The Effect of whistleblowing Hotline, Surprise audit, and the independence of Audit Committee on internal Fraud: Facts of Banking Companies in Indonesia

Banking and other of finance institutions was one of the sectorsthat has lots of fraud. Indonesian Financial Services Authority discover the most substantial fraud in the banking involves employ or customers. Therefore, banking needs a mechanism that can limit that actions. This study aims to analyze the effect of whistleblowing hotline on internal Fraud, the effect of surprise audits on internal fraud, and the effect of the independence of the audit committee on internal fraud. Furthermore, this research analyze the effect of whistleblowing hotline, surprise audits, and the independence of the audit committee against internal fraud simultaneously. Paper is based on the data from annual reports and Good Corporate Governance (GCG) company banks report listed on the Indonesia Stock Exchange in the period of time throughout twelve years 2008-2018. Samples were tested by multivariate regression analysis. The Results showed that the whistleblowing hotline significantly affect negative against internal fraud. Surprise audit has a significant negative effect on internal fraud. The independence of the audit committee hotline has a significant negative effect on internal fraud. In simultaneous whistleblowing hotline, surprise audits, and the independence of the committee audit affect negatively against internal fraud.