scholarly journals Implementation of Regulatory and Supervisory Policy Authority in the Establishment of Internal SOP Against Credit Fraud in Indonesian Banking

2021 ◽  
Vol 6 (2) ◽  
pp. 199
Author(s):  
Mustika Prabaningrum Kusumawati ◽  
Ari Nur Rahman ◽  
Panzi Aulia Rahman
Keyword(s):  
Regulatory Policy ◽  
Financial Statement ◽  
Banking Supervision ◽  
Financial Statement Fraud ◽  
Regulatory Policies ◽  
Standard Operating ◽  
Main Factors ◽  
The Government ◽  
Business Sectors ◽  
Very High

Banking is one of the drivers and centers of a country's economy. Based on the authority they have, it is not surprising that the risk held by banks is very high. Therefore, banking is one of the business sectors that have very strict supervision. This paper discusses how the implementation of regulatory policy authorities applicable in Indonesia related to the establishment of internal banking Standard Operating Procedures (SOPs) in minimizing the potential for credit fraud and how internal and external supervisory authorities can become benchmarks in supporting the creation of anti-fraud policies, especially in credit fraud. There are two main factors that can create a potential credit fraud chain that leads to financial statement fraud: first, delays in updating regulatory policies; and second, ineffective and insensitive internal and external banking supervision. In addition, there needs to be a certain regulatory policy that deals with credit fraud, whether issued by the government, Bank Indonesia, OJK or internal Banking SOP itself.

Scoring the financial distress and the financial statement fraud of Garuda Indonesia with «DDCC» as the financial solutions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ryan Aviantara
Keyword(s):  
Financial Distress ◽  
Stock Exchange ◽  
Univariate Analysis ◽  
Strong Relationship ◽  
Safe Zone ◽  
Financial Statement ◽  
Fraud Triangle ◽  
Financial Statement Fraud ◽  
Content Type ◽  
The Government

Purpose PT Garuda Indonesia (GIAA) Persero Tbk is the one only pride airline of Indonesian sovereignty. Although the bird achieved abundant international awards and certifications, the bird is dying and needs a remedy immediately. The frequent annual turnover of board executives did not make impact to the financial performance; this seems to be tip of the iceberg, peculiar with the number of restatement over the past decade. Therefore, this paper aims to address the issue through the function of five red flags model which known as Altman Z-score, Sprigate S-score, Grover G-score, Beneish M-score and Dechow F-score. Design/methodology/approach This is exploratory study of univariate analysis using financial distress and fraudulent financial statement approach, while the type of data is secondary taken from Indonesia Stock Exchange during 12 years observation from 2007 to 2018. Findings Altman, Springate and Grover produce strong indication of GIAA’s financial distress; all models score the same distress indication by 14 times. All distress models agreed that only 2011 and 2012 classify to the safe zone when GIAA performed the corporate actions. Beneish scores fraud indication by eight times. Dechow scores slightly higher by nine times. The number of fraud predictions in this research are in line with the number of restatement, which proves the assumption that restatement can be used as a signal of the financial statement fraud. When GIAA categorized in safe zone, both Beneish and Dechow score no to fraud, this indicates the fraud occurence during health period is lower. Research limitations/implications The motivation behind the financial statement fraud is not discuss through this research but from the primary theory of the fraud triangle. Financial distress possesses strong relationship with pressure factor; therefore, exit from financial crisis is one of the best solution to mitigate the financial statement fraud. Practical implications The average of Beneish score is −2,26, slightly above the manipulator threshold which is −2,22. This must be marked as an ample conjecture of GIAA’s fraud inclination and been a highlight for the auditor both internal and external when performing control testing, attestation and other assurance services. Social implications All models in this study can apply to any other corporate issues, especially for evaluating the government company who has loosen the public trust recently in Indonesia such as PT Asuransi Jiwasraya and PT Asabri. Moreover, the pandemic COVID-19 has brought the world to the new unprecedented risk, especially the economic turmoil which lead the possibilities of corporate distress and fraud. By applying these scores, public might have tools as pre-elemenary assessment to serve a decision where to put trust in a company. Originality/value This paper reveals a combination from various models of financial distress and financial statement fraud in order to generate the financial solutions named « DDCC » Debt Restructuring, Debt Conversion, Capex Management and Cost Cutting.

scholarly journals The Ebb and Flow of Government Regulation: An Exploratory Study on the Regulation of Business Groups in Korea

2005 ◽  
Vol 20 (1) ◽  
pp. 81-98
Author(s):  
Sung Roe Lee
Keyword(s):  
Presidential Elections ◽  
Government Regulation ◽  
Regulatory Policy ◽  
Economic Recession ◽  
Economic Changes ◽  
Regulatory Policies ◽  
Economic Forces ◽  
The Government ◽  
Ruling Party ◽  
Ebb And Flow

