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1
Sudarman, Aniqotunnafiah, and Masruri. "The Composition of Independent Board of Commissioner and Number of Board of Commissioner Meeting Towards Fraudulence of Financial Report (Empirical Study at Public Company Listed at Indonesia Stock Exchange in 2011-2017)." International Journal of Financial Research 10, no. 4 (May 6, 2019): 96. http://dx.doi.org/10.5430/ijfr.v10n4p96.
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This study aims to obtain empirical evidence about the effect of corporate governance mechanisms on fraudulent financial reporting. The variables of corporate governance used are independent board composition, frequency of board commissioner meetings, and external auditor quality as moderating variables between the influences of independent board composition, number of board of commissioners meetings against fraudulent financial reporting. The population of this study was public companies listed on the Indonesia Stock Exchange in 2011 - 2017. The total samples of this study were 76 companies, consist of 38 companies reported committing fraudulently financial statements and 38 companies that did not cheat financial statements. Data analysis was carried out by descriptive analysis, crosstab and hypothesis testing using the logistic regression method. The results of this study indicate the composition of the independent board of commissioners and the frequency of board of commissioners meetings has a significant and negative effect on the fraudulent financial report. Also, the quality of external auditors can strengthen the influence of the composition of the independent board of commissioners and the number of board of commissioners meetings on the fraudulent financial reporting.
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Gillett, Peter R., and Nancy Uddin. "CFO Intentions of Fraudulent Financial Reporting." AUDITING: A Journal of Practice & Theory 24, no. 1 (May 1, 2005): 55–75. http://dx.doi.org/10.2308/aud.2005.24.1.55.
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This study investigates factors indicating CFO intentions of fraudulent financial reporting. Structural equation modeling is used to analyze survey data obtained from 139 CFOs. We find that an extended reasoned action model fits the data well and explains CFO intentions to report fraudulently. More specifically, we find that CFOs of large companies are more likely to report fraudulently in the financial statements and that compensation structure is not a good indicator of CFO intentions to report fraudulently. Informal and formal audit methods for assessing management attitudes toward fraudulent reporting, such as questionnaires and automated decision aids, are recommended since they offer the best opportunity to improve significantly auditors' ability to predict fraudulent financial reporting. Implications for future research and practice development are considered.
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Iskandar, Deni, Viola Paramitha, and Diana Frederica. "FRAUDULENT FINANCIAL STATEMENTS IN MANUFACTURING COMPANIES." Jurnal Riset Akuntansi 14, no. 1 (April 28, 2022): 20–36. http://dx.doi.org/10.34010/jra.v14i1.5499.
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Fraudulent financial statement has a bad impact on users of financial statements, especially for investors who provide funds to companies. Investors need to be observant in analyzing the company's financial statements. Therefore, it is necessary to know several factors that influence companies to commit fraudulent financial statements. This study aims to examine the effect of external pressure, financial targets and the ineffective monitoring on fraudulent financial statement at manufacturing companies listed on the Indonesia Stock Exchange. This research is a quantitative research. The sampling technique in this study used a purposive sampling method based on the criteria given. Accordingly, there were 35 companies as samples in 3 consecutive years. The data analysis technique in this study used logistic regression analysis with the help of the IMB SPSS application. The results of the study found that: (1) external pressure had a significant negative effect on fraudulent financial statement, (2) financial targets had a significant negative effect on fraudulent financial statement, and (3) ineffective monitoring had no effect on fraudulent financial statement. This research can contribute to the Public Accounting Firm and investors and potential investors to pay attention to the leverage ratio and ROA in external pressure variables and financial targets in a company's financial statements.
Keywords: Fraudulent Financial Statement, External Pressure, Financial Targets, Ineffective Monitoring.
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Et. al., Dalila Binti Abu Bakar,. "Impact Of Financial Information Fraudulence To Financial Distress In Malaysia." Turkish Journal of Computer and Mathematics Education (TURCOMAT) 12, no. 6 (April 10, 2021): 896–914. http://dx.doi.org/10.17762/turcomat.v12i6.2367.
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We investigate if Malaysian listed companies engaged in financial information fraud during financial distressed after two years of US subprime mortgage crisis.We also investigate the impact of financial information fraudulence in bankruptcy prediction and misclassification errors. This study used consumer product companies listed on the main board and the timeframe is from 2011 till 2015. The Altman Z score indicates that 37 out of 133 Malaysian consumer product companies are financially distressed. Meanwhile, the M score shows that 28 out of 224observations are engaged in financial information fraudulence. However, these results are relatively low because the samples are taken from the main board and fraudulence in their financial statements might be done in lower magnitude in order to avoid sanctions by the Security Exchange Commission. Logistic regression was used to measure the predicting accuracy. The result of the overall accuracy percentage slightly improved by 0.9 after eliminating fraudulent companies. The confusion matrix result i.e. before and after the removal of financial information fraudulent companies, the misclassification errors especially type one has improved. This finding satisfied objective three, whereby one of the reasons for the deterioration in financial distress prediction is due to the upward bias of financial information fraudulence.Governments, monitoring bodies, and all those involved in an insolvency process would benefit from this study.
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Ferdinand, Rian, and Setyarini Santosa. "Factors that Influence Fraudulent Financial Statements in Retail Companies - Indonesia." JAAF (Journal of Applied Accounting and Finance) 2, no. 2 (January 21, 2019): 99. http://dx.doi.org/10.33021/jaaf.v2i2.548.
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Fraudulent financial statements is an intentionally misstatement of the financial statements. There are several factors affected the evidence of fraudulent financial statements report. The objective of this research is to investigate the influence of audit committee characteristics, managerial ownership, leverage, and liquidity toward the fraudulent financial statements report in retail companies listed on the Indonesia Stock Exchange in the period of 2012-2016. Using regression, the result shows that audit committee characteristic and leverage do not have significant effect on the fraudulent financial statements report, while managerial ownership and liquidity have. Simultaneously, audit committee characteristics, managerial ownership, leverage and liquidity have significant influence to the fraudulent financial statement report.
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Hendra, Bima Mahatma, and Arief Himmawan Dwi Nugroho. "Pengaruh Financial Stability, Financial Target, Ineffective Monitoring Dan Capability Terhadap Kecurangan Laporan Keuangan Pada Perusahaan Yang Terdaftar Dalam Indeks LQ-45 Bei Periode 2013 Sampai Dengan 2015." JRAK (Jurnal Riset Akuntansi dan Bisnis) 8, no. 1 (January 10, 2022): 89–97. http://dx.doi.org/10.38204/jrak.v8i1.726.
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This study aims to empirically prove the effect of financial stability, financial targets, ineffective monitoring, and capability on fraudulent financial reporting in LQ-45 companies in Indonesia. This research uses a population of LQ-45 companies that have gone public and are listed on the IDX during the 2013-2015 period which were taken through a purposive sampling of 22 companies. The conclusion of this study is that financial stability has a significant positive effect on detecting fraudulent financial reporting; Financial target dan ineffective monitoring have no significant positive effect in detecting fraudulent financial reporting; Capability have no significant negative effect in detecting fraudulent financial reporting.
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Budiandru, Budiandru, Zakkiandri Zakkiandri, Basyiruddin Nur, Yeni Elfiza Abbas, and Ilza Febrina. "DETECTING FRAUD FINANCIAL STATEMENTS IN MANUFACTURING COMPANIES INDONESIA." Jemasi: Jurnal Ekonomi Manajemen dan Akuntansi 18, no. 2 (December 27, 2022): 201–13. http://dx.doi.org/10.35449/jemasi.v18i2.544.
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The purpose of this research is toand analyze the influence of the four elements infraud triangle that is pressure, opportunity, and rationalization. to detect the possibility of fraudulent financial statements (financial statement fraud). The four elements will be divided into 5 variables, specifically financial stability,external pressure, ineffective monitoring, nature of industry, and change in auditors.to find the possibility of fraudulent financial statements as measured by the M Score modelin manufacturing companiesin the 2018-2021 period. The results of the study show that of the six variables used in the study, there is one (1) variable, namely the nature of the industry which has a significant effect on the possibility of fraudulent financial statements. While the other five (5) variables financial targets, external pressure, ineffective monitoring, and auditor changes do not affect the likelihood of fraudulent accounts. The contribution of the results of this our riset that manufacturing companies in that year are likely to be more concerned or careful the nature of industry that has a significant impact, this will affect the sustainability of the business in the future.
