Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

CORRUPTION AWARENESS AMONG ACCOUNTING

STUDENTS: EFFECT OF AUDITING COURSE, FRAUD
SPECIFIC TRAINING AND PROFESSIONAL SKEPTICISM
Ashari 1, Muhamad Masruri 2 and Nafi Inayati Zahro 3
1
Universitas Muria Kudus
ashari_umk@yahoo.com
2
Universitas Muria Kudus
m_ruri56@yahoo.com
3
Universitas Muria Kudus
nafi_umk@yahoo.co.id

Abstract:

The Objectives of Higher education is not only to increase knowledge but also for encouraging students’
awareness about society around of them. This society awareness is one of the affective domain in taxonomy
of educational objective (Krathwohl : 1964). Accounting curriculum was included ethical and auditing
course, where it is proposed will increasing student’ corruption awareness compared with other major. In
other side, auditing course is also important methods in creating professional skepticism where auditing
standard required its as a major trait in evaluating evidence during audit engagement. The purpose of this
study is to investigate whether any relationship of accounting education especially auditing course, fraud
specific training, and professional skepticism on corruption awareness as ethical sensitivity indicators of
Rest’s four component model.
A total of 350 students participated in experiment coming from one public university and one private
university in Central Java Province of Indonesia. There where 100 students from accounting department who
are not yet involved in professional ethics and auditing course, 100 students has been involved in
professional ethics and auditing course, 100 student involved in fraud training, and 50 students from law
department as a control group. The corruption awareness are measured by perception of corruption
existence and attitude toward anti corruption program.
The result is indicated that there are difference between accounting student pre audit course and after audit
course in aspect perception of corruption existence (0,05). For attitude to support anti corruption program
there is any difference between pre and after auditing course ( 0.012) but not for professional skepticism
(0.979). Analysis of control group and pre auditing course respondent, indicated that there are not any
differences in aspect perception of corruption existence (0.92) and professional skepticism (0.997), but not
for attitude to support anti corruption program (0.034). After fraud specific training conducted, there are any
differences between after audit course and after fraud specific training in aspect of perception of corruption
existence (F = 0.000), support to anti corruption program (0.001) and professional skepticism (0.034).
Correlation between professional skepticism with perception of corruption existence is 0.219 (0.00),
professional skepticism and attitude to support anti corruption program is 0.275 (0.00), and perception of
corruption existence and attitude to support anti corruption program is 0.240 (0.00).
The findings of this study provide additional evidence to support Rest’s Theory with more comprehensive
cognitive model of ethical decision and suggest balanced model for individual ethical development. The
practical benefit of this study is providing guidance for accounting education in developing undergraduate
accounting curriculum where fraud and forensic are usually included in audit course may separated as an
independent course.
Keywords: Corruption awareness, Perception of corruption existence, Attitude to Support Anti
Corruption Program, Fraud specific training, Professional skepticism

1. Introduction
International comparative studies have reported that Indonesia has suffered significantly from corruption.
Transparency International (TI) for example reported that Indonesia’ corruption perception index (CPI) was
3.2 and rated as a country more afflicted with corruption (TII 2012). This corruption index score placed
Indonesia in rank 118th together with Argentina, Benin, Surname, and others developing countries. Among
ASEAN Countries, Indonesia’ rank is placed below Singapore (9.2), Brunei (5.2), Malaysia (4.3) and
 Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

