Journal of Positive School Psychology http://journalppw.

com
2022, Vol. 6, No. 4, 6308 – 6314

Influence of Internal Audit on Fraud Prevention (Case Study at

Pos Indonesia Co. Ltd.)

1IslamiarthaAfrah, 2Yolanda Margaretha Wonga, 3Yohana Angelina, 4Sondang

Kristina Panjaitan, 5Daniel Edrianto Sagala, 6Rini Susiani

12345
Faculty of Economics and Business, Widyatama University, Bandung, Indonesia
6
Faculty of Economics and Business, Widyatama University, Bandung, Indonesia, [email protected]

Abstract
The purpose of this study was to determine how the influence of internal audit on the prevention of
fraud case study at Pos Indonesia Co. Ltd. Bandung Headquarters. The factors tested in this study
were Internal Audit (Independence and Objectivity, Proficiency and Due professional) careas the
independent variable, while Fraud Prevention as the dependent variable. The type of research used is
descriptive explanatory research. The population in this study were 30 people. The sampling
technique used in this study is non-probability sampling with saturated sampling technique, so the
number of samples in this study was 30 people. While the analytical method used in this study is
simple linear regression analysis at a significance level of 5% using the SPSS Ver 25 program. Based
on the results of the study, it shows that internal audit has a significant effect on fraud prevention. The
magnitude of the influence of internal audit in contributing to fraud prevention is 47.4%. This means
that the more independent and objective, as well as having the professional skills and accuracy of an
internal auditor in carrying out their duties, the internal audit can run well, and be able to prevent
fraud.

Keywords: Internal Audit, Fraud, Fraud Prevention, Audit, Pos Indonesia.

INTRODUCTION provide analysis, assessment, recommendations

or suggestions to management to make
The fierce increasing competition within the
decisions in the future, so that the effectiveness
current period of globalization coincides with
assessment of a control system is needed to
the implementation of the Asean Economic
fraud prevention (Handoyo & Bayunitri, 2021).
Community in 2015 where companies must
For this reason, in its implementation, internal
follow the rapid market development has
auditors must have an independent attitude,
implications for business behavior (Suci,
objective, professional skills and accuracy
Asmara, & Mulatsih, 2016). The rapid
(Christina, Rahayudhy, & Nurmeilita, 2021).
development of this company certainly has a
positive and negative impact. To avoid or Research from the Association of Certified
minimize negative impacts such as falsification Fraud Examiners (ACFE) Global appears that
of financial statements carried out by every year an ordinary of 5% of the
individuals or groups in the company, for that organization income falls casualty to extortion
in the management of the company, an internal (Aulia, 2021). This happened to the state-
audit is need (Al-Shaheen, Bai, Smith, Imre, & owned company, namely Pos Indonesia Co.
Uman, 2020). The results of the internal audit Ltd. where there is a deviation of funds in the
examination are useful to provide an opinion expenditure of additional costs for the
containing adequate information so that it can
6309 Journal of Positive School Psychology

distribution of Social Protection Cards reviewed by the supervisor (Tugiman, 2006).