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Tommy and Fenny Marietza. "Pengaruh Kesulitan Keuangan, Kondisi Industri Dan Pergantian Auditor Terhadap Kecurangan Laporan Keuangan." JRB-Jurnal Riset Bisnis 5, no. 2 (April 30, 2022): 154–67. http://dx.doi.org/10.35814/jrb.v5i2.2802.
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This study aims to examine the effect financial distress, nature of industry and change in auditor on fraudulent financial reporting. The population in this study were all manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019. The sample in this study is manufacturing companies that have reported the company's annual report. The analytical tool used in this study is SPSS version 25. The results showed that there was a negative influence between financial distress and fraudulent financial reporting and found no influence between nature of industry and change in auditor on fraudulent financial reporting. This research provides information about the worse the company’s financial condition can be the higher probability of the company committing fraudulent financial reporting. So that it becomes a consideration for companies in making policies to avoid the occurrence of fraudulent financial reporting.
Keywords : Financial Distress, Nature of Industry, Change in Auditor, Fraudulent Financial Reporting
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Sanjaya, Irvan, Suyanto Suyanto, and Gustin Padwa Sari. "PENGARUH KEPEMILIKAN SAHAM EKSEKUTIF, CEO EDUCATION DAN PERGANTIAN AUDITOR TERHADAP KECURANGAN LAPORAN KEUANGAN PADA PERUSAHAAN BUMN (STUDI EMPIRIS PADA PERUSAHAAN BUMN YANG TERDAFTAR DI BEI)." Jurnal Akuntansi AKTIVA 2, no. 1 (October 13, 2021): 87–94. http://dx.doi.org/10.24127/akuntansi.v2i1.902.
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This study aimed to examine the factors that influenced the fraudulent financial statements of state-owned companies (BUMN) on the Indonesia Stock Exchange. The factors that influenced the fraudulent financial statements of state-owned companies on the Indonesia Stock Exchange were executive share ownership, CEO education and auditor changes. This study used a quantitative approach. The population in this study were 25 state-owned companies in the Indonesia Stock Exchange. The sampling technique used purposive sampling method with certain criteria in order to obtain a sample of 24 state-owned companies. The data in this study were analyzed using the help of IBM SPSS version 25 by testing multiple linear regression analysis. The results of this study indicated that share ownership partially affected the fraudulent financial statements of BUMN companies. Meanwhile, the results of CEO education and replacement of auditors partially had no effect on fraudulent financial statements of BUMN companies. As well as executive share ownership, CEO education and replacement of auditors simultaneously affected the fraud in the financial statements of BUMN companies.
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I Kadek Pebri Artana, I Putu Gede Diatmika, and Anantawikrama Tungga Atmadja. "The Influence of Auditor Opinion, Company Size, External Pressure on Fraud Financial Reporting with Industrial Conditions as Intervening Variables." International Journal of Social Science and Business 7, no. 1 (January 22, 2023): 208–15. http://dx.doi.org/10.23887/ijssb.v7i1.57651.
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All manufacturing companies are competing to give the impression that people will not choose similar alternative products other than the company itself, so the company must have a strategy and characteristics that make the company increasingly known to the wider community. This study aims to analyze the influence of auditor opinion, company size, and external pressure on fraudulent financial reporting, by considering industry conditions as a mediating variable in manufacturing companies listed on the Indonesia Stock Exchange during the 2017-2021 period. The study population was 25 companies and the study sample consisted of 22 companies, with targeted non-probability sampling techniques. The results showed that auditors' opinions negatively affected fraudulent financial reporting, while company size negatively impacted fraudulent financial reporting. Meanwhile, external pressures have had a positive impact on fraudulent financial reporting. In addition, industry conditions can mediate the relationship between auditors' judgments and fraudulent financial reporting. However, the current state of the industry shows no link between company size and fraudulent financial reporting. The implications of this study emphasize the importance of proper internal supervision and control by companies to prevent and overcome the risk of financial reporting fraud, as well as the importance of strict and credible auditor supervision, and more careful attention to industry conditions that affect the level of financial reporting fraud.
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Sutisna, Ujang, Helmi Yazid, and Tri Lestari. "The effect of fraud diamond and financial stability on fraudulent financial statement with anti fraud as a moderating variable." Fair Value: Jurnal Ilmiah Akuntansi dan Keuangan 4, no. 12 (July 25, 2022): 5368–78. http://dx.doi.org/10.32670/fairvalue.v4i12.1783.
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The purpose of this study was to determine the effect of fraud diamond and financial stability on fraudulent financial statement with anti-fraud as a moderating variables in banking companies listed on the Indonesia stock exchange 2016-2020. The sample used in this study is 28 companies. The data used is secondary data. The data analysis technique used is quantitative. Structural Equation Modeling is used as an analysis with the help of Smart SPSS software version 25. The results in this study indicate that pressure has no effect on fraudulent financial statements, opportunity has no effect on fraudulent financial statements, rationalization has effect on fraudulent financial statements, ability has no effect on fraudulent financial statements, financial stability has effect on fraudulent financial statements, anti-fraud has not moderate the relationship between pressure on fraudulent financial statements, Anti- fraud has not moderate the relationship between opportunity and fraudulent financial statements, Anti-fraud moderates the relationship between rationalization and fraudulent financial statements, Anti-fraud does not moderate the relationship between ability and fraudulent financial statements, Anti-fraud moderates the relationship between financial stability and fraudulent financial statements.
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Fathmaningrum, Erni Suryandari, and Gupita Anggarani. "Fraud Pentagon and Fraudulent Financial Reporting: Evidence from Manufacturing Companies in Indonesia and Malaysia." Journal of Accounting and Investment 22, no. 3 (November 2, 2021): 625–46. http://dx.doi.org/10.18196/jai.v22i3.12538.
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Research aims: This study aims to examine the influence of fraud pentagon concept on fraudulent financial reporting.Design/Methodology/Approach: This study’s population was manufacturingcompanies listed in Indonesia Stock Exchange and Malaysia Stock Exchange. 120 manufacturing companies in Indonesia and 118 manufacturing companies in Malaysia were involved as samples. The data analysis method used in this study is multiple linear regression.Research findings: The results showed that financial target, financial stability, quality of external auditor, external pressure, and nature of industry variables influenced fraudulent financial reporting. In contrast, personal financial need, ineffective monitoring, change in auditor, change in director, and frequent number of CEO’s pictures variables had no effect on fraudulent financial reporting. For Indonesia, it was found that financial target, financial stability, and the quality of external auditor influenced fraudulent financial reporting. While, in Malaysia, the results showed that financial stability, external pressure, and nature of industry variables influenced fraudulent financial reporting in Malaysia.Theoretical contribution/Originality: These results support the financial target and quality of external auditor hypothesis in Indonesia, financial stability hypothesis in Indonesia and Malaysia, external pressure and nature of industry hypotheses in Malaysia, stating that fraud pentagon factors affect fraudulent financial reporting. It is also proved that there are different levels of fraudulent financial reporting in Indonesia and Malaysia. Indonesia has fraudulent financial reporting cases higher than Malaysia.
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Pakdelan, Saeed, Alireza Azar Brahman, and Gholamhossein Heydari Filabadi. "Investigating the Relationship between Transactions with Affiliates and Fraudulent Reporting by Explaining the Moderating Role of Corporate Governance Companies Listed in Tehran Stock Exchange." Journal of Economics, Finance and Accounting Studies 4, no. 4 (December 3, 2022): 125–44. http://dx.doi.org/10.32996/jefas.2022.4.4.16.
