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Article
Publication date: 2 May 2017

Intiyas Utami, Indra Wijaya Kusuma, Gudono Gudono and Supriyadi Supriyadi

The purpose of this paper is to test the existence of the halo effect caused by the presentation of information scope (holistic/specific), which can eventually lead to an…

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Abstract

Purpose

The purpose of this paper is to test the existence of the halo effect caused by the presentation of information scope (holistic/specific), which can eventually lead to an inaccurate risk assessment of material misstatement. Empirical evidence is provided to demonstrate that methods of knowledge acquisition (explanatory feedback and self-explanation) are able to mitigate the halo effect.

Design/methodology/approach

This study used an experimental research, which focused on control and experimental groups in order to determine if the halo effect caused by the information scope (holistic/specific) can be mitigated via the explanatory feedback or self-explanation method.

Findings

It was found that auditors who received information from the holistic scope tend to experience the halo effect and eventually, their risk assessments of material misstatement also became less accurate when compared to auditors who received information from the specific scope. The explanatory feedback was found to be effective in mitigating the halo effect. However, the self-explanation knowledge acquisition method was not reliable in mitigating the halo effect.

Research limitations/implications

This research use self-explanation with a manual technique but, in practice, most auditors use audit tools based on computer. Experimental setting with computer to self-explanation cannot held because there is limitation of seminar setting. This research used individual decision; in practice most of audit decision with discussion in audit team.

Practical implications

CPA firms can use explanatory feedback, which comes in the form of managers’ review as a form of knowledge acquisition method as a mitigation strategy for the halo effect.

Social implications

The social implication of this research is the halo effect that can influence the decision in many aspects. Individuals must increase their professional values with many trainings that are useful to mitigating the halo effect.

Originality/value

The outcome of this paper was derived from the first accounting study that relied on learning methods as a mitigation strategy for the halo effect. In other words, this study used explanatory feedback and self-explanation as methods to test the halo effect. Previous literature on mitigating the halo effect had used audit experiences, implying that CPA firms’ intervention was unnecessary. Moreover, such study periods had been much longer, thereby, deteriorating the effectiveness of the research. Previous studies had only used the learning method to increase human capital quality and this was not related to any method as a mean to mitigate individual bias, for example, the halo effect, and an issue that was covered by this study.

Details

Asian Review of Accounting, vol. 25 no. 2
Type: Research Article
ISSN: 1321-7348

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Article
Publication date: 30 September 2019

Intiyas Utami, Sutarto Wijono, Suzy Noviyanti and Nafsiah Mohamed

This study aims to test the causality of fraud diamond factors (pressure, rationalization, opportunity and capability) and Machiavellian personality on fraud intention.

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Abstract

Purpose

This study aims to test the causality of fraud diamond factors (pressure, rationalization, opportunity and capability) and Machiavellian personality on fraud intention.

Design/methodology/approach

This study used a 2 × 2 × 2 × 2 web-based laboratory experiment. Our subjects are accounting students from various Indonesian universities as surrogates of an accountant of a firm. We analyzed the data using the independent t-test.

Findings

This study provides empirical evidence that the four aspects of fraud diamond, namely pressure, opportunity, rationalization and capability cause fraud intention. Besides, high Machiavellian attitude also causes high fraud intention.

Research limitations/implications

This study is a Web-based one that is subject to the instability of internet access. Specifically, some subjects had to redo the completion of their experimental modules because of the unstable internet connection.

Practical implications

The results of this study suggest organizations to pay attention to their members’ behavioral aspects that can be the symptoms of fraud and to design whistleblowing systems to prevent fraud intention as an opportunity factor within organizations.

Social implications

Social implications are to develop the appropriate whistleblowing system to mitigate the fraud.

Originality/value

The novelty of this study lies in combining the experimental test of fraud diamond (internal and external factors) and Machiavellianism as a personality factor as the determinants of fraud intention. Further, another novelty lies in the use of the antifraud system as a proxy of opportunity that has not yet extensively investigated by previous studies.

Details

International Journal of Ethics and Systems, vol. 35 no. 4
Type: Research Article
ISSN: 2514-9369

Keywords

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Article
Publication date: 15 January 2020

Hanrin Damas Triantoro, Intiyas Utami and Corina Joseph

The objective of this study is: 1) to examine the effect of whistleblowing system and fraud intention, 2) the impact of Machiavellianism personality and fraud intention, 3) the…

1983

Abstract

Purpose

The objective of this study is: 1) to examine the effect of whistleblowing system and fraud intention, 2) the impact of Machiavellianism personality and fraud intention, 3) the interaction effect between whistleblowing system, Machiavellianism personality and fraud intention.

Design/methodology/approach

This study carried out a 2 × 2 between-subjects true experimental research design, using the Web-based tool. The subjects were 75 accounting undergraduate students from seven universities in Indonesia who were enrolled for auditing courses.

Findings

This study shows that fraud intention increases with the absence of a whistleblowing system. This research also shows that higher Machiavellianism increases individual fraud intention.

Research limitations/implications

The poor internet connection contributes to obstruction in accessing the experimental website. Few participants were required to repeat the completion of the experimental module.

Practical implications

This study contributes to developing the whistleblowing system to mitigate fraud intention in organizations considering the personality trait of the individual.

Social implications

This study suggests the importance of a better understanding of fraud mechanisms to enhance the awareness of the whistleblowing system.

Originality/value

This study uses the whistleblowing system as a proxy for an opportunity in the fraud triangle concept. There is limited empirical research conducted on examining the whistleblowing system to fraud intention and the interaction of Machiavellian personality and whistleblowing system to fraud intention.

Details

Journal of Financial Crime, vol. 27 no. 1
Type: Research Article
ISSN: 1359-0790

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