When and why does government seek to introduce and strengthen the regulation of big business corporations, and when does government withdraw the regulation? In answering these questions, this study examines the ebb and flow of regulatory policy, which may be called a "regulatory tide." This study focuses on the effect of crucial political and economic changes such as presidential elections and economic recession. We propose that political changes tend to enforce the government and the ruling party to strengthen regulatory policy on business corporations. Economic forces tend to press the goevernment and ruling party to weaken regulatory policy and, in turn, regulatory policy tends to alternate strengthening and weakening periods. These propositions are examined using Korean regulatory policies on business conglomerations during 1980-2002.

scholarly journals Corruption, Financial Statement Fraud, and Business Failure in Nigeria

2019 ◽  
pp. 1-10
Author(s):  
Temple Moses
Keyword(s):  
Positive Relationship ◽  
Considerable Effect ◽  
Financial Statement ◽  
Business Failure ◽  
Financial Statement Fraud ◽  
Doing Business ◽  
The Government ◽  
Proactive Measures ◽  
The Cost

This research paper investigated the role of corruption and financial statement fraud in business failure in Nigeria. Data for the study was collected through the issuance of a structured questionnaire to professional accountants and auditors and analyzed using descriptive statistics and the OLS method of multiple regression analyses. The results of the analyses showed a positive relationship between the prevalence of corruption and the phenomenon of business failure as well as a positive relationship between financial statement fraud and business failure in Nigeria. From the findings, it was concluded that corruption increases the risk of business failure by causing an increase in the cost of doing business. It was also deduced that the menace of financial statement fraud significantly increases the risk of business failure. Thus, a reduction in institutional corruption will have a considerable effect on the ability of businesses to survive and thrive. It is recommended that the government take serious measures to curb the problem of corruption to guarantee safe economic environment for businesses to navigate. It is also recommended that regulators take proactive measures to reduce the incidences of financial statement fraud perpetrated in the country.

scholarly journals Pentagon fraud perspective analysis in detecting indications of financial statement fraud

2021 ◽  
Vol 8 (6) ◽  
pp. 619-629
Author(s):  
Ni Putu Winda Ayuningtyas ◽  
I Putu Sudana ◽  
I Wayan Suartana ◽  
Ni Putu Sri Harta Mimba
Keyword(s):  
Stock Exchange ◽  
Sample Selection ◽  
Sampling Technique ◽  
Financial Statement ◽  
Financial Statement Fraud ◽  
Analysis Technique ◽  
Negative Effect ◽  
The Government ◽  
Financial Need ◽  
Fraudulent Financial Statements

This study aims to obtain empirical evidence regarding the elements of fraud pentagon theory on indications of financial statement fraud. This research was conducted on banking companies listed on the Indonesia Stock Exchange (IDX) for the 2017-2020 period. The method of determining the sample used is non-probability sampling with purposive sampling technique. The number of samples that meet the sample selection criteria are 140 samples, namely 35 banking companies during the four years of observation 2017-2020. The data analysis technique used is multiple linear regression. Based on the results of the analysis, it is stated that the nature of industry and change of directors have a negative effect on indications of financial statement fraud, while personal financial need, rationalization, and CEO duality have no effect on indications of financial statement fraud. This study has implications for investors, creditors, the government and other parties who need financial statement information to consider the elements of the fraud pentagon theory to detect indications of fraudulent financial statements in banking companies.

Pengaruh Faktor Demografi Dan Iklim Organisasi Terhadap Niat Whistleblowing Internal

2017 ◽  
Vol 4 (1) ◽  
pp. 12-22
Author(s):  
Priyastiwi Priyastiwi
Keyword(s):  
Data Analysis ◽  
Data Collection ◽  
Organizational Climate ◽  
Demographic Factors ◽  
Financial Statement ◽  
Research Use ◽  
Analysis Method ◽  
Financial Statement Fraud ◽  
Internal Whistleblowing ◽  
Collection Methods

This study aimed to examine the effect of demographic factors and organizational climate on the intention of internal whistleblowing. The sample was an accountant who had worked as an auditor. Data collection methods using questionnaires with financial statement fraud case scenarios. This research use ANOVA data analysis method to examine demographic factors include age, gender, and experience, as well as organizational climate on the intention of internal whistleblowing. The results showed only the experience of demographic factors that influence internal whistleblowing. Besides internal whistlelowing also influenced by organizational climate in the company.Keyword: Demographics, Organizational Climate, Whistleblowing

Fraud of Financial Statements at Listed Enterprises on Ho Chi Minh City Securities Department

2018 ◽  
Vol 34 (4) ◽  
Author(s):  
Nguyen Tien Hung ◽  
Huynh Van Sau
Keyword(s):  
New York ◽  
Financial Reporting ◽  
Financial Statements ◽  
Financial Statement ◽  
Viet Nam ◽  
Fraud Triangle ◽  
Fraudulent Financial Reporting ◽  
Financial Statement Fraud ◽  
Corporate Fraud ◽  
Two Factors

