Competence of external auditors in Colombia and situations that allow fraud detection
Keywords:
professional competence, financial audit, financial fraud, fraud detection
Abstract
Fraud negatively affects companies, for which an early detection must be carried out by management and external auditors, who are the first line of defense against this phenomenon. This quantitative correlational study seeks to identify the relationship between the professional competence of external auditors and the development of skills for the detection of fraud in Colombia by conducting a survey of external auditors from a major auditing firm. With the information obtained, it was possible to identify the dimensions of professional competence that contribute to the detection of fraud.
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References
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Arifuddin, R. H., & Indrijawati, A. (2020). Auditor Experience, Work Load, Personality Type, And Professional Auditor Skeptisism Against Auditors’ Ability in Detecting Fraud. Journal of Talent Development and Excellence, 12(2s), 1878-1890.
Barral, A., Bautista, R., Molina, H., (s.f). Convergencia con las Normas Internacionales de Auditoría (NIA) en Colombia. Consejo Técnico de la Contaduría Pública CTCP
Bernardi, R. A. (1994). Fraud detection: The effect of client integrity and competence and auditor cognitive style. Auditing, 13, 68.
Bhasin, M. L. (2007). Forensic accounting: A new paradigm for niche consulting. The Chartered Accountant, January.
Brasel, K. R., Hatfield, R. C., Nickell, E. B., & Parsons, L. M. (2019). The Effect of Fraud Risk Assessment Frequency and Fraud Inquiry Timing on Auditors Skeptical Judgments and Actions. Accounting Horizons, 33(1), 1-15. doi:10.2308/acch-52349
Carazas, S. E. G. (1993). Control organizacional. Quipukamayoc, 1(2), 51–62. Drogalas, G., Pazarskis, M., Anagnostopoulou, E., & Papachristou, A. (2017). The effect of internal audit effectiveness, auditor responsibility and training in fraud detection. Journal of Accounting and Management Information Systems, 16(4), 434-454. doi:10.24818/jamis.2017.04001
Ehiametalor, E. T. (1990). Business and economics education: principles and methods. Evans Brothers Nigeria Publishers.
Franco Ruiz, R. (2020). Las teorías del control y evaluación organizacional independiente. Revista Criterio Libre, 18(32), 71–107. http://search.ebscohost.com/login.aspx?direct=true&db=fua&AN=148333520&site=eds-live
Furiady, O., & Kurnia, R. (2015). The Effect of Work Experiences, Competency, Motivation, Accountability and Objectivity towards Audit Quality. Procedia - Social and Behavioral Sciences, 211, 328–335. https://doi.org/10.1016/j.sbspro.2015.11.042
Ghasemi, A., & Zahediasl, S. (2012). Normality Tests for Statistical Analysis: A Guide for Non-Statisticians. International Journal of Endocrinology and Metabolism, 10(2), 486–489. http://doi.org/10.5812/ijem.3505
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Halbouni, S. S., Obeid, N., & Garbou, A. (2016). Corporate governance and information technology in fraud prevention and detection. Managerial Auditing Journal.
Izzalqurny, T. R., Subroto, B., & Ghofar, A. (2019). Relationship between Financial Ratio and Financial Statement Fraud Risk Moderated by Auditor Quality. International Journal of Research in Business and Social Science, 8(4), 34–43. https://doi.org/http://dx.doi.org/10.20525/ijrbs.v8i4.281
Jaffar, N., Salleh, A., Iskandar, T. M., & Haron, H. (2008). The effect of the external auditors’ ability to assess fraud risk on their ability to detect the likelihood of fraud. International Journal of Management Perspectives, 1(1), 49-70.
Kabuye, F., Nkundabanyanga, S. K., Opiso, J., & Nakabuye, Z. (2017). Internal audit organisational status, competencies, activities and fraud management in the financial services sector. Managerial Auditing Journal, 32(9), 924–944. https://doi.org/10.1108/MAJ-09-2016-1452
Krummeck, S. (2000). The role of ethics in fraud prevention: a practitioner’s perspective. Business Ethics: A European Review, 9(4), 268–272. https://doi.org/10.1111/1467-8608.00200
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Lascano, MD (2018). Gestión del riesgo organizacional de fraude y el rol de Auditoría Interna. Contabilidad y Negocios, 13 (25), 57-69. doi: 10.18800 / contabilidad.201801.004
Ljubisavljević, S. (2000). Uloga eksternog revizora u okruženju [The Role of the External Auditor in Environment]. Faculty of Economics-University of Kragujevac, Kragujevac.