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Transactions with related parties have become a common way for fraudulent reporting due to the hiddenness and simplicity of manipulation, and the traditional methods of quantitative analysis have failed to discover the complex relationships of these transactions. Therefore, the detection of fraudulent reporting has attracted the attention of researchers and legislators. This research seeks to examine and test the relationship between transactions with related parties and fraudulent reporting by explaining the role of corporate governance moderation in companies listed on the Tehran Stock Exchange. The statistical population of this research includes 146 companies admitted to the Tehran Stock Exchange during a period of 9 years from 2012 to 2021. Multiple linear regression method has been used to test the research hypotheses. The results of the research showed that there is a positive and significant relationship between transactions with related parties and fraudulent reporting. In fact, the level of fraudulent reporting is higher in companies with related party transactions and fraudulent reporting. Also, the research results showed that there is a negative and significant relationship between corporate governance and fraudulent reporting. In other words, in companies where corporate governance is observed, the level of fraudulent reporting is lower. Examining the effect of corporate governance indicators on fraudulent reporting using unusual transactions with related parties shows that the independence of the board of directors and institutional shareholders has no significant effect on the relationship between transactions with related parties and fraudulent reporting, but the type of auditor has a direct and significant effect on the relationship between transactions with related parties and fraudulent reporting. Therefore, internal and external auditors, regulatory bodies, board of directors, and other professionals should identify this type of fraud and emphasize the importance of prevention approaches to reduce the possibility of committing corporate fraud. Regulators should also pay more attention to loan-based related party transactions and the total number of related party transactions.
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Achmad, Tarmizi, Dian Indriana Hapsari, and Imang Dapit Pamungkas. "Analysis of Fraud Pentagon Theory to Detecting Fraudulent Financial Reporting using F-Score Model in State-Owned Companies Indonesia." WSEAS TRANSACTIONS ON BUSINESS AND ECONOMICS 19 (January 10, 2022): 124–33. http://dx.doi.org/10.37394/23207.2022.19.13.
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This study aims to analyze the effect of the fraud pentagon theory consisting of external pressure, effective monitoring, rationalization, capability, and arrogance on fraudulent financial reporting. This study uses the F-score model to see the potential for fraudulent financial reporting. The data used in this study are secondary data from the company's annual reports. The population of this research is state-owned companies listed on the IDX (Indonesia Stock Exchange) during 2015-2019. The sampling technique used purposive sampling so that the sample obtained is 180 samples. The analysis technique used is logistic regression analysis with S.P.S.S. versions 20.0. The findings show that external pressure and rationalization have a significant effect on fraudulent financial reporting. Meanwhile, effective monitoring, capability, and arrogance have no considerable impact on fraudulent financial reporting. The results of this study indicate the occurrence of fraudulent financial reporting in state-owned companies listed on the IDX if the related state-owned companies experience external pressure and have rationalizations to commit fraud.
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Sudaryono, Driya. "APPLICATION FRAUD PENTAGON FOR DETECTING SYMPTOMS OF SHORTFUL FINANCIAL STATEMENTS." International Journal of Contemporary Accounting 3, no. 1 (July 23, 2021): 25. http://dx.doi.org/10.25105/ijca.v3i1.7166.
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The purpose of this study is to determine the effect of fraud pentagon toward fraudulent financial reporting sympton using modified Jones model to the mining companies. The method of sampling used purposive sampling method. The sample consists of 30 companies was listed on the Indonesia Stock Exchange in 2013-2016. The result of this research concluded that pressure which proxied by financial target and financial stability has a positive and significant effect on fraudulent financial reporting. Opportunity has a negative and significant effect on fraudulent financial reporting. Rationalization, capability, and arrogance has not significant effect on fraudulent financial reporting.
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Suryaningsih, Rosita, and Febryanti Simon. "Earnings Management and Fraudulent Financial Reporting." GATR Accounting and Finance Review 4, no. 2 (July 31, 2019): 50–55. http://dx.doi.org/10.35609/afr.2019.4.2(3).
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Objective – The objective of this research is to obtain empirical evidence about the effect of real earnings management that is proxied by abnormal Cash Flow from operating and discretionary expenses towards fraudulent financial reporting. Methodology/Technique – The objects in this research are companies listed on the Indonesian Stock Exchange (idx) between 2011 and 2015 comprised of companies that have engaged in fraudulent activities as well as those that have not, to enable a comparison to be made. The companies that have engaged in fraudulent financial reporting were obtained from a list issued by the Financial Services Authority (OJK), being the agency that oversees the capital market in Indonesia. The sampling is conducted using purposive sampling. Secondary data is used, and the hypotheses are testing using logistic regression analysis. Findings – The results of this research show that: (1) Real Earning Management proxied by Abnormal Cash Flow from operating activities (CFO) have a significant effect towards Fraudulent Financial Reporting (FFR), (2) Real Earning Management proxied by Abnormal Discretionary Expenses does not have an effect on Fraudulent Financial Reporting (FFR) and (3) Real Earning Management that is proxied by Abnormal Cash Flow from operating (CFO) and Abnormal Discretionary Expenses have a simultaneous and significant effect on Fraudulent Financial Reporting (FFR). Novelty – Based on these findings, this research provides insight to companies to enable them to give greater attention to abnormal cash flow from operating activities due to the effect this has on companies that are suspected of committing irregularities in its operational activities. This is important because fraudulent reporting can erode investor’s confidence and thereby reduce investment in the company. Type of Paper: Empirical. Keywords: Abnormal Cash Flow; Abnormal Discretionary Expenses; Financial Services Authority (OJK); Fraudulent Financial Reporting; Real Earning Management. Reference to this paper should be made as follows: Suryaningsih, R; Simonb F; 2019. Earnings Management and Fraudulent Financial Reporting, Acc. Fin. Review 4 (2): 50 – 55 https://doi.org/10.35609/afr.2019.4.2(3) JEL Classification: G40, G41, G49.
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Nur apandi, R. Nelly. "PENGARUH AUDIT TENURE TERHADAP FRAUDULENT FINANCIAL REPORTING DENGAN PENDEKATAN AKRUAL DISKRESIONER." Jurnal Riset Akuntansi dan Keuangan 1, no. 1 (April 27, 2013): 8. http://dx.doi.org/10.17509/jrak.v1i1.6569.
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The purpose of this research was to describe audit tenure, fraudulent fianncial repoting, and the effect audit tenure on fraudulent fianncial reporting with discretionary accrual approach. This research used 83 samples of companies listed in Indonesia Stock Exchange period 2009-2010. Samples was collected by used puposive sample method. The hypothesis tested by simple linear regression analysis. The results of this study indicate that audit tenure for three consecutive years (2009-2011) there were 16 companies that have changed auditors every year, 36 companies that perform audit engagements with the same auditor for 2 years, and 31 companies that perform audit engagements with the same auditor for 3 years.While, the results of descriptive analysis showed that the fraudulent financial reporting has a minimum value is -0.7940, maximum values is 0.3670, and an average of fraudulent financial reporting at 83 companies listed in the Indonesia Stock Exchange is -0.010622. Financial reporting fraud rate indicates a value of less than zero (-0.010622), which indicates that there are indications of fraud in the form of earnings management with minimazation income, which lowers the level of income reported earnings. The results of hypothesis showed that the audit tenure has no effect on fraudulent financial reporting.
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Anan, Edy. "Determinants Fraudulent Financial Statements Using the S.C.O.R.E Model on Infrastructure Sector Companies in Indonesia." Ilomata International Journal of Tax and Accounting 2, no. 2 (April 29, 2021): 113–21. http://dx.doi.org/10.52728/ijtc.v2i2.212.
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The infrastructure sector is the top priority of the Indonesian government's development from 2014 to 2019. Indonesia Corruption Watch (ICW) data shows that the number of corruption cases in infrastructure projects has increased during 2015-2018. The value of losses in corruption cases in infrastructure projects is estimated at 1.1 trillion rupiah. The results of various studies on the factors affecting fraudulent financial statements show inconsistent results. This research aims to determine the impact of the stimulus, ability, opportunity, rationalization, and self on companies' fraudulent financial statements in the infrastructure industry listed on the Indonesian Stock Exchange (IDX). This study uses quantitative research methods. Sampling techniques use purposeful sampling, that is, hypothesis testing using logistic regression analysis models. The results showed that the stimulus measures had a positive and significant impact on fraudulent financial statements. Competence, opportunity, and rationalization have a positive and insignificant impact on fraudulent financial statements. The impact of self on fraudulent financial statements is negligible. The research supports the agency theory that management can commit fraudulent financial statements and achieve the Company's financial goals.
