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…
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.
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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.
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.
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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…
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.