MANAGEMENT AND ACCOUNTING REVIEW, VOLUME 25 NO. 2, AUGUST 2026
The FDP Mirror Framework for Financial Statement Fraud Risk Assessment: Integrating Deterrence and Analytical Detection
Koenta Adji Koerniawan1*, Hosam Alden Riyadh1,2, Galuh Tresna Murti1, Arfive Gandhi3, Nungki Selviandro3, Asrarul Rahman1,4 and Ferdio Ghifary Fidhien5,6
1Accounting Study Program, School of Economics and Business, Telkom University, West Java, Indonesia
2Accounting and Finance Department, Faculty of Business, Curtin University, Malaysia
3Software Engineering Study Program, School of Informatics, Telkom University, West Java, Indonesia
4Audit Board of the Republic of Indonesia, Jakarta, Indonesia
5Distance Learning Study Program Master of Management, School of Economics and Business, Telkom University, West Java, Indonesia
6School of Accounting, Universiti Utara Malaysia, Kedah, Malaysia
ABSTRACT
Financial statement fraud remains a persistent challenge for auditors, particularly in environments with weak deterrence and complex financial disclosures. Auditing standards such as ISA 240 require auditors to integrate professional scepticism, fraud risk assessment, and analytical procedures. However, conventional audit approaches often treat behavioural deterrence assessment and analytical detection as separate considerations. This study empirically evaluates the Fraud Deterrence Propeller Mirror (FDP Mirror) as an applied audit framework that integrates deterrence maturity assessment with analytical procedures for financial statement fraud risk assessment. Using data from corporate entities and public sector organisations in Indonesia, PLS-SEM is employed to assess deterrence maturity, while logistic regression and machine learning techniques are used to evaluate fraud detection performance. The findings indicate stronger deterrence maturity is associated with improved governance integrity, while hybrid analytical models combining financial indicators, anomaly testing, and narrative analysis demonstrate stronger fraud detection capability than conventional assessment approaches. The results suggest that fraud risk assessment is strengthened when behavioural governance conditions and analytical evidence are evaluated jointly. This study contributes to auditing literature by extending the practical interpretation of ISA 240 and enhancing the integration of behavioural governance assessment and analytical procedures in fraud risk assessment.
Keywords:
Fraud Deterrence
Fraud Risk Assessment
Analytical Procedures
Financial Statement Fraud
ISA 240
FDP Mirror
*Corresponding Author.
E-mail address: koentaadji@telkomuniversity.ac.id