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Hashim, Hafiza Aishah, Zalailah Salleh, Izzati Shuhaimi, and Nurul Ain Najwa Ismail. "The risk of financial fraud: a management perspective." Journal of Financial Crime 27, no. 4 (June 19, 2020): 1143–59. http://dx.doi.org/10.1108/jfc-04-2020-0062.
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Purpose A number of highly publicised scandals such as Enron, Lehman Brothers, Parmalat, Satyam, Toshiba and 1MDB (to name a few) have heightened the awareness of the effects of fraudulent financial reporting. While enormous measures have been taken to curb the fraudulent activities among large and small businesses, the issues are still alarming worldwide. Thus, this study aims to explore the extent to which the prevalence of fraud risk in state-controlled companies and to enhance understanding of the underlying reasons of the fraudulent activities. Design/methodology/approach As this study is a descriptive and exploratory in nature, an exploratory case study method was used in four state-controlled companies. Using the fraud triangle theory to underpin this study, the qualitative face-to-face interviews were carried out with top management of the companies. Findings The study reveals a high risk of fraud occurrence at state-controlled companies that involve dealing with various suppliers, governments, customers and shareholders, even when standard operating procedures and rules and regulation are in place. The apparent reason for this phenomenon is attributed to not only opportunities but also incentives and rationalisations in engaging fraudulent activities. Originality/value As there are relatively few qualitative studies conducted in this area specifically among Malaysian state-controlled companies, this study extends the fraud literature by examining risk exposure and reasons underlying the fraudulent activities. The findings demonstrate that to a certain extent, the fraud triangle theory explains the motivations behind the fraudulent activities. The finding from this study is relevant to regulators, investors, companies and academicians in understanding, preventing and combating fraud.
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Hendang Tanusdjaja, Clarissa Felicia,. "PENGARUH FAKTOR-FAKTOR TERTENTU TERHADAP FRAUDULENT FINANCIAL STATEMENT PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2016-2018." Jurnal Paradigma Akuntansi 2, no. 4 (September 26, 2020): 1745. http://dx.doi.org/10.24912/jpa.v2i4.9370.
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The purpose of this research is to examine the influence of asset turnover ratio, financial stability, financial targets and profitability towards fraudulent financial statements in manufacturing companies listed on Indonesia Stock Exchange in periode of 2016-2018. This research is conducted by using 20 samples of manufacturing companies listed on Indonesia Stock Exchange. Data analysis was performed with descriptive statistics and hypothesis testing of regression method using SPSS Statistics 25. The results of this research shows that asset turnover ratio and financial stability have a significant negative effect towards fraudulent financial statements. Financial targets has significant positive effect towards fraudulent financial statements while profitability has positive effect on fraudulent financial statements.
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Nurhakim, Agus Lukman, and Puji Harto. "Kecurangan, BUMN Fraud Pentagon: Deteksi Kecurangan Laporan Keuangan Pada Badan Usaha Milik Negara." E-Jurnal Akuntansi 33, no. 2 (February 26, 2023): 311. http://dx.doi.org/10.24843/eja.2023.v33.i02.p03.
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Fraudulent financial statements, especially in State-Owned Enterprises (BUMN) companies, is a criminal act of corruption with a very large level of financial losses. The research aims to test the pentagon fraud theory in detecting fraudulent financial statements in state-owned companies. The research sample is 20 state-owned companies from 2018-2021 which are listed on the IDX. This study took samples of SOEs with various industrial segments, besides that this study used a measure of government ownership as a proxy for rationalization, this proxy is still very rarely used. Data analysis in this study used logit regression analysis. The research results show that only financial stability and replacement of directors have a significant effect on the possibility of fraudulent financial statements, while other variables in the Fraud Pentagon have no effect.
Keywords: Fraud Pentagon; Fraudulent Financial Statement; Soes
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Ariyanto, Dodik, I. Made Gilang Jhuniantara, Ni Made Dwi Ratnadi, I. Gusti Ayu Made Asri Dwija Putri, and Ayu Aryista Dewi. "Detecting fraudulent financial statements in pharmaceutical companies: Fraud pentagon theory perspective." Accounting 7, no. 7 (2021): 1611–20. http://dx.doi.org/10.5267/j.ac.2021.5.009.
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A fraudulent financial statement is an issue that continues to be discussed as a form of deviation from corporate governance. Covid-19 pandemic has also demanded management to uphold the company's performance to have a good public image. Thus, the present study sets out to scrutinize the fraud pentagon theory on fraudulent financial statements. Each element is not able to be tested directly. However, there are proxies. The pressure element is proxied as a personal financial need. The opportunity is becoming the nature of industry. Each of the qualities of the external auditors as well as the change of directors propose rationalization and competence. The frequent number of CEO’s appearances in photos is a proxy of arrogance. The testing was carried out on the registered pharmaceutical companies of the Indonesian stock exchange in the span of the 2015-2019 period. The samples were selected by the means of sampling technique which is purposive. Data are scrutinized by the means of panel data regression. The analysis results show that the characteristics of the industry positively affects financial reports which are fraudulent. Changing top management positions such as directors can be an indication of financial reports which are fraudulent. The personal financial need variables, the caliber of external auditors and the quantity of CEO’s appearance in photos pose no effects on the fraudulent financial statements of the Indonesian's pharmaceutical companies.
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Yanto, Alif Faruqi Febri. "DETERMINANTS OF FRAUDULENT FINANCIAL REPORTING IN MINING COMPANIES: PENTAGON THEORY FRAUD PERSPECTIVE." Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA) 7, no. 1 (April 25, 2023): 843–59. http://dx.doi.org/10.31955/mea.v7i1.2937.
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The purpose of this research is to find empirical evidence the influence of the fraud pentagon which consists of pressure, opportunity, rationalization, competence and arrogance on Fraudulent Financial Statements. The research method used in this study is multivariate analysis using the Generalized Structured Component Analysis tool. The research population is manufacturing companies in the mining sector listed on the Indonesia Stock Exchange for the 2017-2021 period with a total sample of 60 companies. This study shows that pressure, opportunity and competence have a significant effect on fraudulent financial statements, while rationalization and arrogance have no significant effect on fraudulent financial statements.
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Dewi, Krisna, and Indah Anisykurlillah. "Analysis of the Effect of Fraud Pentagon Factors on Fraudulent Financial Statement with Audit Committee as Moderating Variable." Accounting Analysis Journal 10, no. 1 (March 9, 2021): 39–46. http://dx.doi.org/10.15294/aaj.v10i1.44520.
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This study aims to analyze the effect of fraud pentagon on fraudulent financial statements with audit committee as moderating variable. The population of this study was the property, real estate, and construction companies listed on the Indonesia Stock Exchange during 2016-2018. The sampling technique used purposive sampling and obtained 52 companies with 156 units of analysis. The data were analyzed using logistic regression analysis by IBM SPSS Ver.26. The results showed that company growth had a positive effect on fraudulent financial statements. Meanwhile, the effectiveness of supervision, quality of external auditors, the experience of directors, and CEO duality did not affect fraudulent financial statements. Audit committee significantly moderated the effect of company growth, the effectiveness of supervision, and the experience of directors on fraudulent financial statements. However, audit committee did not moderate the effect of quality of external auditors and CEO duality on fraudulent financial statements. This study concludes that the fraudulent financial statements will be higher when the company growth is higher. Audit committee weakens the effect of company growth, the effectiveness of supervision, and the experience of directors on fraudulent financial statements.
Keywords: Fraudulent Financial Statement; Fraud Pentagon; Audit Committee
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Mulyadi, Roza, Fita Rani Aulia, and Mega Arum. "Pentagon Fraud Analysis in Detecting Fraudulent Financial Reporting Using the Fraud Score Model." Journal of Applied Business, Taxation and Economics Research 1, no. 2 (November 18, 2021): 158–70. http://dx.doi.org/10.54408/jabter.v1i2.29.
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This study was conducted to determine the effect of pentagon fraud (pressure, opportunity, rationalization, capability and arrogance) in detecting fraudulent financial reporting using F-Score in financial companies listed on the Indonesia Stock Exchange in 2017-2019. Using associative quantitative research methods. The population of this study are 100 companies with 49 sample of companies for 3 periods, so the sample total is 147 samples was obtained which was taken by purposive sampling technique. The testing method of this research is through multiple regression analysis with the SPSS 22 program. The results of the partial test analysis show that pressure and opportunity has significant effect in detecting fraudulent financial reporting. Whereas rationalization, capability and the arrogance variable has insignificant effect in detecting fraudulent financial reporting. The test results simultaneously are pressure, opportunity, rationalization, capability and arrogance has significant effect in detecting fraudulent financial reporting.