amounting to Rp 2.4 billion and irregularities in Internal Audit has three ideal roles, namely
the distribution of bonuses to the Board of there is (a) The Role of Business Risk-Based
Directors and Commissars amounting to Rp 5.3 Data Analysis/Review, (b) the Role of
billion by selling asset within the shape of Accelerators/Drivers of The Realization of
share in Mantap Bank amounting to Rp 324.61 Inherent Supervision and (c) the Role of
billion (Movanita & Galih, 2017). Fraud cases Adjusters/Adhesives of Business Strategies
also occurred in several SOEs, namely Garuda (Kumaat, 2011).
Indonesia Co. Ltd. (2018) (Nursyamsi &
International Profesional Practice Framework
Rezkisari, 2022), Waskita Co. Ltd. (2018)
or International Standard of Internal Audit
(Pratama & Suhendi, 2020), Asabri Co. Ltd.
Professional Practice is an official guideline for
(2012-2019) (Ayyubi, 2021).
internal audit practices in order to maintain the
The above phenomenon shows that the quality of work results (The Institute of Internal
development of the company makes Auditor, 2017). Like a professional standard,
management difficult in carrying out this standard continues to be adjusted to the
supervision, and to overcome the potential development of the profession. This Standard
emergence of fraud in budgetary explanations, consists of (1) Attribute Standards governing
internal audit plays an perative part in the objectives, authorities, and responsibilities,
mitigating the occurrence of fraud that will Independence, and objectivity, proficiency,
harm the company. professional accuracy, Continuous professional
development, Insurance and Quality
Improvement Program Requirements,
LITERATURE REVIEW Insurance program reporting and Quality
Improvement, (2) Perfomance standars
Employee Performance Review consisting of Management of Internal Audit
Internal Audit Activities, Nature of Work, Assignment
Planning, Implementation of Assignments,
Internal Audit is an independent activity, Communication of Assignment Results,
objective belief, and consultation designed to Development Monitoring (The Institute of
add value and enchance the operating activities Internal Auditor, 2017). Independence may be
of an organization. This internal audit helps a condition in which inside internal auditors are
organizations achieve their goals by taking a free from circumstances that may debilitate
systematic and disciplined approach to their capacity and exercises to able to carry out
evaluating and improving the effectiveness of their obligations unbiasedly (The Institute of
risk management, control, and governance Internal Auditor, 2017).
processes (Auditors, 2015).
Objectivity is an fair-minded mental state of
Internal auditors must be able to contribute to mind that permits internal auditors to carry out
risk governance and management by assessing their duties in such a way that they have
the ampleness of controls set up to mitigate confidence in their work and without
such risks to an worthy level (The Institute of compromise in quality (Pitt, 2014). Proficiency
Internal Auditor, 2017). The objectives, powers is the knowledge, aptitudes, and other
and responsibilities of the internal audit activity competencies required in carrying out their
must be formally characterized in the internal obligations and duties (IIA, 2009). Proficiency
audit charter, and must be consistent with the is responsibility of the of the internal audit
Internal Audit Mission and the elements departement and internal auditor (IIA, 2009).
required in the Professional Practice Due Professional Accuracy is a precision and
Framework (The Institute of Internal Auditor, expertise that must be possessed where an
2017). Internal auditors are responsible for internal auditor must be quite careful
planning and carrying out inspection tasks, (reasonably prudent) and competent (Al-
which must be approved and reviewed or Sukker, Ross, Abdel-Qader, & Al-Akra, 2018).
Islamiartha Afrah 6310

Being professionally careful does not mean that RESEARCH METHODS

there will be no mistakes. Internal audits must:
This study uses an explanatory approach that
(a) have knowledge, expertise, and various
aims to connect or explain between two
disciplines needed to be brought out the
variables and aims to prove a hypothesis or test
responsibility of the examination
a theory (Bowen, Rose, & Pilkington, 2017).
professionally. (b) may provide assurance or
The number of research samples was 30 people
certainty that the technical and educational
with the sampling criteria, namely internal
internal examiners are appropriate for the
audit at Pos Indonesia Co. Ltd. The data
examiner to be implemented (Soh & Martinov-
collection procedure uses a questionnaire with
Bennie, 2011).
a sampling method using non-probability
Fraud Prevention sampling with saturated sampling techniques. a
technique of taking data or samples so that all
Fraud is an aberration and illegal act, which is the data that are likely to be selected as samples
done intentionally for certain purposes such as are not equally large. Based on the researcher's
cheating or giving a misappropriation deceive policy in determining the sample elements to be
to other parties, carried out by individuals both used (Sugiyono, 2016). This study uses the
from inside and from exterior the organization Statistical Package for the Social Sciences
(Wells, 2011). An act of cheating will occur if (SPSS) with heteroscedasticity test and simple
driven by a pressure and the need of a person linear regression analysis, while the
with an environmental record also allows to development and testing of hypotheses uses
act. The driving factors for fraud are: (1) Fraud partial test and coefficient of determination test
Triangle Theory (opportunity rationalization (R2). The research analysis technique uses an
pressure), (2) GONE Theory, there are four inferential statistical analysis approach where
driving factors for someone to commit fraud, the analysis used to analyze the data is a
namely: greed, need, exposur), and opportunity. summary of all methods related to the analysis
(3) Monopoly theory, fraud occurs due to the of some of the data and then arrives at
factors of power and monopoly that are not forecasting or drawing conclusions about the
accompanied by accountability (Krambia- entire parent data (population).
Kapardis, 2016).
There are various ways that can be done in
preventing fraud namely Preventing fraud RESULTS AND DISCUSSION
according to triangle fraud theory (a) Reducing
Research Result
Situational "Pressure" that allows fraud, (b)
Reducing the "Opportunity" of fraud, (c) Descriptive Statistical Analysis
Reducing the "justification" of cheating by
strengthening the personal integrity of Internal Audit Measurement is measured using
employees. With the prevention of fraud 3 indicators developed into 16 statement
applied by the company can minimize the instruments. The results of the recapitulation of
action of the chance of fraud, because all acts respondents' responses showed 78.2% of
of fraud can be detected quickly (Karyono, respondents expressed strongly agree, 21.8%
2002). agreed, 1.2% agreed, 1.4% disagreed. So it
was concluded that the respondents' responses
Research Hypothesis about the Internal Audit can be said to be very
good with an average score of 4.68% which is
(Ho): There’s no significant effect of internal
at intervals of 4.21 - 5.00. (See figure 4.1).
audit on fraud prevention.
(Ha): There’s a significant effect of internal
audit on fraud prevention.
6311 Journal of Positive School Psychology

