Unqualified Opinions and Integrity Flaws: A Systematic Examination of Fraud Patterns and Investigative Approaches
Keywords:
Unqualified Audit Opinion, Public Sector Fraud, Forensic Accounting, Investigative Audit, Local Government, Systematic Review.Abstract
An Unqualified Audit Opinions are widely regarded as indicators of transparency and sound financial management in the public sector. However, numerous corruption cases involving local governments that previously received unqualified opinions suggest a disconnect between audit status and actual integrity. This study conducts a Systematic Literature Review (SLR) using the PRISMA protocol to examine the relationship between unqualified audit opinions, the types of fraud committed in local government financial management, and the investigative techniques used to uncover them. A total of 52 peer-reviewed articles published between 2019 and 2024 were analyzed thematically. The findings reveal that unqualified opinions tend to reflect administrative compliance rather than substantive financial integrity. Fraud schemes such as capital expenditure mark-ups, fictitious procurement, and grant misappropriation were commonly reported in regions with unqualified audit status. Investigative techniques including forensic accounting, e-procurement monitoring, whistleblowing systems, and data analytics have proven more effective in detecting fraud than conventional audits. The study concludes that unqualified audit opinions should not be used in isolation as indicators of clean governance. Instead, an integrated audit framework, combining financial, performance, and investigative audits, is needed to enhance fraud detection and accountability in the public sector.
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