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Omar, Normah, Zulaikha ‘Amirah Johari, and Malcolm Smith. "Predicting fraudulent financial reporting using artificial neural network." Journal of Financial Crime 24, no. 2 (May 2, 2017): 362–87. http://dx.doi.org/10.1108/jfc-11-2015-0061.
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Purpose This paper aims to explore the effectiveness of an artificial neural network (ANN) in predicting fraudulent financial reporting in small market capitalization companies in Malaysia. Design/methodology/approach Based on the concepts of ANN, a mathematical model was developed to compare non-fraud and fraud companies selected from among small market capitalization companies in Malaysia; the fraud companies had already been charged by the Securities Commission for falsification of financial statements. Ten financial ratios are used as fraud risk indicators to predict fraudulent financial reporting using ANN. Findings The findings indicate that the proposed ANN methodology outperforms other statistical techniques widely used for predicting fraudulent financial reporting. Originality/value The study is one of few to adopt the ANN approach for the prediction of financial reporting fraud.
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Astuti, Sri, Zuhrohtun Zuhrohtun, and Kusharyanti Kusharyanti. "Fraudulent financial reporting in public companies in Indonesia: An analysis of fraud triangle and responsibilities of auditors." Journal of Economics, Business & Accountancy Ventura 18, no. 2 (August 28, 2015): 283. http://dx.doi.org/10.14414/jebav.v18i2.454.
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This study investigates the determinants of fraudulent financial reporting in Indonesia and the responsibility of auditor for fraudulent financial reporting. This study posits that fraud triangle affects the fraudulent financial reporting, and auditors do not give unqualified opinion for fraud firms. The sample consists of 380 firms listed on Indonesia Stock Exchange. The 39 of 380 firms have received punishment from BAPEPAM during 2007-2010 periods. This study uses logistic regression to test the first hypothesis and correlation to test the second hypothesis. The finding suggests that: 1) fraud triangle (opportunity, pressure, and rationalization) does not affect the fraudulent financial reporting; 2) auditor opinion has a positive correlation towards fraudulent financial reporting.
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Astuti, Sri, Zuhrohtun Zuhrohtun, and Kusharyanti Kusharyanti. "Fraudulent financial reporting in public companies in Indonesia: An analysis of fraud triangle and responsibilities of auditors." Journal of Economics, Business & Accountancy Ventura 18, no. 2 (August 28, 2015): 283. http://dx.doi.org/10.14414/jebav.v18i2.821.
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This study investigates the determinants of fraudulent financial reporting in Indonesia and the responsibility of auditor for fraudulent financial reporting. This study posits that fraud triangle affects the fraudulent financial reporting, and auditors do not give unqualified opinion for fraud firms. The sample consists of 380 firms listed on Indonesia Stock Exchange. The 39 of 380 firms have received punishment from BAPEPAM during 2007-2010 periods. This study uses logistic regression to test the first hypothesis and correlation to test the second hypothesis. The finding suggests that: 1) fraud triangle (opportunity, pressure, and rationalization) does not affect the fraudulent financial reporting; 2) auditor opinion has a positive correlation towards fraudulent financial reporting.
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Indarto, Stefani Lily, and Imam Ghozali. "Fraud diamond: Detection analysis on the fraudulent financial reporting." Risk Governance and Control: Financial Markets and Institutions 6, no. 4 (2016): 116–23. http://dx.doi.org/10.22495/rcgv6i4c1art1.
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The accounting scandal became one of the reasons for analyzing financial statements in order to minimize fraud against the financial reporting. Therefore, companies use the services of a public accountant to audit the financial statements of companies that are expected to limit the fraudulent practices that increase the public’s confidence in the company’s financial statements. This study aims to detect fraud by using analysis of fraud diamond . This study takes banking companies listed on the Indonesian Stock Exchange in 2009-2014, with a total sample of 149 banks. Based on the results the external pressure, financial stability and capability have influence on fraudulent financial reporting. While target financial, ineffective monitoring and rationalization does not affect the fraudulent financial reporting.
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Nolan, Kenneth J. "Pharmaceutical companies liable for fraudulent research by subcontractors." Drug Discovery Today 9, no. 4 (February 2004): 153–54. http://dx.doi.org/10.1016/s1359-6446(03)02913-1.
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Primasari, Niken Savitri, and Endah Tri Wahyuningtyas. "Analisis F-Score untuk Pendeteksian Window Dressing dengan Moderasi Manajemen Laba dan Cash Holding." E-Jurnal Akuntansi 31, no. 5 (May 25, 2021): 1189. http://dx.doi.org/10.24843/eja.2021.v31.i05.p09.
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Aims to detect financial statements and possibility of window dressing practices with Earning Management and Cash Holding as moderation that will lead to the fraudulent financial statements. The research samples are non-bank companies with DER value more than 2.00 and included in the kompas 100 index. The final result, indicated no companies conduct window dressing practices of their Performa Past Financial although there are several indicates Manajemen Laba concludes moderation for reduces F-Score that representing the Fraudulent Financial Report.
Keywords: Cash Holding; Earning Management; Fraudulent Financial Report; Window Dressing.
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Pramono Sari, Maylia, Kiswanto, Lintang Vernanda Rahmadani, Hera Khairunnisa, and Imang Dapit Pamungkas. "DETECTION FRAUDULENT FINANCIAL REPORTING AND CORPORATE GOVERNANCE MECHANISMS USING FRAUD DIAMOND THEORY OF THE PROPERTY AND CONSTRUCTION SECTORS IN INDONESIA." Humanities & Social Sciences Reviews 8, no. 3 (June 20, 2020): 1065–72. http://dx.doi.org/10.18510/hssr.2020.83109.
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Purpose of the study: This study aims to analyze the detection of the risk factors of fraudulent financial reporting and corporate governance mechanisms as moderating variables with fraud diamond theory of the property and construction sector in Indonesia. The risk factors of fraudulent financial reporting by financial targets, ineffective monitoring, auditor change, change of directors.
Methodology: The sample selection using purposive method sampling. The number of population in this study was 219. The samples of this study were 114 property and construction sector companies listed on the Indonesia Stock Exchange during 2016-2018. This study tests the hypothesis in multivariate analysis using logistic regression with IBM SPSS Statistics 25.
Main Findings: The results of this study the board of commissioners, independent commissioners, institutional ownership are able to moderate the relationship between financial targets on fraudulent financial reporting. The companies are able to optimize corporate governance mechanisms, especially the roles of the board of commissioners, independent commissioners, institutional ownership. So, that fraudulent financial reporting in the companies can decrease.
Implications of this study: The results of this study are expected to provide practical implications for companies listed on the Indonesia Stock Exchange, namely the need to strengthen the board of commissioners, independent commissioners, and institutional ownership to detect and prevent fraudulent financial reporting. The higher effectiveness of monitoring will be able to minimize the occurrence of fraudulent financial reporting.
Novelty/Originality of this study: This study uses fraud diamond theory to detect and tests the moderating variables of corporate governance mechanisms on the relationship between the determinant fraudulent financial reporting. The study uses a moderating variable that is corporate governance mechanisms which is proxy by the board of commissioners, independent commissioners, institutional ownership, and audit committee.
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Dasman, Sunita, and Nafisah Afkar Nida. "Dampak Kondisi Industri dan Pergantian Auditor terhadap Kecurangan Laporan Keuangan." jesya 5, no. 2 (June 1, 2022): 1930–41. http://dx.doi.org/10.36778/jesya.v5i2.771.
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The mining sector is one of the pillars of a country’s national economic development. In recent years the financial performance of the mining sector in Indonesia has decreased, therefore many companies are required to immediately improve their performance in order to survive by committing fraudulent financial reporting. This study aims to examine the effect of financial stability, financial target, nature of industry, and change in auditor toward fraudulent financial reporting. The sampling technique used purposive sampling method which resulted in 37 mining companies listed on the Indonesian Stock Exchange for the 2017-2020 period. The analytical method uses descriptive statistical test and logistic regression test with SPSS 25. The result of the analysis show that only financial target and nature of industry affect fraudulent financial reporting. While financial stability and change in auditor have no effect on fraudulent financial reporting. However, financial stability when interacted with financial target has an effect on fraudulent financial reporting. While nature of industry when interacted with change in auditor have no effect on fraudulent financial reporting.
