) was tested. Based on the

results of statistical tests, the overall experience of auditors has no significant

effect on auditors' perceptions of the effectiveness of red flags. The value of

significance for experience is 0.583 with a value of F 0.654. This shows that there

is no influence of the auditor's experience on the auditor's perception on the

effectiveness of the red flag. So the hypothesis (H2) is rejected. To see the

difference of perception of auditor to red flags between functional position of

auditor can be seen based on scheffe test result. In table 8 of scheffe test results, it

is known that the auditor's experience based on functional position toward the

effectiveness of red flags also does not have significant value.

The results of this study differ from the results of research from Apostolou et al.

(2001) in Smith et al. (2005) have statistically seen whether demographic factors

such as the type of accounting firm, audit experience, auditor position, and others

have an impact on the level of significance of a red flags according to the auditor.

In addition, this result is also inconsistent with Moyes (2007) who says that the

hidden fraud nature requires an experienced auditor and who has the expertise of

using red flags correctly in order to find the fraud. This may be the case because

the auditor who is the respondent in this study is mostly auditors who already

have certification examiners and procurement experts, but also most auditors are

auditors who have attended a fraud examination training / examination with a

specific purpose. In addition, the number of respondents by functional position


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evenly, it can also affect the results of statistical tests. So that experience factor

which represented by functional position in this research do not have significant

influence to difference of perception of auditor toward effectiveness of red flags.

The study also looks at which red flags items are most effectively perceived to

detect fraud on the procurement of government goods / services according to

external and internal government auditors by looking at the average value of each

red flags item. Based on the results of descriptive statistical analysis in this study,

obtained two fraud indicator is the most perceived effective to detect fraudulent

procurement of goods / services government.

The first most perceived effective indicator for detecting fraud in the procurement

of government goods / services according to government auditors is that the

volume of goods / construction is not the same as that required in the technical

specification with a mean of 4.76. Furthermore the second most perceived fraud

indicator effective according to the government auditor in the procurement of

government goods / services is fictitious payment with a mean of 4.70.

CONCLUSION

Based on the result of research, it can be concluded that: (a) There is a significant

difference of perception between external auditor and internal auditor toward red

flag effectiveness. (b) The auditor's experience has no significant effect on the

auditor's perception on the effectiveness of red flags. (c) The first most perceived

effective indicator for detecting fraud in the procurement of government goods /

services according to the government auditor is the volume of goods /

construction is not the same / not as requested in the technical specification.

This study has several limitations that can not be avoided and can affect the

results of research. The limitations are: (a) This research is conducted only on

auditors who work in the office of BPK and BPKP representatives of West

Sumatra and Jambi only. (b) Low respond rates due to the time of the study

coinciding with the time of the auditor to conduct examination of SKPD and other

government agencies, so that many auditors who do not return the questionnaire

due to busy.

This research is expected to provide ideas for further research development. Based

on the existing limitations, further research is expected to consider the following

matters: (a) The sample for this study may be extended not only to BPK offices

and BPKP representatives of West Sumatra and Jambi provinces only. (b) For

respondents internal auditors may also use SPI members located at the Office. (c)

The research time should be designed so that it does not coincide with the time the

auditor checks the check, so the respond rate can be further improved.


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PERCEPTION OF GOVERNMENT AUDITORS ON RED FLAGS ...seabc.unsri.ac.id/seabc2017/2017/92.pdf · person is guilty or innocent but rather a warning sign of fraud. Red Flags contained in