Detecting fraudulent financial statements in pharmaceutical companies: Fraud pentagon theory perspective

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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Impact of IFRS (9) on the size of loan loss provisions: An applied study on Jordanian commercial banks during 2015-2019

Accounting ◽

10.5267/j.ac.2021.5.010 ◽

2021 ◽

Vol 7 (7) ◽

pp. 1601-1610

Author(s):

Sa’ad A. Al-Sakini ◽

Hanan Al Awawdeh ◽

Ismail Al Awamleh ◽

Adel Mohammed Qatawneh

Keyword(s):

Stock Exchange ◽

Sampling Technique ◽

Financial Statements ◽

Public Image ◽

Pharmaceutical Companies ◽

Loan Loss ◽

Financial Reports ◽

External Auditors ◽

Financial Need ◽

Fraudulent Financial Statements

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Analysis of the Effect of Fraud Pentagon Factors on Fraudulent Financial Statement with Audit Committee as Moderating Variable

Accounting Analysis Journal ◽

10.15294/aaj.v10i1.44520 ◽

2021 ◽

Vol 10 (1) ◽

pp. 39-46

Author(s):

Krisna Dewi ◽

Indah Anisykurlillah

Keyword(s):

Audit Committee ◽

Stock Exchange ◽

Sampling Technique ◽

Financial Statements ◽

Financial Statement ◽

Ceo Duality ◽

External Auditors ◽

Company Growth ◽

Fraudulent Financial Statements

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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PENGARUH FRAUD PENTAGON TERHADAP FRAUDULENT FINANCIAL STATEMENTS PADA PERUSAHAAN PERBANKAN YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2015-2017

Jurnal Akuntansi Trisakti ◽

10.25105/jat.v6i1.5274 ◽

2019 ◽

Vol 6 (1) ◽

pp. 141

Author(s):

Mega Indah Lestari ◽

Deliza Henny

Keyword(s):

Financial Stability ◽

Sampling Method ◽

Annual Report ◽

Stock Exchange ◽

Secondary Data ◽

Sampling Technique ◽

Financial Statements ◽

Analysis Method ◽

Financial Report ◽

Fraudulent Financial Statements

The Objective of this research is to analyze the factors of financial report fraud with pentagon fraud analysis. This research uses six independent variables which is pressure used financial target and financial stability as proxy, opportunity with proxy ineffective monitoring, rationalization with change in auditor as proxy, capability with proxy of CEO’s education, and arrogance with proxy frequent number of CEO’s picture, while the dependent variable is fraudulent financial statements proxied by restatement of financial statements. This research uses secondary data that is financial report and annual report. The sample of this study is 110 samples from financial statements of financial companies listed in the Indonesia Stock Exchange (BEI) during the 2015-2017 period. Sampling technique used is purposive sampling method. The method of analysis in this study uses logistic regression analysis method.The results of this research shows that the financial stability variable and ineffective monitoring are significant in detecting fraudulent financial statements. While financial targets variable, auditor’s change variable, CEO’s education variable, and frequent number of CEO’s picture are not significant in detecting fraudulent financial statements.

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ANALISIS FRAUD PENTAGON TERHADAP KECURANGAN LAPORAN KEUANGAN PADA SEKTOR PERUSAHAN MANUFAKTUR YANG TERDAFTAR Di BURSA EFEK INDONESIA

Jurnal Ilmiah Manajemen Ubhara ◽

10.31599/jmu.v3i1.861 ◽

2021 ◽

Vol 3 (1) ◽

pp. 153

Author(s):

Delviana Dama Yanti

Keyword(s):

Linear Regression Analysis ◽

Sampling Technique ◽

Financial Statements ◽

Manufacturing Companies ◽

Public Accounting ◽

Accounting Firms ◽

External Auditors ◽

Public Accounting Firms ◽

Fraudulent Financial Statements

ABSTRACT The purpose of this research is see the effect of pentagon fraud proxied by financial targets, nature of the industry, quality of external auditors, change of auditors, number of CEOs who frequently detect fraud in financial statements. Financial statement fraud in this study was measured using the proxies of Return on Assets, Receivables, selection of audit services at public accounting firms, changes in public accounting firms, changes in directors, and the number of CEO photos. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange (BEI) in 2017-2019. This study uses a purposive sampling technique so, there are 48 financial reports from 25 manufacturing companies. The analytical method used is multiple linear regression analysis with SPSS version 20. The results of this study indicate that financial targets, nature of industry, quality of external auditors and the number of CEOs who often do not have a significant effect in the handling of fraudulent financial statements. Meanwhile, changes in auditors and changes in direction have a significant effect on fraudulent financial statements