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Randa, Alfamet, and Sany Dwita. "Pengaruh Elemen-Elemen Fraud Pentagon Terhadap Kecurangan Laporan Keuangan." JURNAL EKSPLORASI AKUNTANSI 2, no. 4 (December 9, 2020): 3405–18. http://dx.doi.org/10.24036/jea.v2i4.292.
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This study aims to determine the effect of pentagon fraud’s theory in detecting fraudulent financial reporting empirical studies on companies in property and real estate sector in Indonesia listed on the Stock Exchange in 2014-2018. The sampling technique used purposive sampling with the final sample of 18 companies. Data analysis used in this research is logistic regression analysis. The result of this research showed that : Pressure (ROA), Opportunity (BDOUT), Competence (DCHANGE) and Arogance (CEOPIC) have no significant effect on fraudulent financial reporting. While the Rationalization (Change of Auditor) has a significant effect on fraudulent financial reporting.
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Sidauruk, Tagor Darius, and Farhan Zulhaj Abimanyu. "Faktor-Faktor yang Mempengaruhi Kecurangan Laporan Keuangan dalam Perspektif Fraud Triangle." Jurnal Akuntansi, Keuangan, dan Manajemen 4, no. 1 (December 19, 2022): 29–42. http://dx.doi.org/10.35912/jakman.v4i1.1677.
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Abstract: Purpose: This research aims to examine, analyze, and obtain evidence the factors influencing in the fraudulent financial statements in fraud triangle perspective. Method: This research’s population are Manufacturing Companies Food and Beverage Sub Sector that Listed on Indonesia Stock Exchange period 2017-2019. The sampling method used in this research is purposive sampling method and obtained a total sample of 51 companies. This research uses logistic regression analysis to examine the effects of financial stability, financial targets, external pressures, personal financial needs, nature of industry, ineffective monitoring, organizational structure, auditor turnover, audit opinion and total accruals on the fraudulent financial statements. Results: The result of this research indicated that nature of industry influences on the fraudulent financial statements. Meanwhile, financial stability, financial targets, external pressures, personal financial needs, ineffective monitoring, organizational structure, auditor turnover, audit opinion and total accruals were not influence on the fraudulent financial statements. Keywords: 1. Fraudulent financial statements 2. Fraud Triangle 3. pressure 4. opportunity 5. rationalization
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Lissyana and Mukhlasin. "ANALISIS KECURANGAN PELAPORAN KEUANGAN BERBASIS STRATEGI BISNIS DAN BIAYA AUDIT DENGAN PENDEKATAN MODEL BENEISH M-SCORE." Prosiding Working Papers Series In Management 12, no. 2 (November 19, 2020): 108–19. http://dx.doi.org/10.25170/wpm.v12i2.4513.
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Cases of fraudulent financial reporting that have occurred both internationally and in Indonesia require further investigation as they remain provocative and relevant, influenced by many factors and can be viewed from multiple perspectives. indicates that The purpose of this research is to examine the relationship between business strategies and fraudulent financial reporting, and between audit fees and fraudulent financial reporting, from the perspective of management. In this study, business strategy was measured by assigning scores based on the Miles and Snow typology, exam fees were replaced with honoraria, and fraudulent financial statements were identified by calculation using the Beneish M-score model. The study uses a binary logistic regression technique that suggests prospects are more likely to have fraudulent business strategies compared to firms using defender strategies. Companies with high audit costs are at higher risk of fraud than companies with low audit costs. The findings may be used in future investigations related to financial reporting fraud.
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Natasya Mayabi, Fatiha, and Meriyani Meriyani. "Pengaruh Financial Stability, Leverage Dan Proftabilitas Terhadap Kemungkinan Terjadinya Fraudulent Financial Reporting pada Perusahaan Sektor Perbankan Yang Terdaftar Di Bursa Efek Indonesia Periode 2017 – 2019." EKASAKTI PARESO JURNAL AKUNTANSI 1, no. 1 (January 26, 2023): 1–11. http://dx.doi.org/10.31933/epja.v1i1.774.
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Abstract: This study aims to determine the effect of financial stability, leverage, and profitability on the possibility of fraudulent financial reporting. in banking sector companies listed on the IDX in 2017-2019. The type of data used in this study is quantitative data sourced from the company's financial statements. Source of data in this research is secondary data. The population in this study is a banking sector company on the Indonesia Stock Exchange in the period 2017 to 2019 with a total of 47 companies. The sampling technique used a purposive sampling technique according to predetermined criteria. Based on predetermined criteria, a sample of 26 companies was obtained. The analytical method used in this study uses logistic regression analysis test. The results of this study indicate that partially financial stability has an effect but not significantly on the possibility of fraudulent financial reporting, leverage has a significant effect on the possibility of fraudulent financial reporting, profitability has a significant effect on the possibility of fraudulent financial reporting reporting, simultaneously financial stability, leverage, and profitability affect the possibility of fraudulent financial reporting.
Abstrak: Penelitian ini bertujuan untuk mengetahui pengaruh financial stability, leverage, dan profitabilitas terhadap kemungkinan terjadinya fraudulent financial reporting. pada peruasahaan sektor perbankan yang terdaftar di bei tahun 2017-2019. Jenis data yang digunakan dalam penelitian ini adalah data kuantitatif yang bersumber dari laporan keuangan perusahaan. Sumber data dalam penelitian ini merupakan data sekunder. Populasi dalam penelitian ini merupakan perusahaan sektor perbankan di Bursa Efek Indonesia pada periode 2017 sampai 2019 sebanyak 47 perusahaan. Teknik pengambilan sampel menggunakan teknik purposive sampling sesuai kriteria yang sudah ditentukan Berdasarkan kriteria yang sudah ditentukan diperoleh sampel sebanyak 26 perusahaan. Metode analisis yang digunakan dalam penelitian ini menggunakan uji analisis regresi logistik Hasil penelitian ini menunjukkan bahwa secara parsial financial stability berpengaruh namun tidak signifikan terhadap kemungkinan terjadinya fraudulent financial reporting, leverage berpengaruh signifikan terhadap kemungkinan terjadinya fraudulent financial reporting, profitabilitas berpengaruh signifikan terhadap kemungkinan terjadinya fraudulent financial reporting, secara simultan financial stability, leverage, dan profitabilitas berpengaruh terhadap kemungkinan terjadinya fraudulent financial reporting.
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Irsutami, Irsutami, and Rizky Sapriadi. "Mendeteksi Kecurangan Laporan Keuangan Menggunakan Model Beneish." Journal of Applied Accounting and Taxation 5, no. 1 (March 31, 2020): 36–49. http://dx.doi.org/10.30871/jaat.v5i1.1868.
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This study aimed to determine the effect of eight Beneish variables on earnings management in detecting fraudulent financial statements in property, real estate and building construction companies listing on the Indonesia Stock Exchange in 2014 - 2018. The population in this study is 80 companies in property, real estate and building construction sector. The sampling technique uses purposive sampling. The method of data collection used archival data collection techniques in the database. Data analysis used descriptive analysis using the Beneish ratio index, the classic assumption test and simple linear regression analysis. The results showed that DSRI (DaysoSalesoinoReceivableoIndex), SGI (SalesoGrowthoIndex), DEPI (DepreciationoIndex), TATA (TotaloAccrualotooTotal AssetsoIndex), and LVGI (LeverageoIndex) variables significantly influence earnings management in detecting fraudulent financial statements in sample companies. While the GMI (Gross MarginoIndex), AQI (AssetoQualityoIndex), and SGAI (Selling, GeneraloandoAdministrative Index) no significant effect on earnings management in detecting fraudulent financial statements in sample companies.
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Puspitha, Made Yessi, and Ni Nyoman Ayu Diantini. "Kemampuan Beneish M-Score Dalam Memprediksi Fraudulent Financial Reporting." E-Jurnal Akuntansi 33, no. 2 (February 26, 2023): 570. http://dx.doi.org/10.24843/eja.2023.v33.i02.p20.
