Enhancing Fraud Detection: The Role of Effective Audits in Financial Statement Integrity

Adam Al Subarkah; Amri Amrulloh

doi:10.69725/raida.v1i2.158

Authors

Adam Al Subarkah a. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia
Amri Amrulloh b. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

DOI:

https://doi.org/10.69725/raida.v1i2.158

Keywords:

Fraud Detection, Audit Technology, AI, Machine Learning, Blockchain

Abstract

Objective: Explore how the implementation of advanced audit technologies can enhance the detection of fraudulent financial statements with a key focus on new technologies such as artificial intelligence (AI), machine learning (ML), and blockchain and that have the power to change the way audits are conducted.
Methods: Systematic analysis through literature review of relevant studies published between 2019 and 2024 on the application, effectiveness, and challenges of AI and ML, blockchain technology as well as other audit innovations in detecting and preventing fraud. The review integrates both theoretical and empirical results across multiple sectors.
Results: Findings reveal that the integration of AI and blockchain into auditing practices significantly enhances the detection of financial fraud, offering improved accuracy, transparency, and efficiency. AI-driven models and ML algorithms enable auditors to identify anomalies and patterns that indicate fraudulent activity, while blockchain provides an immutable ledger for ensuring data integrity. However, challenges remain, such as algorithmic bias, high implementation costs, and the need for greater integration with existing audit frameworks.
Novelty: This review presents a novel synthesis of advanced audit technologies, exploring their real-world applications and highlighting the gaps between technological capabilities and current audit practices. It offers a forward-looking perspective on the evolving role of technology in fraud detection and the future of auditing.
Research Implications: The study emphasizes the need for continuous research into adaptive and flexible audit models that can incorporate new technologies as fraud schemes evolve. Additionally, it stresses the importance of auditor training to enhance the effectiveness of these technologies, ensuring their proper integration into routine audit practices

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Author Biographies

Adam Al Subarkah, a. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

Adam Al Subarkah

Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia
Amri Amrulloh, b. Department of Accounting, Madiun State Polytechnic, Madiun, Indonesia

Amri Amrulloh, S.E, M.Ak

Lecture

Department of Accounting, Madiun State Polytechnic, Madiun, Indonesi

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