The study was conducted to identify fraudulent financial statements at listed companies (DNNY) on the Ho Chi Minh City Stock Exchange (HOSE) through the Triangular Fraud Platform This is a test of VSA 240. At the same time, the conformity assessment of this model in the Vietnamese market. The results show that the model is based on two factors: the ratio of sales to total assets and return on assets; an Opportunity Factor (Education Level); and two factors Attitude (change of independent auditors and opinion of independent auditors). This model is capable of accurately forecasting more than 78% of surveyed sample businesses and nearly 72% forecasts for non-research firms.  Keywords Triangle fraud, financial fraud report, VSA 240 References Nguyễn Tiến Hùng & Võ Hồng Đức (2017), “Nhận diện gian lận báo cáo tài chính: Bằng chứng thực nghiệm tại các doanh nghiệp niêm yết ở Việt Nam”, Tạp chí Công Nghệ Ngân Hàng, số 132 (5), tr. 58-72.[2]. Hà Thị Thúy Vân (2016), “Thủ thuật gian lận trong lập báo cáo tài chính của các công ty niêm yết”, Tạp chí tài chính, kỳ 1, tháng 4/2016 (630). [3]. Cressey, D. R. (1953). Other people's money; a study of the social psychology of embezzlement. New York, NY, US: Free Press.[4]. Bộ Tài Chính Việt Nam, (2012). Chuẩn mực kiểm toán Việt Nam số 240 – Trách nhiệm của kiểm toán viên đối với gian lận trong kiểm toán báo cáo tài chính. [5]. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.[6]. Võ Hồng Đức & Phan Bùi Gia Thủy (2014), Quản trị công ty: Lý thuyết và cơ chế kiểm soát, Ấn bản lần 1, Tp.HCM, Nxb Thanh Niên.[7]. Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman independence on corporate fraud. Managerial Finance 26 (11): 55-67.[9]. Skousen, C. J., Smith, K. R., & Wright, C. J. (2009). Detecting and predicting financial statement fraud: The effectiveness of the fraud triangle and SAS No. 99. Available at SSRN 1295494.[10]. Lou, Y. I., & Wang, M. L. (2011). Fraud risk factor of the fraud triangle assessing the likelihood of fraudulent financial reporting. Journal of Business and Economics Research (JBER), 7(2).[11]. Perols, J. L., & Lougee, B. A. (2011). The relation between earnings management and financial statement fraud. Advances in Accounting, 27(1), 39-53.[12]. Trần Thị Giang Tân, Nguyễn Trí Tri, Đinh Ngọc Tú, Hoàng Trọng Hiệp và Nguyễn Đinh Hoàng Uyên (2014), “Đánh giá rủi ro gian lận báo cáo tài chính của các công ty niêm yết tại Việt Nam”, Tạp chí Phát triển kinh tế, số 26 (1) tr.74-94.[13]. Kirkos, E., Spathis, C., & Manolopoulos, Y. (2007). Data mining techniques for the detection of fraudulent financial statements. Expert Systems with Applications, 32(4), 995-1003.[14]. Amara, I., Amar, A. B., & Jarboui, A. (2013). Detection of Fraud in Financial Statements: French Companies as a Case Study. International Journal of Academic Research in Accounting, Finance and Management Sciences, 3(3), 40-51.[15]. Beasley, M. S. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. Accounting Review, 443-465.[16]. Beneish, M. D. (1999). The detection of earnings manipulation. Financial Analysts Journal, 55(5), 24-36.[17]. Persons, O. S. (1995). Using financial statement data to identify factors associated with fraudulent financial reporting. Journal of Applied Business Research (JABR), 11(3), 38-46.[18]. Summers, S. L., & Sweeney, J. T. (1998). Fraudulently misstated financial statements and insider trading: An empirical analysis. Accounting Review, 131-146.[19]. Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1996). Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary accounting research, 13(1), 1-36.[20]. Loebbecke, J. K., Eining, M. M., & Willingham, J. J. (1989). Auditors experience with material irregularities – Frequency, nature, and detectability. Auditing – A journal of practice and Theory, 9(1), 1-28. [21]. Abbott, L. J., Park, Y., & Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. Managerial Finance, 26(11), 55-68.[22]. Farber, D. B. (2005). Restoring trust after fraud: Does corporate governance matter?. The Accounting Review, 80(2), 539-561.[23]. Stice, J. D. (1991). Using financial and market information to identify pre-engagement factors associated with lawsuits against auditors. Accounting Review, 516-533.[24]. Beasley, M. S., Carcello, J. V., & Hermanson, D. R. (1999). COSO's new fraud study: What it means for CPAs. Journal of Accountancy, 187(5), 12.[25]. Neter, J., Wasserman, W., & Kutner, M. H. (1990). Applied statistical models.Richard D. Irwin, Inc., Burr Ridge, IL.[26]. Gujarati, D. N. (2009). Basic econometrics. Tata McGraw-Hill Education.[27]. McFadden, D. (1974). Conditional Logit Analysis of Qualita-tive Choice Behavior," in Frontiers in Econometrics, P. Zarenm-bka, ed. New York: Academic Press, 105-42.(1989). A Method of Simulated Moments for Estimation of Discrete Response Models Without Numerical Integration," Econometrica, 54(3), 1027-1058.[28]. DA Cohen, ADey, TZ Lys. (2008), “Accrual-Based Earnings Management in the Pre-and Post-Sarbanes-Oxley Periods”. The accounting review.