Thailand (3.4). Another corruption index is Bribery Index (0-10 where higher score showing higher bribery)
were scored (7.1) for Indonesia parallel with corruption perception index (Kompas 2011). Although the
corruption index was increase compared with prior year (2010 index was 2.80), but this condition is
unfavorable because Indonesian Government has targeting that CPI is 5.5. This indicators also showing that
there are not improvement in anti corruption program and Indonesia is still having higher risk of fraud and
corruption.
For Indonesian context where corruption index was high, education has important role for improving
those condition by creating awareness about fraud and corruption. Increasing fraud and corruption
awareness among society especially student, not only supporting government anti corruption program, but
also resulting well tomorrow generation. Recently Indonesia’ Anti Corruption Commission (KPK) has
developed a course that will implement as anti corruption course in higher education. In other side,
previously accounting curriculum also had been included ethical and auditing course, were it’s expected
will increase student’ corruption awareness compared as with other major (Ghoshal 2003, Merritt 2003). The
importance of accounting education in creating fraud and corruption awareness is parallel with expectation
of auditing service user. The audit literature has suggested that auditor must sensitive to “red flag” (SAS No.
53), ethical value (SAS No. 78), and fraud (SAS No. 82). Accounting graduates entering traditional roles in
profession such as positions in corporate accounting and internal or external auditing, are expected to have
greater understanding of fraud and corruption (Kranacher et al 2008), especially in Indonesia situation where
rated as more afflicted with corruption. Accounting education must response this condition by developing a
curriculum that providing materials that increasing capabilities of graduates in response to change in
environment of accounting profession especially in higher risk of fraud and corruption (Previts 1991, Titard
et al 2004). Many
Although it is widely acknowledged the importance of audit course and fraud specific training in
increasing fraud detection skill, but only a little research have conducted to investigate the effect of those
courses on corruption awareness (Corless 2009, Rezaee & Burton 1997). Also many of universities
integrated forensic accounting material in auditing course, although it is more benefit to separate fraud and
forensic accounting. One of the important attribute of auditor in performing audit engagement is
professional skepticism . With higher professional skepticism, auditor will more sensitive to fraud especially
in higher risk of fraud (Payne & Ramsay 2005). Unfortunately, for our knowledge, only little research had
been conducted in investigating the relationship between professional skepticism and ethical sensitivity.
This research try to investigate the effect of auditing course and fraud specific training to corruption
awareness, and also relationship between corruption awareness and professional skepticism. For theoretical
consideration, this research providing and evidence about how ethical sensitivity particularly corruption
awareness developed among individuals. The practical benefit of this research is by providing evidence in
developing auditing and fraud audit curriculum and how it will implemented during undergraduates study.

2. Hypothesis Development
2.1. Corruption Awareness and Ethical Sensitivity
Awareness is almost of cognitive behavior in bottom rung of affective domain (Krathwohl et al 1964).
The essential behavior to be measured at the level of awareness is whether the student is conscious with
something whether he is aware of the existence of some person, phenomenon, event if state of affairs
(Krathwohl et al 1964). Because auditing profession is demanding more accounting graduate and more fraud
skilled graduates (Arens and Elder 2006), accounting education must emphasize its curriculum on how to
create fraud and corruption awareness among student as a basis for increasing capabilities of fraud detection
skill of auditor (Rezaee & Burton 1997).
Rest (1986) has been developed a cognitive model for individual decision making include moral
sensitivity, moral judgment, moral motivation and moral character. Ethical sensitivity is the ability to
identify the salient aspect of ethical dilemma that involves ability to see the implication of action outside
one’s environment within the context of broader social picture. Within the ethical decision making literature,
 Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

ethical sensitivity is generally measured as dependent variables (Dickerson 2009). The numerous
independent variables include: cognitive moral development, ethical orientation, professional commitment,
organizational commitment, professional skepticism, cultural environment, professional code of conduct, and
personal characteristics (i.e. age, education, training and experience). Bases on those literatures, we
investigate the effect of auditing course, fraud specific training, and professional skepticism on corruption
awareness as a proxy of ethical sensitiveness.