Mohamed, N., Sanusi, Z. M., Hasnan, N. H. B., Heang, L. T., & Isa, Y. M. (2019). Analysis on Competencies and Situational Support on Performance Effectiveness of Forensic Accountants in Malaysia. International Journal of Business & Management Science, 9(2).
Okoro, J. (2014). Assessment of Accounting Competencies Possessed by Postgraduate University Business Education Students to Handle Entrepreneurship Business Challenges in Nigeria. World Journal of Education, 4(1), 1–10. https://eric.ed.gov/contentdelivery/servlet/ERICServlet?accno=EJ1158714
Oviedo, H. C., & Arias, A. C. (2005). Aproximación al uso del coeficiente alfa de Cronbach. Revista colombiana de psiquiatría, 34(4), 572-580.
Pedrosa, I., Juarros-Basterretxea, J., Robles-Fernández, A., Basteiro, J., & García-Cueto, E. (2015). Pruebas de bondad de ajuste en distribuciones simétricas,¿ qué estadístico utilizar?. Universitas psychologica, 14(1), 245-254.
Rezaee, Z. (2005). Causes, consequences, and deterence of financial statement fraud. Critical Perspectives on Accounting, 16(3), 277–298. https://doi.org/10.1016/S1045-2354(03)00072-8
Salas-Ávila, J. A., & Reyes-Maldonado, N. M. (2015). Modelo propuesto para la detección de fraudes por parte de los auditores internos basado en las Normas Internacionales de Auditoría / Fraud Detection Proposed Model by Internal Auditors Based on International Standards on Auditing / Modelo proposto para d. Cuadernos de Contabilidad, 16(42), 579–623. https://doi.org/10.11144/Javeriana.cc16-42.mpdf
Santander Ramírez, V., & Contreras Ramírez, R. (2013). Credibilidad De Los Auditores Externos Post Caso La Polar. UCMaule - Revista Académica de La Universidad Católica Del Maule, 44, 67–88.
Sulaiman, N. A., Shahimi, S., & Nashtar Singh, R. K. (2019). People and audit process attributes of audit quality: Evidence from Malaysia. Management & Accounting Review (MAR), 18(2), 47-80.
Sulistyowati, L., & Supriyati. (2015). The effect of experience, competence, independence, and professionalism of auditors on fraud detection. Indonesian Accounting Review, 5(1), 95–110. https://doi.org/10.14414/tiar.v5i1.494
Sunyoto, E., Djaali, D., & Akbar, M. (2017). The effect of functional training, integrity, competency and organizational commitment of quality audit in the audit board of republic indonesia. IJHCM: International Journal of Human Capital Management, 1(1), 76–94. https://doi.org/10.21009/IJHCM.01.01.07
Susanto, H., Azhar Azis, H., Mulyani, S., & Sukmadilaga, C. (2019). The level of fraud detection affected by auditor competency using digital forensic support. Utopia y Praxis Latinoamericana, (24), 252–267
Tahmasbi, M., Rahmani, H., & Bakhtiarvand, M. Z. (2020). The Effect of Audit Quality on the Market Value of Cash Holdings: Evidence from Tehran Stock Exchange and IACPA. International Journal of Management, Accounting & Economics, 7(10), 611–621. https://doi.org/10.5281/zenodo.4274939
Varchuk, O. A., & Grabovenko, O. A. (2016). Internal control and internal audit: definition, similarities and differences. Экономика: Реалии Времени, 1(23).
Wuerges, A. F. E., & Borba, J. A. (2011). Accounting Fraud: an estimation of detection probability. Available at SSRN 1954783.
Zambrano, Y. (2015). La auditoría forense: un mecanismo para detectar el fraude de estados financieros en Colombia. Inquietud Empresarial. Vol. XV (2), 13-36.
Arboleda, F. J. M., Guzman-Luna, J. A., & Torres, I.-D. (2018). Fraud detectionoriented operators in a data warehouse based on forensic accounting techniques. Computer Fraud & Security, 2018(10), 13–19. https://doi.org/https://doi.org/10.1016/S1361-3723(18)30098-8
Arifuddin, R. H., & Indrijawati, A. (2020). Auditor Experience, Work Load, Personality Type, And Professional Auditor Skeptisism Against Auditors’ Ability in Detecting Fraud. Journal of Talent Development and Excellence, 12(2s), 1878-1890.