Legal Review of Medical Emergency that Happened after a Failed Abortion Attempt

2020 ◽  
Vol 4 (1) ◽  
pp. 63
Author(s):  
Elfan Winoto
Keyword(s):  
Legal Protection ◽  
Criminal Code ◽  
Professional Standards ◽  
Doctor Who ◽  
Legal Research ◽  
Criminal Offender ◽  
Standard Operating ◽  
Medical Emergencies ◽  
The Government ◽  
Legal Consequences

<p>Abortion is the fifth highest cause of maternal mortality. Legal abortions are called <em>abortus provocatus medicinalis</em> and those that are illegal are called <em>abortus provocatus criminalis</em>. Indonesian law prohibits abortion except indications of medical emergencies and the consequences of rape. This study aims to determine the legal consequences of someone who failed an abortion and the legal protection of the doctor who treated her.</p><p>This legal research uses a juridical normative with a conceptual and legislative approach.</p><p>The results of the perpetrators and those who helped the abortion that caused medical emergencies to be threatened with Criminal Code Article 53. They cannot be convicted if in accordance with professional standards and standard operating procedures.</p><p>The conclusion and suggestion are the doctor cannot be convicted as a criminal offender or as an assistant to an abortion crime if it can be proven that an abortion is carried out in emergency condition to save mother or fetus and prevent disability. The government needs to make laws that regulate who will carry out safe, qualitative and responsible abortions.</p><p> </p><p>Abortion is the fifth highest cause of maternal mortality. Legal abortions are called <em>abortus provocatus medicinalis</em> and those that are illegal are called <em>abortus provocatus criminalis</em>. Indonesian law prohibits abortion except indications of medical emergencies and the consequences of rape. This study aims to determine the legal consequences of someone who failed an abortion and the legal protection of the doctor who treated her.</p><p>This legal research uses a juridical normative with a conceptual and legislative approach.</p><p>The results of the perpetrators and those who helped the abortion that caused medical emergencies to be threatened with Criminal Code Article 53. They cannot be convicted if in accordance with professional standards and standard operating procedures.</p><p>The conclusion and suggestion are the doctor cannot be convicted as a criminal offender or as an assistant to an abortion crime if it can be proven that an abortion is carried out in emergency condition to save mother or fetus and prevent disability. The government needs to make laws that regulate who will carry out safe, qualitative and responsible abortions.</p>

FRAUD TRIANGLE ANALYSES IN DETECTING FRAUDULENT FINANCIAL STATEMENT USING FRAUD SCORE MODEL

2020 ◽  
Vol 25 (1) ◽  
pp. 29-44
Author(s):  
Mariati ◽  
Emmy Indrayani
Keyword(s):  
Financial Stability ◽  
Linear Regression Analysis ◽  
Financial Statements ◽  
Multiple Linear Regression Analysis ◽  
External Pressure ◽  
Financial Statement ◽  
Fraud Triangle ◽  
Financial Statement Fraud ◽  
Financial Condition ◽  
Score Model

Company’s financial condition reflected in the financial statements. However, there are many loopholes in the financial statements which can become a chance for the management and certain parties to commit fraud on the financial statements. This study aims to detect financial statement fraud as measured using fraud score model that occurred in issuers entered into the LQ-45 index in 2014-2016 with the use of six independent variables are financial stability, external pressure, financial target, nature of industry, ineffective monitoring and rationalization. This study using 27 emiten of LQ-45 index during 2014-2016. However, there are some data outlier that shall be removed, thus sample results obtained 66 data from 25 companies. Multiple linear regression analysis were used in this study. The results showed that the financial stability variables (SATA), nature of industry (RECEIVBLE), ineffective monitoring (IND) and rationalization (ITRENDLB) proved to be influential or have the capability to detect financial statement fraud. While the external pressure variables (DER) and financial target (ROA) are not able to detect the existence of financial statement fraud. Simultaneously all variables in this study were able to detect significantly financial statement fraud.

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