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The vulnerability of the service industry to fraud incidence, ineffectiveness of internal controls and the occurrence of some cases of fraud to the company, is a major factor that encourages researchers to conduct fraud risk assessment, especially in procurement business processes and operating expenditure. The purpose of this research is to identi...
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... This study fills a research gap related to fraud risk assessment in tax collection activities, including the ethical extraction of potential revenues. This study also answers Alfurqan (2017), who identified fraud risks in other business processes and designed an internal audit division structure. Furthermore, we contribute a more general implementation of fraud risk assessment in the government tax sector. ...
... This study used data validity techniques, including trustworthiness. As stated by Krisyantono (2006) and Alfurqan (2017), the validity of trustworthiness data is a test of truth and honesty of a subject. The answers were also analyzed and were validated against the results of FGD and other data sources. ...
... This study concluded that the internal audit unit was structurally responsible to the DGT and functionally responsible to the supervisory/commissioner committee (Alfurqan, 2017). This relates to the need for research to design a good and independent internal audit division structure. ...
This study identifies potential fraud schemes, evaluates risk controls, and discusses anti-fraud strategies using a case study
of the Directorate General of Taxes in Indonesia, conducted by exploring phenomena related to fraud risk in the scope of
business processes. By using fraud triangle theory and rational choice theory, this research extends the literature by
providing evidence that fraud can be prevented by increasing the probability of fraud-scheme detection. This study
examines potential tax revenue activities rarely examined in the literature. Our results conclude that, out of 25 fraud
scenarios, five were categorized as high risk and 11 were medium. This study discusses appropriate mitigation measures of
residual fraud risks at the organizational level. Furthermore, we evaluate relevant anti-fraud strategies, both implemented
and non-implemented.
... This study filled out the research gap related to fraud risk assessment in tax audits activities which have been rarely performed by previous studies. This study also answered Alfurqan (2017), related to the suggested research to identify fraud risks in other business processes and design the internal audit division structure. In addition, this study was expected to contribute as a reference of literature study on the implementation of fraud risk assessment in tax sector government agencies and as reference to future studies. ...
... In conducting a risk assessment, one should consider the scheme/fraud scenarios that might occur in the organization to obtain an appropriate anti fraud guideline for the organization. As stated by COSO in Alfurqan (2017), illustrates the Fraud Risk Assessment as follows: ...
... Research conducted by Alfurqan (2017) regarding the fraud risk assessment implemented in the procurement business process resulted in 23 identified fraud schemes that were useful in designing relevant anti fraud strategies. In other study, a fraud scheme integrated in the fraud risk assessment can help better audit planning (Gao, Srivastava, & Mock, 2008). ...
p> The emergence of a variety of fraud schemes, ineffective internal controls, and the number of fraud cases that occur in the taxation sector, encourage researches related to fraud risk assessment, especially in tax audit activi ties . This study aimed to identify potential fraud schemes risks, evaluate risk controls and discuss anti-fraud strategies using a case study at the Directorate General of Taxes in Indonesia. With a sequential mix method approach through a combination of quantitative and qualitative research, and by using rational choice theory, this research extends the literature of previous studies by providing evidence that fraud can be prevented by increasing the probability to detect fraud scheme. This study fills out the gaps related to fraud risk assessment research in the tax audit process which have been rarely performed in the literatures.
The results concluded that of the 20 fraud scenarios identified, there were 7 fraud scenarios categorized as high level of residual fraud risk, 9 fraud scenarios at the medium level, and the rest at low levels. This study discussed appropriate controls to mitigate the residual fraud risk to be maintained at the level of organizational risk appetite. In addition, this study also discussed anti fraud strategies that are relevant to the organization, through evaluating anti-fraud strategies that have been previously implemented and anti-fraud strategies that have never been implemented</em
