The Effectiveness of Fraud Prevention and Detection Methods at Universities in Indonesia
Some cases of corruption have taken place in several universities in Indonesia. To prevent and handle the cases, internal auditors play pivotal roles in detecting and preventing fraud. Therefore, effective methods to detect and prevent fraud are needed. The methods are expected to set the appropriate measures to detect and prevent fraud effectively. This research proposed a question how the internal auditors perceive the effectiveness of fraud detection and prevention methods. The research aimed to conduct a descriptive analysis towards the auditor's fraud-related knowledge and examine the internal auditor's perception towards the effectiveness of fraud detection and prevention methods. The objects of this research were internal auditors who worked at universities in Indonesia where the respondents were randomly selected. This study used a series of questionnaires to gather the information from the previously-surveyed respondents. The questionnaires in this study refered to the previous research conducted by Bierstaker, et al., (2006). The results of this research reveal that the most effective fraud detection and prevention procedures are operational audits, internal control review and improvement, cash reviews, code of sanctions against suppliers/contractors and ethics officers. Meanwhile, five most ineffective of fraud prevention and detection procedures are virus protection, financial rasio, firewalls, filtering software, and organizational use of forensic accountants. The results of this study differs from the previous research conducted by Bierstaker, et al., (2006), which suggests that the most effective procedure for fraud detection and prevention is the use of information technology (IT).
Keyword: Fraud Prevention, Fraud Detection, Universities, Indonesia
JEL Classification: K4