The effect of big data competencies and tone at the top on internal auditors fraud detection effectiveness

• Published in: DECISION SCIENCE LETTERS
• Main Authors: Dewi, Novy Silvia; Said, Jamaliah; Faiza, Sharifah Nazatul; Julian, Lufti
• Format: Article
• Language: English
• Published: GROWING SCIENCE 2024
• Subjects: Operations Research & Management Science
• Online Access: https://www-webofscience-com.uitm.idm.oclc.org/wos/woscc/full-record/WOS:001127071800001
• ISSN: 1929-5804; 1929-5812
• DOI: 10.5267/dsl.2023.10.005

Financial reports provide information about a company's assets, liabilities, equity, income, expenses and cash flow. This information can be used by various parties such as investors, creditors, government and management to make business decisions and assess company performance. Companies in obtaining good financial reports need to detect fraudulent financial statements first. Financial statement fraud can be detrimental to investors and creditors because it gives a wrong picture of a company's financial performance. This study aims to examine the effect of big data competence and the tone of the top internal auditors on the detection of financial statement fraud, as well as to mediate the effect of big data competence on the detection of financial statement fraud through self-efficacy. This research uses a sample of 183 respondents who are internal auditors in companies in Indonesia. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results of the study show that big data competence has no significant effect on the detection of financial statement fraud, but has a positive and significant effect on self-efficacy. In addition, the internal auditor's tone of the top also has a positive and significant effect on the detection of financial statement fraud. Finally, self-efficacy partially mediates the relationship between big data competence and fraud detection of financial statements. This research provides important implications for practitioners and decision makers in developing internal auditor competence in the field of big data and paying attention to tone of the top as an important factor in detecting fraudulent financial statements. In addition, this research also contributes to strengthening the understanding of the relationship between big data competence, tone of the top, self-efficacy, and fraud detection of financial statements in the Indonesian context.