2.2. Auditing Course

The change in audit environment after the passage of Sarbanes-Oxley Acts, has increasing demand for
the accounting student with greater understanding of risk assessment including business and fraud risk
(Arens and Elder 2006). The increasing number of fraud around organization and corruption in government
sectors, make audit engagements have higher risk. Accounting curriculum must response this condition by
strengthening its graduate with capabilities in preventing and detecting fraud and corruption. Increasing
capabilities in preventing and detecting fraud and corruption, requires sensitiveness to fraud and corruption
occurrences opportunity. Fraud and corruption sensitiveness is important attribute of auditor in performing
audit task especially in higher fraud risk environment. Auditor must caught the horns of the risk of fraud
corruption in the environment by need to be sensitive to the conditions under which fraudulent financial
reporting may flourish and be effective in the recognizing the occurrence of those conditions. With this
increasing demand of capability in risk assessment of fraud, accounting education must integrate the risk
assessment skill on auditing course. Integrating the risk assessment onto auditing course, not only increasing
skill of risk assessment but also will increasing sensitiveness to fraud risk. A research conducted by Achilles
(2006) showing that accounting student accounting at final grade, assessed the possibility that fraud was in
progress at a higher level than the management students. Based on this literature, we proposed that audit
course will increase corruption awareness of accounting student.
H1: Auditing course has positive effect on corruption awareness.

2.3. Fraud Training

Fraud specific training programs to educate about fraud prevention is one of the effective methods in
creating fraud and corruption awareness (Corless 2009, Peterson 2004, Viton 2003). Fraud specific training
is acknowledged as one of the effective method used by accounting firm in pre engagement to improve
consideration of fraud (Brazel, Carpenter and Jenkins 2010). Because of the increasing increased awareness
and concern about fraud, attention to fraud and forensic accounting training especially fraud investigation,
may well be one component of a more functional accounting education. Based on those evidence, we
proposed that fraud training program will increasing corruption awareness among accounting student.
H2: Fraud training has positive effect on corruption awareness.

2.4. Professional Skepticism

Professional skepticism is widely acknowledged as importance attribute of professional auditor. SAS No
1, mandates that auditor must use professional skepticism due to professional care. These requirements also
supported with other audit statement, (AU 230.07, PCAOB 2007 AS no 5.4, PCAOB 2008). According to
Statement on Auditing Standard (SAS) no 1 (AICPA 1997b), “an auditor must have questioning mind and
critically assess the evidence obtained”. Hurt (2010) has been developing a measure of professional
skepticism which constructed from six dimension as listed below.
 Questioning mind.
 Suspension of judgment
 Search for Knowledge
 Interpersonal understanding
 Autonomy
 Self Esteem
Hurtt’ professional skepticism scales was designed to measure an individual’s level of trait professional
skepticism. Hurtt (2007) also showing that there is a relation between trait of skeptical people and various
 Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

skeptical behavior. Research in professional skepticism (Payne & Ramsay 2005) showing that professional
skepticism has relationship with risk assessment. Makkawi and Shick (2003) argue greater skepticism and
better risk assessment of management integrity can lead to a more effective and efficient audit. Because there
is any relation between risk assessment and ethical sensitivity and professional skepticism, we propose that
there professional skepticism also has a relationship with corruption awareness as a proxy of ethical
sensitivity.
H3: professional skepticism has a positive relationship effect on corruption awareness.

2.5. Methodology
There 350 students participated in experimental procedure comprised 100 accounting students who not
yet involved in auditing course, 100 accounting students who have been included in auditing course but not
for fraud specific training, 100 accounting students who have been involved in auditing course and fraud
specific training and 50 law students as a control group. The participant coming from Universitas Muria
Kudus and Universitas Diponegoro, both are located in Central Java Province, Indonesia. The participant are
randomly selected from those both universities. The experimental procedure is conducted by sending
questionnaire to accounting students before they involved in auditing course, after they involved in auditing
course, and after they involved in fraud specific training. The participants from law department are sent
questionnaires on the same time with participant from accounting students who have been involved in fraud
specific training. Corruption awareness scales are measured by adopting corruption awareness scale
developed by Bowman & Gilligan (2007) with adjustment for Indonesian context. The corruption awareness
was divided onto two dimensions that are perception of corruption existence and attitude to support anti
corruption programs. Perception of corruption existence are comprising 7 questions witch scaled form 1 to 6.
Attitude to support anti corruption program scales are comprising 2 question scaled from 1 to 6. The
professional skepticism scale is measured by Hurtt’ Scale of Professional Skepticism developed by Hurtt
(2010) which questions answer were ranging from 1 to 6.

