scholarly journals DETEKSI FRAUDULENT FINANCIAL REPORTING MENGGUNAKAN FRAUD PENTAGON

2021 ◽  
Vol 13 (1) ◽  
pp. 125-142
Author(s):  
Carla Carla ◽  
Stevanus Pangestu
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Stability ◽  
Fixed Effects ◽  
External Pressure ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Ceo Duality ◽  
Fixed Effects Panel Regression ◽  
Financial Need

Abstract— The purpose of this research is to analyze the effects of variables, which were derived from the Fraud Pentagon framework, on earnings management. Beneish M-Score was used to measure earnings management, which serves as a proxy fraudulent financial reporting. The independent variables consist of financial target, financial stability, external pressure, personal financial need, nature of industry, effective monitoring, change in auditor, change in director, and CEO duality. One hundred and sixteen publicly traded manufacturing companies were examined for the period 2016-2018 (n=348). Our balanced dataset was analyzed using fixed-effects panel regression. Our investigation finds that financial target, external pressure, personal financial need, nature of industry, change in auditor, and CEO duality significantly affect fraudulent financial reporting. Meanwhile, financial stability, ineffective monitoring, and change in director do not significantly affect fraudulent financial reporting.   Keywords: Earnings Management; Fraud, Fraud Pentagon; Fraudulent Financial Reporting

scholarly journals Detecting the Likelihood of Fraudulent Financial Reporting: An Analysis of Fraud Diamond

2019 ◽  
Vol 14 (1) ◽  
pp. 43-68
Author(s):  
Reni Yendrawati ◽  
◽  
Huda Aulia ◽  
Hendi Yogi Prabowo ◽  
◽  
...  
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
External Pressure ◽  
Financial Statement ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Research Findings ◽  
Pressure Factor

This paper aims to analyze the likelihood of fraudulent financial reporting using the fraud diamond analysis. Fraud diamond is a concept explaining factors that cause someone to commit fraud, namely pressure, opportunity, rationalization, and capability. In this research, pressure factor was proxied by using financial stability, external pressure, and financial target. Opportunity factor was proxied by using the nature of industry and effectiveness of monitoring. Rationalization factor was proxied by rationalization and capability was proxied by capability. This research made use of earnings management to discover the likelihood of financial statement frauds. Earnings management was measured by using F-score indicator. The population in this research were manufacturing companies listed on the Indonesian Stock Exchange (IDX) from the year 2014 – 2016. From the population, 31 companies were selected as the research samples by using the purposive sampling method. This quantitative method-using research was analyzed using multiple regression analysis and T-tests for hypotheses testing. The research findings reveal that only the opportunity variable proxied by industrial nature is proven to have an influence in detecting the likelihood of fraudulent financial reporting. In the meantime, other variables have no influence in detecting the likelihood of fraudulent financial reporting. Keywords: fraud diamond, likelihood of fraudulent financial reporting, f-score

scholarly journals Fraud Pentagon and Fraudulent Financial Reporting: Evidence from Manufacturing Companies in Indonesia and Malaysia

2021 ◽  
Vol 22 (3) ◽  
pp. 625-646
Author(s):  
Erni Suryandari Fathmaningrum ◽  
Gupita Anggarani
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
External Pressure ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Auditor Change ◽  
External Auditor ◽  
Financial Need

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.

scholarly journals FINANCIAL STATEMENT FRAUD DETECTION USING PERSPECTIVE OF FRAUD TRIANGLE ADOPTED BY SAS NO. 99

2016 ◽  
Vol 1 (2) ◽  
pp. 317 ◽  
Author(s):  
Shabrina Prasmaulida
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
Cash Flows ◽  
External Pressure ◽  
Financial Statement ◽  
Fraud Triangle ◽  
Manufacturing Companies ◽  
Financial Statement Fraud ◽  
Financial Need

Financial statements generally aim to provide information about the company’s financial position, performance, and cash flows to the interested parties. The motivation to gain trust from the users, especially investors, shareholders and creditors, leads someone to commit fraud in the financial reporting. This study aims to detect and predict financial statement fraud based on the perspective of fraud triangle adopted by SAS No. 99. The dependent variable in this study is financial statement fraud which is proxied by earnings management, while the independent variables in this study are financial stability pressure, personal financial need, ineffective monitoring, effective monitoring, external pressure, and financial targets.Population of this research is manufacturing companies listed in Indonesia Stock Exchange period 2012 - 2014. Samples are selected using purposive sampling method and obtained 150 companies out of a total population of 162 companies. The results show that financial stability pressure and external pressurehave significant positive effect on financial statement fraud. Meanwhile, personal financial need, ineffective monitoring, effective monitoring, and financial targets do not have significant effect on financial statement fraud.

