Competent and Independent Auditors but Cannot Detect Fraud!! Do They Exercise Professional Skepticism?
摘要
Auditors’ ability to detect fraud has become highly debated especially after the recent financial scandals and increased fraudulent actions. This study aims to examine the impact of three auditor attributes (competence, independence, ethics) on professional skepticism and fraud detection, and to investigate the mediating role of professional skepticism in the relationships between these three auditor attributes and fraud detection. The data of this research was collected through questionnaires completed by 320 external auditors employed by audit firms located in Lebanon during the Lebanese economic and financial crisis. The Smart-PLS3 was adopted to conduct the statistical analysis. The outcomes show that auditors’ competence and independence have no direct effect on fraud detection. Nevertheless, the two variables indirectly affect fraud detection through professional skepticism. The results also reveal that auditors’ ethics has both direct and indirect influence on fraud detection, whereas professional skepticism partially mediates the relationship between the two variables. This study contributes to the limited literature that examines the effect of auditor attributes on professional skepticism and fraud detection in developing countries. Besides, according to the researcher’s knowledge, the current research is the first that investigate the mediating role of professional skepticism in the relationships between the three auditor attributes (competence, independence, ethics) and fraud detection. Based on the study’s results, the researcher suggests some practical implications to assess auditors in detecting fraud within the increase of fraudulent actions and financial scandals.