Barral, A., Bautista, R., Molina, H., (s.f). Convergencia con las Normas Internacionales de Auditoría (NIA) en Colombia. Consejo Técnico de la Contaduría Pública CTCP
Bernardi, R. A. (1994). Fraud detection: The effect of client integrity and competence and auditor cognitive style. Auditing, 13, 68.
Bhasin, M. L. (2007). Forensic accounting: A new paradigm for niche consulting. The Chartered Accountant, January.
Brasel, K. R., Hatfield, R. C., Nickell, E. B., & Parsons, L. M. (2019). The Effect of Fraud Risk Assessment Frequency and Fraud Inquiry Timing on Auditors Skeptical Judgments and Actions. Accounting Horizons, 33(1), 1-15. doi:10.2308/acch-52349
Carazas, S. E. G. (1993). Control organizacional. Quipukamayoc, 1(2), 51–62. Drogalas, G., Pazarskis, M., Anagnostopoulou, E., & Papachristou, A. (2017). The effect of internal audit effectiveness, auditor responsibility and training in fraud detection. Journal of Accounting and Management Information Systems, 16(4), 434-454. doi:10.24818/jamis.2017.04001
Ehiametalor, E. T. (1990). Business and economics education: principles and methods. Evans Brothers Nigeria Publishers.
Franco Ruiz, R. (2020). Las teorías del control y evaluación organizacional independiente. Revista Criterio Libre, 18(32), 71–107. http://search.ebscohost.com/login.aspx?direct=true&db=fua&AN=148333520&site=eds-live
Furiady, O., & Kurnia, R. (2015). The Effect of Work Experiences, Competency, Motivation, Accountability and Objectivity towards Audit Quality. Procedia - Social and Behavioral Sciences, 211, 328–335. https://doi.org/10.1016/j.sbspro.2015.11.042
Ghasemi, A., & Zahediasl, S. (2012). Normality Tests for Statistical Analysis: A Guide for Non-Statisticians. International Journal of Endocrinology and Metabolism, 10(2), 486–489. http://doi.org/10.5812/ijem.3505
Gobierno Nacional. (2005). Decreto 1970. Diario Oficial. http://www.suinjuriscol.gov.co/viewDocument.asp?ruta=Decretos/1379025
González-Castro, R., López-Valeiras, E., & Gómez-Conde, J. (2014). Sistemas de Contabilidad y Control de Gestión y género: una revisión bibliográfica. Contabilidad y Negocios, 9(18), 27–40.
Halbouni, S. S., Obeid, N., & Garbou, A. (2016). Corporate governance and information technology in fraud prevention and detection. Managerial Auditing Journal.
Izzalqurny, T. R., Subroto, B., & Ghofar, A. (2019). Relationship between Financial Ratio and Financial Statement Fraud Risk Moderated by Auditor Quality. International Journal of Research in Business and Social Science, 8(4), 34–43. https://doi.org/http://dx.doi.org/10.20525/ijrbs.v8i4.281
Jaffar, N., Salleh, A., Iskandar, T. M., & Haron, H. (2008). The effect of the external auditors’ ability to assess fraud risk on their ability to detect the likelihood of fraud. International Journal of Management Perspectives, 1(1), 49-70.
Kabuye, F., Nkundabanyanga, S. K., Opiso, J., & Nakabuye, Z. (2017). Internal audit organisational status, competencies, activities and fraud management in the financial services sector. Managerial Auditing Journal, 32(9), 924–944. https://doi.org/10.1108/MAJ-09-2016-1452
Krummeck, S. (2000). The role of ethics in fraud prevention: a practitioner’s perspective. Business Ethics: A European Review, 9(4), 268–272. https://doi.org/10.1111/1467-8608.00200
LaNota.com. (2019). No Title. https://sellfy.com/lanota/p/0vvs/
Lascano, MD (2018). Gestión del riesgo organizacional de fraude y el rol de Auditoría Interna. Contabilidad y Negocios, 13 (25), 57-69. doi: 10.18800 / contabilidad.201801.004
Ljubisavljević, S. (2000). Uloga eksternog revizora u okruženju [The Role of the External Auditor in Environment]. Faculty of Economics-University of Kragujevac, Kragujevac.