scholarly journals PENGUJIAN FRAUD PENTAGON TERHADAP RESIKO FINANCIAL FRAUDULENT REPORTING

2020 ◽  
Vol 12 (2) ◽  
pp. 147-158
Author(s):  
Meiliana Jaunanda ◽  
Daniel Peterson Silaban
Keyword(s):  
Financial Reporting ◽  
Significant Influence ◽  
Financial Stability ◽  
Firm Growth ◽  
Financial Statements ◽  
External Pressure ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Research Subjects ◽  
Fraudulent Financial Statements

The research to examine how much financial stability, financial target, external pressure, nature of industry, ineffective monitoring, rationalization, capability and oship have effect partially and simultaneously to fraud pentagon. The research subjects used were manufacturing companies and were listed on the BEI in the 2014-2018 period. The results of this study are financial stability has a significant influence on fraudulent financial reporting. Rationalization has a significant effect on fraudulent financial reporting. Arrogance partially has a significant influence on fraudulent financial statements, financial target, external pressure, nature of industry, ineffective monitoring, rationalization, capability and oship simultaneously have a significant effect on fraudulent financial statements. Key Words: Financial performance, Efficiency Operation, Firm Growth, Leverage, Fraud

scholarly journals Business Ethics in Providing Financial Statements: The Testing of Fraud Pentagon Theory on the Manufacturing Sector in Indonesia

2019 ◽  
Vol 3 (3) ◽  
pp. 68-77
Author(s):  
Einde Evana ◽  
Mega Metalia ◽  
Edwin Mirfazli ◽  
Daniela Ventsislavova Georgieva ◽  
Istianingsih Sastrodiharjo
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Manufacturing Sector ◽  
External Pressure ◽  
Financial Statement ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Financial Statement Fraud ◽  
Leverage Ratio ◽  
Total Accrual

The article studies the causes and consequences of manipulating the financial statements of companies, identifies the most influential drivers of fraudulent reporting actions by employees and business owners. This research aimed to examine the effect of fraud indicators in fraud pentagon theory against the detection of fraudulent financial reporting on manufacturing companies. Independent variables in this research were variable pressure proxy by financial stability, external pressure, and financial target, opportunity proxy by nature of the industry, rationalization proxy by total accrual, capability proxy by the change of directors, and arrogance proxy by ownership by management. The dependent variable was the fraudulent financial reporting proxy by fraud score. The sample of this research used 57 manufacturing companies listed on the Indonesia Stock Exchange Effect in 2013-2015. It is found that the result of the determination coefficient test shows an adjusted R2 value of 0.068, it means that the ability of the independent variable in explaining the variants of the dependent variable is still limited, which is 6.8%. The ANOVA test, which shows the possibility of using the regression model to predict the Fraudulent Financial Report, serves as the methodological tool of the study. It is determined that pressure with proxies of financial stability (current), external pressure (Lev), and financial target (ROA), opportunity with the nature of industry (receivable) proxy, and arrogance with managerial ownership (OM) proxy do not affect fraudulent financial reporting. The result of this research showed that rationalization variables proxy by the total accrual ratio and capability proxy by the change of directors had an influence on the fraudulent financial reporting. While the pressure variable proxy by financial stability measured with the current ratio, external pressure measured with leverage ratio, financial target measured with ROA, opportunity variable proxy by nature of industry variable measured with the change in inventory ratio, and arrogance proxy by ownership by management had no influence on financial statement fraud. The results obtained can be useful both for the management of the company and for regulatory authorities in terms of understanding the growth indicators of the financial statement fraud frequency and tools to minimize their impact. Keywords: fraud, fraud pentagon, fraudulent financial reporting, financial statement fraud, leverage ratio, managerial ownership and manufacturing sector.

scholarly journals Financial Statement Fraud Detection With Beneish M-Score and Dechow F-Score Model: An Empirical Analysis of Fraud Pentagon Theory in Indonesia

2020 ◽  
Vol 11 (6) ◽  
pp. 154
Author(s):  
Dwi Ratmono ◽  
Darsono Darsono ◽  
Nur Cahyonowati
Keyword(s):  
Empirical Evidence ◽  
Financial Reporting ◽  
Financial Stability ◽  
External Pressure ◽  
Financial Statement ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Financial Statement Fraud ◽  
Score Model ◽  
Ceo Narcissism

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.

scholarly journals ANALISIS FAKTOR-FAKTOR DALAM PERSPEKTIF FRAUD TRIANGLE SEBAGAI PREDIKTOR FRAUDULENT FINANCIAL REPORTING