Figure 1 Continuum Line Internal Audit

Variable Assessment Categorization
The results of the recapitulation of respondents'
responses showed 58.8% of respondents
expressed strongly agree, 34.9% agreed, 4.4%
agreed enough, 1.3% disagreed, and 0.2%
strongly disagreed. So it was concluded that Figure 3 Normality Test
respondents' responses about fraud prevention
were said to be very good with an average Multicollinearity Test Result
score of 4.51% which was at intervals of 4.21 - The table above shows the results that the
5.00. (See figure 4.2). tolerance value obtained for the internal audit
variable is 1,000>0.1 and the variance inflation
factor (VIF) 1,000<10. So it can be concluded
that there is no multicollinearity between the
independent variables in the model.

Figure 2 Continuum Line Categorization of

Fraud Prevention Variable Assessment
Figure 4 Multicollinearity Test
Normality Test Result
Simple Linear Regression Analysis
The result of the normality test utilizing the
The table above shows the result of a value of
kolmogrov smirnov test showed that the
3.767, of 0.667. then a simple linear regression
magnitude of the value of kolmogrov smirnov
equation can be formed as follows:
was 0.213 with a significant value of 0.116.
The significant value generated by kolmogrov Y= 3,767 + 0.667 + e
smirnov is more than or 5% (real level of
research significance) i.e. (0.116>0.05), or If the constant is 3,767, indicating that when
normal-distributed residual data, in other words the Internal Audit Effect is zero (0) and there is
regression models are feasible to use because no change, then Fraud Prevention will be worth
they meet the assumption of normality or as much as 3,767, If the variable value i.e.
normal distribution data. internal audit has a regression coefficient value
of 0,667 indicates that the internal audit
The data obtained spreads around the diagonal increments then the variable fraud prevention
line and follows the direction of the diagonal will increases by 0,667 times.
line or the histogram graph shows a normal
distribution pattern, then the regression model
fulfills the assumption of normality.
Islamiartha Afrah 6312

4.93 and the lowest scoring average of 4.06.

Proficiency has been applied very well with the
highest average scoring of 4.8 and the lowest
scoring average of 4.66. Due Professional care
has been applied very well with the highest
average scoring of 4.76 and the lowest scoring
average of 4.6.

