Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors

In accordance with ISA 240, it is the responsibility of external auditors to obtain reasonable assurance that financial statements are free from material misstatement, whether caused by fraud or error. Recently, the auditing profession in Malaysia has been significantly challenged by the explosion o...

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Published in:Journal of Risk and Financial Management
Main Author: Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
Format: Article
Language:English
Published: MDPI 2022
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85149563457&doi=10.3390%2fjrfm15110536&partnerID=40&md5=e93782714124b7c35568f11b9c7ba238
id 2-s2.0-85149563457
spelling 2-s2.0-85149563457
Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
2022
Journal of Risk and Financial Management
15
11
10.3390/jrfm15110536
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85149563457&doi=10.3390%2fjrfm15110536&partnerID=40&md5=e93782714124b7c35568f11b9c7ba238
In accordance with ISA 240, it is the responsibility of external auditors to obtain reasonable assurance that financial statements are free from material misstatement, whether caused by fraud or error. Recently, the auditing profession in Malaysia has been significantly challenged by the explosion of fraud cases and by auditors’ failure to determine the “true and fair view” of the financial statement. This incident has tarnished the reputation of the audit profession. The effectiveness of the external auditor function, especially when related to fraud risk assessment, is commonly called into question. Hence, this study aims to assess individual factors (personality traits, digital technology skills, and competency) that may contribute to the effectiveness of fraud risk assessment among external auditors. A total of 455 questionnaires were distributed to external auditors, and a total of 150 (32.96%) responses were received. Data were thoroughly analyzed using Smart-PLS 4.0. This study found that digital technology skills contribute to the effectiveness of fraud risk assessment, whereas personality traits and competency do not. The findings implied that an effective technique of fraud risk assessment among external auditors requires digital technology skills. This study contributes to the literature by confirming the critical role of digital technology skills in enhancing the effectiveness of fraud risk assessments. © 2022 by the authors.
MDPI
19118074
English
Article
All Open Access; Gold Open Access
author Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
spellingShingle Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
author_facet Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
author_sort Mat Ridzuan N.I.; Said J.; Razali F.M.; Abdul Manan D.I.; Sulaiman N.
title Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
title_short Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
title_full Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
title_fullStr Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
title_full_unstemmed Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
title_sort Examining the Role of Personality Traits, Digital Technology Skills and Competency on the Effectiveness of Fraud Risk Assessment among External Auditors
publishDate 2022
container_title Journal of Risk and Financial Management
container_volume 15
container_issue 11
doi_str_mv 10.3390/jrfm15110536
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85149563457&doi=10.3390%2fjrfm15110536&partnerID=40&md5=e93782714124b7c35568f11b9c7ba238
description In accordance with ISA 240, it is the responsibility of external auditors to obtain reasonable assurance that financial statements are free from material misstatement, whether caused by fraud or error. Recently, the auditing profession in Malaysia has been significantly challenged by the explosion of fraud cases and by auditors’ failure to determine the “true and fair view” of the financial statement. This incident has tarnished the reputation of the audit profession. The effectiveness of the external auditor function, especially when related to fraud risk assessment, is commonly called into question. Hence, this study aims to assess individual factors (personality traits, digital technology skills, and competency) that may contribute to the effectiveness of fraud risk assessment among external auditors. A total of 455 questionnaires were distributed to external auditors, and a total of 150 (32.96%) responses were received. Data were thoroughly analyzed using Smart-PLS 4.0. This study found that digital technology skills contribute to the effectiveness of fraud risk assessment, whereas personality traits and competency do not. The findings implied that an effective technique of fraud risk assessment among external auditors requires digital technology skills. This study contributes to the literature by confirming the critical role of digital technology skills in enhancing the effectiveness of fraud risk assessments. © 2022 by the authors.
publisher MDPI
issn 19118074
language English
format Article
accesstype All Open Access; Gold Open Access
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