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The aim of this research is to determine the ability of the Beneish M-Score model to predict fraudulent financial reporting in banking companies in Indonesia. The research was conducted on all banking companies listed on the Indonesia Stock Exchange (IDX) in 2017-2021. The method of determining the sample using a non-probability method with purposive sampling technique. The data analysis technique used is discriminant analysis. The results showed that the Beneish M-Score was able to predict fraudulent financial reporting. The practical implication of this research is that investors can consider the Beneish M-Score before making economic decisions. The Beneish M-Score analysis can be an indication (red flag) of a company committing fraudulent financial reporting.
Keywords: Fraudulent Financial Reporting; Beneish M-Score; Discriminant Analysis
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Kabwe, Martin. "Fraudulent financial reporting and related party transactions." International Journal of Research in Business and Social Science (2147- 4478) 12, no. 2 (March 25, 2023): 217–28. http://dx.doi.org/10.20525/ijrbs.v12i2.2365.
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The study assessed the possibility of accounting fraud among Zambian listed companies with a focus on the mining sector and the relationship between related party transactions (RPTs) and financial statement manipulation (FSM). The financial statements (2012 to 2020) of listed companies were analysed to detect accounting fraud using the M-score and the Z-score. Descriptive statistics were used to explain the extent of FSM. The Chi-Square test of independence was employed to test the relationship between FSM and RPTs. Both the Z-Score and M-Score indicate that the mining companies were possibly involved in FSM. There is a relationship between the FSM and RPTs. The Total Accruals to Total Assets, Days in Sales in Receivables Index and Sales Growth Index show that revenue and profits were the most manipulated. The RPTs disclosures were the lowest for mining companies. Relevant authorities should not neglect FSM as a form of fraud despite the routine external audit of financial statements. There is the potential loss of tax revenue through accounting fraud.
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Sihombing, Tanggor, and Celine Celiana Cahyadi. "THE EFFECT OF FRAUD DIAMOND ON FRAUDULENT FINANCIAL STATEMENT IN ASIA PACIFIC COMPANIES." Ultimaccounting : Jurnal Ilmu Akuntansi 13, no. 1 (June 30, 2021): 143–55. http://dx.doi.org/10.31937/akuntansi.v13i1.2031.
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Abstract - This study aims to determine how the influence of fraud diamonds in detecting fraudulent financial statements in companies in Asia-Pacific listed in S&P in 2017-2019. The study used a purposive sampling method with a total population of 228 companies with a sample of 78 companies and used the STATA program for analysis. The results of the hypothesis testing carried out were that the pressure on financial stability had an effect on fraudulent financial statements with a significant level of 0.000 which was smaller than the significant level in this study which was 0.0101 so that it is accepted with the understanding that financial assets in the company have an effect on committing fraud, the opportunity for the nature of industry to affect the fraudulent financial statement with a significant level of 0.001 where smaller than the significant level in this study which is 0.01 so it is accepted with the understanding that warehouse inventory can be a trigger for someone to commit fraud, the rationalization of total accruals has an effect on fraudulent financial statements with a significant level of 0.003 which is smaller than the significant level in this study which is 0.01 so it is accepted with the understanding that the total accruals owned by the company have an impact because someone can commit fraud by falsifying total accruals, and the ability to use a dummy has no effect on fraudulent financial statements with a significant level of 0.295 which is greater than the significant level in this study which is 0.01 so that it is rejected with the understanding that the change of directors is not a factor in someone committing fraud.
Keywords: Financial Stability; Nature of Industry; Rationalization; Capability; Fraudulent Financial Statement
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Made, Karmelia Agatha, Diyah Sukanti Cahyaningsih, and Waluyo Djati. "Fraud Diamond: Four Elements of Financial Report Fraud Detection – Study on Coal Producers." Journal of Research on Business and Tourism 3, no. 1 (June 30, 2023): 55. http://dx.doi.org/10.37535/104003120236.
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The aim of this research is to examine the impact of fraud diamonds on the identification of fraudulent financial statements. Fraud diamonds, a framework used to detect fraudulent financial statements, considers various factors such as pressure (measured by ROA), opportunity (measured by Ineffective monitoring (IND)), rationalization (measured by auditor turnover (AUDCHANGE)), and capability (measured by the change of directors (DIRCHANGE)). The research sample comprised of 9 companies selected through purposive sampling. Logistic regression analysis was employed as the analytical method, with rationalization and capability serving as the independent variables, assessed through a binary variable with values 0 and 1. The findings indicate that pressure significantly influences the detection of fraudulent financial statements. Specifically, higher ROA values correspond to a lower likelihood of fraudulent financial statements. Opportunity also has an impact on the detection of fraudulent financial statements, as an increase in ineffective monitoring levels leads to a higher detection rate of financial statement fraud. On the other hand, rationalization does not affect the identification of fraudulent financial statements, suggesting that auditor turnover rate does not play a role in detection. Similarly, capability, represented by the replacement of the board of directors, does not impact the detection of fraudulent financial statements in companies.
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Sagala, Samuel Gevanry, and Valentine Siagian. "Pengaruh Fraud Hexagon Model Terhadap Fraudulent Laporan Keuangan pada Perusahaan Sub Sektor Makanan dan Minuman yang Terdaftar di BEI Tahun 2016-2019." Jurnal Akuntansi 13, no. 2 (November 3, 2021): 245–59. http://dx.doi.org/10.28932/jam.v13i2.3956.
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Abstract
This study aims to determine the effect of the fraud hexagon model, namely pressure (stimulus) which is proxied by financial targets and financial stability, capabilities that are proxied by changes in directors, opportunities proxied by ineffective monitoring, rationalization proxied by change in auditors, arrogance proxied by frequent number of CEO's picture, and collusion proxied by government projects, political connections and state-owned enterprises to fraudulent financial statements. The sample of this study is the food and beverage sub sector manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2019. This study uses secondary data, namely financial reports and annual reports. Based on the purposive sampling method, the number of companies sampled in this study was 18 companies from a total of 32 companies registered and analyzed by multiple linear regression analysis using the SPSS 25 program. The results of this study found that the elements of pressure that are proxied by financial targets and financial stability had a significant effect on fraudulent financial statements. Meanwhile, change of directors, ineffective monitoring, change in auditors, frequent number of CEO's pictures, government projects, political connections and state-owned enterprises have no significant effect on fraudulent financial statements in food and beverage sub sector manufacturing companies listed on the IDX in 2016- 2019.
Keywords: Fraudulent Financial Statement, and Fraud Hexagon Model
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Ramdany, Ramdany, Resty Harmenawati, and Samukri Samukri. "MEASURING THE LEVEL OF FRAUD ON FINANCIAL STATEMENTS: MODEL OF FRAUD TRIANGLE (Case Studies on Companies Listed on the Indonesia Stock Exchange in 2014-2018)." Jurnal Ekobis : Ekonomi Bisnis & Manajemen 11, no. 1 (March 31, 2021): 133–49. http://dx.doi.org/10.37932/j.e.v11i1.253.
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This study aims to measure the level of fraudulent financial statements with the fraud triangle model. The independent variables are pressure, opportunity, rationalization, and the dependent variable is fraudulent financial statements. The population in this study is companies listed on the Indonesia Stock Exchange (IDX) in 2014-2018 with a sample of 100 companies. Data analysis techniques using multiple linear regression. The results show that the pressure with proxies the financial stability and financial target and the opportunity with proxy the nature of industry has significant effect on the financial statement fraud. Meanwhile, the opportunity with proxies the ineffective monitoring and rationalization have not significant effect on the financial statement fraudulent.
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Ratmono, Dwi, Darsono Darsono, and Nur Cahyonowati. "Financial Statement Fraud Detection With Beneish M-Score and Dechow F-Score Model: An Empirical Analysis of Fraud Pentagon Theory in Indonesia." International Journal of Financial Research 11, no. 6 (December 1, 2020): 154. http://dx.doi.org/10.5430/ijfr.v11n6p154.