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The Influence of KAP Size, Institutional Ownership, and Audit Committee on The Quality of Financial Statements

ECONOMICS & ACCOUNTING JOURNAL ◽

10.32493/eaj.v4i1.y2021.p82-92 ◽

2021 ◽

Vol 4 (1) ◽

pp. 82

Author(s):

Adris Kuncoro ◽

Dhini Suryandari

Keyword(s):

Audit Committee ◽

Stock Exchange ◽

Sampling Technique ◽

Institutional Ownership ◽

Financial Statements ◽

Financial Reports ◽

The Relationship ◽

Positive Effect ◽

Descriptive Statistical Analysis

This research aims to examine the relationship between KAP size, institutional ownership, and the audit committee on the quality of financial reports. 616 Indonesian Stock Exchange (IDX) companies in 2018 became the population in this study. Purposive sampling as a sampling technique resulted in 547companies. Using inferential logistic regression analysis and using descriptive statistical analysis hypothesis testing methods with IBM SPSS version 25 tools. This study found that the KAP size and the audit committee has a positive effect on the quality of financial reports. Institutional ownership does not affect the quality of financial reports. Simultaneously, KAP size, institutional ownership, and audit committee influence the quality of financial reports. This study concludes that partially, KAP size and audit committee has a positive effect on the quality of financial reports. Simultaneously, KAP size, institutional ownership, and audit committee affect the quality of financial reports. Further research suggests using other proxies, other periods, and other variables.

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DETECTION OF FRAUDULENT FINANCIAL STATEMENT THROUGH PENTAGON THEORY WITH AUDIT COMMITTEE AS MODERATING

ECONOMICS & ACCOUNTING JOURNAL ◽

10.32493/eaj.v4i1.y2021.p35-47 ◽

2021 ◽

Vol 4 (1) ◽

pp. 35

Author(s):

Ely Indriyani ◽

Dhini Suryandari

Keyword(s):

Regression Analysis ◽

Financial Stability ◽

Audit Committee ◽

Stock Exchange ◽

Sampling Technique ◽

Financial Statements ◽

Analysis Data ◽

External Pressure ◽

Analysis Technique ◽

Fraudulent Financial Statements

This study aims to examine financial targets, financial stability, external pressure, personal financial needs, effective monitoring, nature of industry, total accruals, change of directors, and CEO duality in detecting fraudulent financial statements with the audit committee as the moderating variable. The population of this research is 20 state-owned companies listed on the Indonesia Stock Exchange (BEI) in 2014-2018. Sampling using saturated sampling technique and obtained a final sample of 100 units of analysis. Data collection using documentation techniques. The data analysis technique used regression analysis and Moderated Regression Analysis (MRA). The results of this study indicate that external pressure and the nature of industry have a significant positive effect on the detection of fraudulent financial statements. The audit committee is able to moderate the influence of financial targets, external pressure, nature of industry, and change of directors on the detection of fraudulent financial statements

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Dewan Komisaris Independen dan Komite Audit sebagai Faktor yang Menentukan Kinerja Keuangan Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2013-2017

JURNAL PUNDI ◽

10.31575/jp.v4i1.220 ◽

2020 ◽

Vol 4 (1) ◽

Author(s):

Aminar Sutra Dewi ◽

Ronal Trio Fernando

Keyword(s):

Regression Analysis ◽

Financial Performance ◽

Audit Committee ◽

Stock Exchange ◽

Sampling Technique ◽

Financial Statements ◽

Audit Committees ◽

Analysis Method ◽

Financial Reports

The purpose of this study is to discover the role of independent commissioners and audit committees to improve financial performance both simultaneously and in part. The paper objects used were all companies listed on the Indonesia Stock Exchange from 2013 to 2017, using a purposive sampling technique. Data on the company's annual financial statements and annual financial reports are obtained from the official website of the IDX. This paper was added in the study. The data analysis method used in this update is regression analysis in the data panel. This study uses the transition from Good Corporate Gorvernance, an independent board of commissioners and an audit board as an audit measure in this study. The results showed that the simultaneous independent board of commissioners had a significant effect on financial performance (ROA, ROE). The audit committee has a negative and not significant effect on financial performance (ROA, ROE).