Mohamed, N., Sanusi, Z. M., Hasnan, N. H. B., Heang, L. T., & Isa, Y. M. (2019). Analysis on Competencies and Situational Support on Performance Effectiveness of Forensic Accountants in Malaysia. International Journal of Business & Management Science, 9(2).
Okoro, J. (2014). Assessment of Accounting Competencies Possessed by Postgraduate University Business Education Students to Handle Entrepreneurship Business Challenges in Nigeria. World Journal of Education, 4(1), 1–10. https://eric.ed.gov/contentdelivery/servlet/ERICServlet?accno=EJ1158714
Oviedo, H. C., & Arias, A. C. (2005). Aproximación al uso del coeficiente alfa de Cronbach. Revista colombiana de psiquiatría, 34(4), 572-580.
Pedrosa, I., Juarros-Basterretxea, J., Robles-Fernández, A., Basteiro, J., & García-Cueto, E. (2015). Pruebas de bondad de ajuste en distribuciones simétricas,¿ qué estadístico utilizar?. Universitas psychologica, 14(1), 245-254.
Rezaee, Z. (2005). Causes, consequences, and deterence of financial statement fraud. Critical Perspectives on Accounting, 16(3), 277–298. https://doi.org/10.1016/S1045-2354(03)00072-8
Salas-Ávila, J. A., & Reyes-Maldonado, N. M. (2015). Modelo propuesto para la detección de fraudes por parte de los auditores internos basado en las Normas Internacionales de Auditoría / Fraud Detection Proposed Model by Internal Auditors Based on International Standards on Auditing / Modelo proposto para d. Cuadernos de Contabilidad, 16(42), 579–623. https://doi.org/10.11144/Javeriana.cc16-42.mpdf
Santander Ramírez, V., & Contreras Ramírez, R. (2013). Credibilidad De Los Auditores Externos Post Caso La Polar. UCMaule - Revista Académica de La Universidad Católica Del Maule, 44, 67–88.
Sulaiman, N. A., Shahimi, S., & Nashtar Singh, R. K. (2019). People and audit process attributes of audit quality: Evidence from Malaysia. Management & Accounting Review (MAR), 18(2), 47-80.
Sulistyowati, L., & Supriyati. (2015). The effect of experience, competence, independence, and professionalism of auditors on fraud detection. Indonesian Accounting Review, 5(1), 95–110. https://doi.org/10.14414/tiar.v5i1.494
Sunyoto, E., Djaali, D., & Akbar, M. (2017). The effect of functional training, integrity, competency and organizational commitment of quality audit in the audit board of republic indonesia. IJHCM: International Journal of Human Capital Management, 1(1), 76–94. https://doi.org/10.21009/IJHCM.01.01.07
Susanto, H., Azhar Azis, H., Mulyani, S., & Sukmadilaga, C. (2019). The level of fraud detection affected by auditor competency using digital forensic support. Utopia y Praxis Latinoamericana, (24), 252–267
Tahmasbi, M., Rahmani, H., & Bakhtiarvand, M. Z. (2020). The Effect of Audit Quality on the Market Value of Cash Holdings: Evidence from Tehran Stock Exchange and IACPA. International Journal of Management, Accounting & Economics, 7(10), 611–621. https://doi.org/10.5281/zenodo.4274939
Varchuk, O. A., & Grabovenko, O. A. (2016). Internal control and internal audit: definition, similarities and differences. Экономика: Реалии Времени, 1(23).
Wuerges, A. F. E., & Borba, J. A. (2011). Accounting Fraud: an estimation of detection probability. Available at SSRN 1954783.
Zambrano, Y. (2015). La auditoría forense: un mecanismo para detectar el fraude de estados financieros en Colombia. Inquietud Empresarial. Vol. XV (2), 13-36.
Published
2021-01-01
How to Cite
Angulo Páez, Y. Z., Ochoa Larrota, Ángela V., & Bohórquez Forero, N. del P. (2021). Competence of external auditors in Colombia and situations that allow fraud detection. Colombian Journal of Accounting - ASFACOP, 9(17), 17-38. https://doi.org/10.56241/asf.v9n17.196
Section
Control, auditing, governance and fiscal review
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