ACCOUNTABILITY AND FRAUD TYPE EFFECTS ON FRAUD DETECTION RESPONSIBILITY

Indonesia is the 20th ranked countries and territories of the most corrupt in the public sector, according to data reported by Corruption Perception Index (CPI) in 2013. Another form of fraud cases related to the procurement of goods and services. Lack of responsibility and ability of the Government Internal Supervisory Apparatus (GISA) or Aparat Pengawas Intern Pemerintah (APIP) in detecting fraud is one of root causes of that condition. Indonesian Government Internal Auditors Association (IGIAA) or Asosiasi Auditor Internal Pemerintah Indonesia (AAIPI) reported that 94 percent of APIP is not able to detect fraud. However, Government Regulation No. 79 of 2005 stated that the Government Internal Supervisory Apparatus (APIP) has duty to control the government affairs or considered as an internal auditor in accordance with its functions and authority (Presiden Republik Indonesia 2005). This study intends to develop these issues by examining that matters relating to the responsibility of internal auditors to detect fraud in Indonesian government. Internal audit standards do not prescribe different detection responsibilities for fraudulent financial reporting (FFR), misappropriation of assets (MoA), and corruption (CRR) that have a direct and material effect on the financial statements. However, the research literature provided evidence and suggested that perceived responsibility of professional for fraud detection differ across fraud types (Dezoort and Harrison 2008, ACFE 2008, KPMG 2003 and 2006).