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ANALISIS PENGARUH FRAUD DIAMOND DAN GOOD CORPORATE GOVERNANCE DALAM MENDETEKSI KEMUNGKINAN TERJADINYA FRAUDULENT FINANCIAL STATEMENT

Jurnal Bina Akuntansi ◽

10.52859/jba.v7i2.93 ◽

2020 ◽

Vol 7 (2) ◽

pp. 175-207

Author(s):

Sugi Suhartono

Keyword(s):

Corporate Governance ◽

Financial Stability ◽

Stock Exchange ◽

Financial Statements ◽

External Pressure ◽

Manufacturing Companies ◽

Good Corporate Governance ◽

Negative Effect ◽

Financial Need ◽

Fraudulent Financial Statements

In the financial statements there is a possibility of misstatements in the presentation of company’s financial statements relating to errors or fraud made or caused by managers in the company. Misrepresentation in financial statements causes a decrease in the level of trust of users of financial statements and can harm stakeholders. The theories underlying this research include agency theory, fraud diamond, and good corporate governance. The research sample consisted of 46 manufacturing companies listed on the Stock Exchange in the period 2015-2017. Sampling is done by purposive sampling method. Hypothesis testing uses analysis of descriptive statistics, pooling test, independent sample t-test and logistic regression analysis. The results of this study indicate that financial stability, nature of industry, rationalization, and capability have a positive effect on the possibility of fraudulent financial statements. Whereas female on board has a negative effect on the possibility of fraudulent financial statements. But external pressure, personal financial need, effective monitoring and independent board of commissioners are not proven to have effect on the possibility of fraudulent financial statements.

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Pengujian Fraud Diamond Theory Pada Indikasi Financial Statement Fraud Di Indonesia

E-Jurnal Akuntansi ◽

10.24843/eja.2020.v30.i06.p08 ◽

2020 ◽

Vol 30 (6) ◽

pp. 1441

Author(s):

Ni Kadek Suparmini ◽

Dodik Ariyanto ◽

I Made Andika Pradnyana Wistawan

Keyword(s):

Stock Exchange ◽

Sampling Technique ◽

Financial Statements ◽

Financial Statement ◽

Determination Method ◽

Manufacturing Companies ◽

Financial Statement Fraud ◽

Analysis Technique ◽

Negative Effect ◽

Financial Need

This study aims to obtain empirical evidence of fraud diamond theory. This research was conducted on manufacturing companies listed on the Indonesia Stock Exchange (BEI) for the 2015-2017 period. The sample determination method used is nonprobability sampling with purposive sampling technique. There are 145 companies as a population with a total of 66 companies as samples. The data analysis technique used is multiple linear regression. Based on the results of the analysis, it was stated that the nature of industry had a negative effect on indications of financial statement fraud while financial need, auditor firm size, and change of directors had no effect on indications of financial statement fraud. This study has implications for shareholders, regulators, or parties who use information in financial statements as a consideration in providing an assessment of the chances of fraudulent actions on the company's financial statements. Keywords: Diamond Fraud; Financial Statement Fraud.

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FRAUDULENT FINANCIAL REPORTING: A PENTAGON FRAUD ANALYSIS

Jurnal Ilmiah Ekonomi Dan Bisnis ◽

10.31849/jieb.v16i2.2678 ◽

2019 ◽

Vol 16 (2) ◽

pp. 122-134

Author(s):

Satria tri Nanda ◽

Neneng Salmiah ◽

Dina Mulyana

Keyword(s):

Financial Reporting ◽

Financial Stability ◽

Stock Exchange ◽

Secondary Data ◽

Financial Statements ◽

Annual Reports ◽

Manufacturing Companies ◽

Fraudulent Financial Reporting ◽

Financial Reports ◽

Fraudulent Financial Statements

Financial statements describe the company's financial condition. There are many gaps in the financial reports that enable management to commit fraudulent financial reporting. This study purpose to analyze the pentagon fraud, namely the pressure that is proxied by the financial target, the opportunity that is proxied by the effectiveness of monitoring (ineffective monitoring); Rationalization which is proxied by change in auditor; Competence which is proxied by the change of company directors; and Arrogance which is proxied by the number of CEO images that appear (number of CEO's picture), detects fraudulent financial statements measured using the Altman Z Score. The sample used in this study were 24 pharmaceutical sub-sector manufacturing companies registered on the Indonesia Stock Exchange during the period 2015 until 2017. The type of data used is secondary data obtained from annual reports and company financial statements for the 2015-2017 period. The analysis of the data used is multiple regression using the SPSS version 16. This study found that financial stability and ineffective monitoring influence fraudulent financial statements. Whereas auditor turnover, change of directors and the number of CEO photos that appear do not affect fraudulent financial statements.

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