2018 ◽  
pp. 251
Author(s):  
I Gusti Putu Oka Surya Utama ◽  
I Wayan Ramantha ◽  
I Dewa Nyoman Badera
Keyword(s):  
Organizational Structure ◽  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
Sampling Technique ◽  
External Pressure ◽  
Fraud Triangle ◽  
Fraudulent Financial Reporting ◽  
Financial Need ◽  
Positive Effect

The reduction of financial reporting information’s quality is caused by management fraud behavior by manipulate the financial reporting in order to looks good. This research aims to obtain empirical evidence the effect of fraud triangle factors are financial stability, external pressure, personal financial need, financial targets, nature of industry, ineffective monitoring, organizational structure, and auditor switching to fraudulent financial reporting in nonfinancial companies which listed in Indonesia Stock Exchange period 2012-2014. The sample determined by utilizing purposive sampling technique, therefore as many as 156 of observation sample was obtained. The data observed by logistic regression analysis method. The results show that pressure element these are financial stability, external pressure, and personal financial need has a positive effect to fraudulent financial reporting. Opportunity element these are organizational structure has a negative effect to fraudulent financial reporting. Rationalization element, auditors switching has a positive effect to fraudulent financial reporting. Meanwhile financial targets, nature of industry, and ineffective monitoring have no effect.

scholarly journals DETECTION ANALYSIS ON FRAUDULENT FINANCIAL REPORTING USING FRAUD SCORE MODEL

2019 ◽  
Vol 4 (2) ◽  
pp. 161
Author(s):  
Puput Ade Irawan ◽  
Dewi Susilowati ◽  
Novita Puspasari
Keyword(s):  
Financial Reporting ◽  
Financial Stability ◽  
Stock Exchange ◽  
Financial Statements ◽  
External Pressure ◽  
Manufacturing Companies ◽  
Fraudulent Financial Reporting ◽  
Analysis Model ◽  
Detection Analysis ◽  
Fraudulent Financial Statements

This study aims to examine the elements of fraud in the fraud diamond theory. Fraud is proxied by seven variables consisting of three pressure elements namely financial target, financial stability, external pressure, two variables of opportunity element, namely effective monitoring and nature of industry, one variable from the rationalization element, namely change in auditor, one variable from capability element namely change in directors, which is hypothesized to affect financial statements fraud. This study uses earnings management to see the potential for fraudulent financial statements. Earning management is measured using the F-Score indicator. The research sample was selected using a purposive sampling method from 30 manufacturing companies and a research period of 5 years to obtain the number of sample units of 155 data which is listed on the Indonesia Stock Exchange (IDX) for the period of 2013 to 2017. The hypothesis testing used a multiple regression analysis model using SPSS 23. The results of the study indicate that financial targets and changes in auditor financial stability have a significant positive effect on fraudulent financial statements. While external pressure, effective monitoring, nature of industry, financial stability, change of directors, have no effect on financial statements fraud.

Fraudulent Financial Reporting: An Application of Fraud Pentagon Theory to Association of Southeast Asian Nations Corporate Governance Scorecard

2019 ◽  
Vol 9 (5) ◽  
pp. 1729 ◽  
Author(s):  
Imang Dapit PAMUNGKAS ◽  
St. Dwiarso UTOMO
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Financial Stability ◽  
Sampling Technique ◽  
External Pressure ◽  
Managerial Ownership ◽  
Fraudulent Financial Reporting ◽  
Audit Opinion ◽  
Opinion Change ◽  
Insignificant Effect

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.

scholarly journals Fraudulent Financial Reporting Based of Fraud Diamond Theory: A Study of the Banking Sector in Indonesia

2019 ◽  
Vol 4 (2) ◽  
pp. 135-150
Author(s):  
Tarmizi Achmad ◽  
Imang Dapit Pamungkas
Keyword(s):  
Regression Analysis ◽  
Financial Reporting ◽  
Financial Stability ◽  
Banking Sector ◽  
Negative Impact ◽  
Total Sample ◽  
External Pressure ◽  
Fraudulent Financial Reporting ◽  
External Variables ◽  
Positive Effect

The research aims to analyse whether external pressure, financial stability, financial targets, ineffective monitoring, rationalization and capability effect on fraudulent financial reporting. The population this study is banking company listed on the Indonesia Sctock Exchange with a total sample of 87 banking companies in 2011-2016. Based on the results of research using regression analysis, only external variables of incentive and financial targets have a positive effect on fraudulent financial reporting. Meanwhile, financial stability and capability have a negative impact on fraudulent financial reporting. Further, other variables such as ineffective monitoring and rationalization do not affect fraudulent financial reporting.

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