3. Results
The descriptive analysis can be described as following table 1.
Table 1
Descriptive Analysis
N Mean Std Dev Min Max
1
Cab 100 31.67 2.58 24 38
2
SACb 100 8.92 1.32 4 10
3
PSb 100 131.15 10.23 103 157
CAaa4 100 32.61 2.41 26 39
5
SACaa 100 9.27 0.71 5 10
6
PSaa 100 131.7 9.46 109 159
7
CAaf 100 33.95 2.09 28 39
SACaf8 100 9.64 0.56 8 10
9
PAaf 100 135.38 9.43 95 157
10
CAc 50 31.24 2.67 23 36

1
Perception of corruption existence before auditing course and fraud training.
2
Attitude to support anti corruption program before auditing course and fraud training.
3
Professional Skepticism before auditing course and fraud training.
4
Perception of corruption existence after auditing course
5
Attitude to support anti corruption program after auditing course
6
Professional Skepticism after auditing course
7
Perception of corruption existence after Fraud training
8
Attitude to support anti corruption program after Fraud training
9
Professional Skepticism after Fraud training
10
Perception of corruption existence of control group
 Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

SACc11 50 8.24 1.42 5 10

12
PSc 50 130.24 10.33 103 151

An ANOVA analysis was performed in investigating effect of auditing course and fraud specific training
to corruption awareness. Because, preliminary analysis showing that variances are not equal, we move to
Tamhane’s T2 Post Hoc Analysis. The result is can be described as table 2 follows.
Table 2
Post Hoc ANOVA Analysis
Comparation Mean Difference Sig
Corruption Existence

Before Audit Course After Audit Course -0.94 0.05

Perception of

Before Audit Course After Fraud Training -2.28 0.00

Before Audit Course Control Group 0.43 0.92
After Audit Course After Fraud Training -1.34 0.00
After Audit Course Control Group 1.37 0.02
After Fraud Training Control Group 2.71 0.00
Support Toward Anti

Before Audit Course After Audit Course -0.35 0.12

Before Audit Course After Fraud Training -0.72 0.00
Corruption

Before Audit Course Control Group 0.68 0.03

After Audit Course After Fraud Training -0.37 0.00
After Audit Course Control Group 1.03 0.00
After Fraud Training Control Group 1.40 0.00
A correlation analysis was conducted in order to investigate the relationship between professional
skepticism and corruption awareness. Based on those analysis, it is results is correlation between
professional skepticism and corruption awareness is 0,219 (0.00) and correlation between professional
skepticism and support toward anti corruption program is 0.275(0.00). The additional analysis also
conducted to investigate the effect of audit course on professional skepticism (0.999), effect of fraud specific
training on professional skepticism (0.038), which showing that current auditing course do not increasing
professional skepticism significantly comparing with fraud specific training. Also there is low correlation
between perception of corruption existence and attitude to support anti corruption program.

4. Conclusion
Based on analysis, the result supported the Rest’ theory of moral development especially ethical
sensitiveness among accounting students. According to Rest’ model, ethical sensitivity is interpretation by a
person in particular situation in terms of which action are possible, who would be affected by each course of
action and how interested parties would regard such effects on their welfare. This research also support
previous research that corruption awareness as a proxy of ethical sensitivity are affected by ethical education
and fraud and corruption training. Accounting education can benefited from this study by evaluating auditing
curriculum , and designed a curriculum that extending material on fraud and corruption materials in order to
increasing awareness of fraud and corruption. Future studies should investigate the effect of anti corruption
course (as it’s implemented in 2013 in Indonesia’ Higher Education) on fraud and corruption awareness
among accounting student and other majors. Future research also may investigate the relationship between
corruption awareness and ethical decision i.e. intention to be whistleblower or audit judgment especially in
high risk of fraud and corruption.

5. References

11
Attitude to support anti corruption program of control group
12
Professional Skepticism of control group
 Proceedings of the International Mathematics, Accounting and Finance Conference 2013 (IMAFC 2013)

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