Figure 5 Simple Linear Regression Test The excecution of fraud enforcement at Pos
Indonesia Co. Ltd. as a whole is in the category
Coefficient of Determination Test of very well and meets the three criteria of
The coefficient of determination test results fraud prevention components. As for the
showed that Adjusted R square of 0.474. then it respondent's response to the fraud prevention
can be concluded that the independet variable variable, it shows that the average highest
in this study is an internal audit (X) affecting scoring value is reducing the "chance" of
47.4% of variable dependents, namely cheating while the lowest scoring is reducing
Prevention (fraud) (Y). The remaining 52.6% the "justification" of fraud by strengthening
was affected by other variables not included integrity. Reducing situational "pressure" that
within the investigate factors. causes cheating has been applied very well with
the highest average scoring of 4.8 and the
Partial Hypothesis Test (t) lowest scoring average of 4.23. Reducing the
"Chance" of cheating has been applied very
Based on the results of the t (partial) test in the
well with the highest average scoring of 4.63
regression model, it can be seen that the
and the lowest average scoring of 4.23.
calculation> ttabel which is 5,214>1,966, then
Reducing the "justification" of cheating by
it can be concluded that Ha is accepted, this
strengthening integrity has been applied very
means that partially internal audit variables
well with the highest average scoring of 4.66
have a significant effect on the fraud prevention
and the lowest average scoring of 4.46.
variable at Pos Indonesia Co. Ltd. Bandung.
Effect of Internal Audit on Fraud Prevention
The results of descriptive analysis of the
influence of internal audits that the total actual
score obtained from all statements that form
variables regarding the influence of internal
audits shows an average result of 4.68 belongs
to the category of excellent. This shows that
Figure 6 Test Hypothesis Testing t respondent answers about the influence of
Discussion internal audits are expected to prevent fraud
belongs to an excellent category. This means
Implementation of Internal Audit in Fraud the prevention of fraud in Pos Indonesia Co.
Prevention at Pos Indonesia Co. Ltd. Bandung Ltd. Bandung Headquarters has been running
The execution of internal audit at Pos Indonesia very well, this is indicated by the execution of
Co. Ltd. as a whole is in the category of the International Standard of Internal Audit
excellent and meets the three criteria of the Professional Practice (SIPPAI) to be specific
internal audit component. As for the Independence & Objectivity, Due Professional
respondent's response to the Internal Audit care, and Proficiency in the company that
variable, the average dimension with the prevention What is done by Pos Indonesia Co.
highest score value is professional accuracy Ltd. is good in terms of implementing or
while the lowest scoring value is proficiency. creating honesty, ethics, and management
Indepedence and Objectivity have been applied responsibilities evaluate fraud risk and
very well with the highest average scoring of supervision of the audit committee.
6313 Journal of Positive School Psychology

Based on the comes about of the t (partial) test CONCLUSION AND

in the regression model, it can be seen that the RECOMMENDATIONS
calculation>ttabel which is 5,214>1,966 then it
Conclusion
can be concluded that Ha is accepted, fraud
prevention variable at Pos Indonesia Co. Ltd. The results showed that internal audit has a
Bandung. The results of the determination incorporates a noteworthy impact influence on
coefficient (Adjusted R square) test showed a fraud prevention at Pos Indonesia Co. Ltd.
figure of 0.474, then can be concluded that the Bandung Headquarters, where all internal
independent variable in this study Internal audit audits are responsible for meeting standards
(X) affected 47.4% of dependent variabels and related to individual responsibility in terms of
Fraud Prevention (Y) in Pos Indonesia Co. Ltd. independence, objectivity, proficiency, due
Bandung Headquarters. In the interim, 52.6% professional care and standards related to
impacted by other factors that are not included execution of his work responsibilities. So that it
within the variables of this study. is more independent and objective, and has the
professional ability and accuracy of an internal
The results of this study are in accordance with
auditor in carrying out its duties, the
the International Professional Practices
implementation of internal audits can run well,
Framework (IIA, 2016) which states that
and is able to prevent fraud.
standards are applied to individual internal
auditors and internal audit activities as a whole Recommendations
show that the excecution of internal audit has
been carried out by applying audit standards The Company is expected to avoid conflicts of
where all Internal auditing is responsible for interest in planning and reporting audit results
meeting standards related to individual to improve the objectivity and independence of
responsibilities in terms of objectivity, auditors, as well as improve fraud prevention
proficiency, due professional care and by improving the identification and analysis of
standards related to the excecution of their risks that may occur in each activity, routine
work responsibilities. That the more and separate performance evaluations and
independent and objective, have the follow-up from management on audit
professional ability and accuracy of an auditor suggestions and discoveries, and detecting
in carrying out their duties, so that it has a low fraud abuse by verifying the document in its
risk and does not cause fraud that can harm the entirety. For the next researcher, it is expected
company. to grow the scope of research about by
including independent variables outside of this
The comes about of this think about are in line study such as risk management and other
with the comes about of past investigate factors.
conducted by Septiana and Widya (2016)
argued that internal audits have an effect in the
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