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This research contributes to the Financial Statement Fraud (FSF) literature by examining the ability of the Beneish model and the F-Score model to detect FSF trends in the Indonesian context. This study also aims to provide empirical evidence on other issues that encourage fraud. The results of this study are empirical evidence that the financial target variables and CEO narcissism have a significant effect on financial statement fraud while financial stability, external pressure, supervision ineffectiveness, related party transactions, auditor turnover, and CEO dominance have no significant effect on financial statement fraud. Furthermore, when viewed in the table of the F-Score and M-Score models, there are several companies suspected or indicated of fraudulent financial reporting, including 284 companies out of 385 observation samples. The percentage of companies indicated to have financial statements fraud requires further examination to really prove that the company is cheating. The results of the fraudulent financial report analysis using the F-Score dan M-score for manufacturing companies in 2014 - 2018 successfully analyzed a total of 284 companies that indicated fraudulent financial reporting.
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Rybalchenko, Lyudmila, and Eduard Ryzhkov. "ANALYSIS OF THE STATUS OF THE FRAUD WITHIN THE ENTERPRISES IN DIFFERENT COUNTRIES AROUND THE WORLD." MEST Journal 10, no. 2 (July 15, 2022): 186–90. http://dx.doi.org/10.12709/mest.10.10.02.17.
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The consequences of fraudulent actions are losses of significant financial resources in companies, which endangers their business. The resolution of the occurred criminal issues is complex and therefore requires the exchange of the experience of many countries worldwide. It is needed to conduct an internal audit to detect embezzlement in the company. The relevant department must carry out the audit, e.g., the security services department, involving an internal audit, internal control, and legal department. Identification of persons possibly involved in fraudulent actions is a complex issue that carries a criminal responsibility. Different companies impose disciplinary liability, penalties, or criminal liability on employees. The most common are corruption, misappropriation of property, and falsification of financial statements. The variety of fraudulent schemes grows and becomes even more dangerous for businesses. Fraudsters analyze the financial statements of enterprises and find vulnerabilities to create threats and fraudulent actions. Such schemes lead to risks for both large and small businesses worldwide. Most companies have been affected by fraud incidents in recent years. The unreliable partners frequently cause losses in the companies. The negative consequences of risky activities include losses of money, reputation, and trust of customers and partners. All affect the loss of profits, which is the purpose of the activities.
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Narew, Ignasius, Dianah Zuhroh, and Harmono Harmono. "ANALISIS DIAMOND FRAUD THEORY DALAM MENDETEKSI KECURANGAN LAPORAN KEUANGAN Studi Kasus Pada Industri Keuangan Dan Industri Manufaktur Yang Terdaftar Di Bursa Efek Indonesia." Jurnal Akuntansi Trisakti 8, no. 2 (September 30, 2021): 317–42. http://dx.doi.org/10.25105/jat.v8i2.10129.
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Fraud is a threat to an entity and is a problem that continues to this day. Thus the purpose of this study is to examine the effect of variables from elements of the diamond fraud theory which include financial stability, external pressure, financial targets, personal financial needs, number of audit committee members, nature of industry, auditor turnover, and auditor turnover on fraudulent financial statement of financial and manufacturing industry companies listed on the Indonesia Stock Exchange. The samples used in this study were 67 financial industry companies and 67 manufacturing industrial companies in the 2014-2019 period. The data were analyzed using logistic regression because the fraudulent financial statement variable in this study is a dummy variable whose determination is based on the calculation of the Altman Z Score. The findings of this study indicate that of the 8 elements of the diamond fraud theory variable, only external pressure and financial target variables have an effect on fraudulent financial statements in financial industry companies, while in the manufacturing industry only external pressure and nature of industry variables have a significant effect. Keywords :diamond fraud theory, fraudulent financial statement, financial stability, personal financial need, number of audit committee members, nature of industry, change of auditors, and change of directors
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Irawan, Helmiansyah, and Titik Aryati. "MODERATING OF POLLITICAL CONNECTION ON FACTORS AFFECTING FRAUDULENT FINANCIAL STATEMENT FROM THE PENTAGON FRAUD MODEL PERSPECTIVE." Archives of Business Research 9, no. 10 (October 16, 2021): 64–78. http://dx.doi.org/10.14738/abr.910.10813.
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ABSTRACT
The Purpose of this research is to analyze the effect of the factors that effect of fraud in financial statements that occur in companies. And also analyzes the impact of political connections as a moderating variable that strengthens or weakens the factors that influences fraud in the financial statements.The author collects empirical study data from manufacture industry companies, using secondary data taken from annual reporting of companies listed in the Indonesia Stock Exchange and analyzes them using the SPSS program. A total of 60 units of data analysis that meet the criteria and can be used as sample in the research. This research reveals that effective monitoring and change of director has a positive and significant effect on financial statement of fraudulent. A set of financial targets, changes of auditors, and the frequencies of CEO pictures have not effect on fraudulent of financial statement. Whatever, the impact on political connection as oderating variable only strengthens the influence between effective monitoring and change of BOD on fraudulent financial statement from before being moderated by the political connection. This study only takes data of secondary from the annual reporting of companies and financial reports of firm from BEI, especially the manufacturing industry which only covers three sectors. Meanwhile, the Indonesia Stock Exchange consists of nine existing industrial sectors. Originality/value for this research is Political Connection as a moderator between financial stability, in effectively monitoring, change of auditor, change of director and frequencies of number commissioner’s pictures on financial statement of fraudulent in the context of manufacture companies listed in BEI is still little researched. So this research will not only fill in the current gaps in the literature but also spark new academic debates, but this study will also contribute to the practice of fraudulent financial.
Keywords: financial stability, ineffectively monitoring, changes of auditor, changes of director, financial statement of fraudulent
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PAMUNGKAS, Imang Dapit, and St Dwiarso UTOMO. "Fraudulent Financial Reporting: An Application of Fraud Pentagon Theory to Association of Southeast Asian Nations Corporate Governance Scorecard." Journal of Advanced Research in Law and Economics 9, no. 5 (June 10, 2019): 1729. http://dx.doi.org/10.14505//jarle.v9.5(35).26.
Full textAbstract:
This study aims to detect and examine fraudulent financial reporting by applying fraud pentagon theory to all companies implementing the Association of Southeast Asian Nations (ASEAN) Corporate Governance Scorecard in Indonesia. This study has the following objectives: to examine and analyze the effect of financial stability, external pressure, financial target, nature of industry, audit opinion, change of directors, managerial ownership against fraudulent financial reporting.
In this research, we use correlation research type. The population of this sample is all sectors of companies listed on the Indonesia Stock Exchange. Using sampling technique in the form of Purposive Sampling Technique applying ASEAN Corporate Governance Scorecard in Indonesia with research period of 2012 to 2016, which produce 30 samples, multiple linear regression analysis using SPSS version 22.
The results of this study found that financial stability, managerial ownership has a negative and insignificant effect on fraudulent financial reporting. External pressure, nature of industry has a negative and significant effect on fraudulent financial reporting. Financial Target, Audit Opinion, Change of Directors has a positive and insignificant effect on Fraudulent Financial Reporting.
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Andriani, Kadek Fitri, Ketut Budiartha, Maria Mediatrix Ratna Sari, and Anak Agung Gde Putu Widanaputra. "Fraud pentagon elements in detecting fraudulent financial statement." Linguistics and Culture Review 6 (January 25, 2022): 686–710. http://dx.doi.org/10.21744/lingcure.v6ns1.2145.
Full textAbstract:
Public companies that are supposed to provide transparent and accountable information to outside parties, sometimes still hide facts and information that have a bad influence on their company's reputation. Public companies in Indonesia in carrying out their business activities have been specifically regulated and supervised by an independent institution, called the Financial Services Authority (OJK). OJK itself has issued several regulations on the presentation of financial statements, such as regulation no. IX.E.2 and rule number VIII.G. This study aims to detect financial statement fraud with the fraud pentagon model. Researchers use elements of financial stability, external pressure, personal financial need, financial target, nature of industry, ineffective monitoring, quality of external auditor, change in auditor, change of directors and frequent number of CEO's picture as independent variables on the ability to detect financial statement fraud as dependent variables. This study uses a sample of fraud companies that are subject to sanctions and cases of the Financial Services Authority (OJK) related to OJK regulations VIII G. 7 and IX. E. 2 in 2015-2019. The company sample consists of 31 fraudulent companies and 31 non-fraud companies.