Do The Fraud Triangle Components Motivate Fraud In Indonesia? (original) (raw)
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The purpose of this research is to determine the impact of the fraud triangle on false financial reporting. The researcher employs five independent factors: financial goal, financial stability, auditor change, ineffective monitoring, and external pressure, as well as one dependent variable, namely false financial reporting. A quantitative technique was applied in this investigation. Secondary data sources were gathered from the financial statements of banking businesses listed on the IDX. This research consists of all banking businesses listed on the IDX from 2016 through 2020. According to the findings of this study, the approach for collecting samples employs the purposive sampling method. The data analysis approach used was logistic regression analysis. Data analysis techniques are carried out through analysis logistic regression. This study uses the Beneish M-Score formula as a calculation model which was then processed using the IBM SPSS Statistics 20 program. Results obtained on this research is (1) Financial Stability does not affect Fraudulent Financial Reporting, (2) External Pressre has no effect on Fraudulent Financial Reporting, (3) Financial Target has no effect on Fraudulent Financial Reporting, (4) Change in Auditor does not affect Fraudulent Financial Reporting, (5) Ineffective Monitoring does not affect Fraudulent Financial Reporting.
Proceedings of the Proceedings of The 2nd International Conference On Advance And Scientific Innovation, ICASI 2019, 18 July, Banda Aceh, Indonesia
The purpose of this study is to explain the factors that influence fraudulent financial statements in Indonesian banks. This research takes the banking sector into consideration that banking is one of the industries or the most vulnerable institutions for financial incidents due to the many regulations and financial transactions that occur in the banking sector. This study uses banking data from 2014-2017 with a total sample of 90 banks. Data analysis techniques are carried out using multiple regression analysis. The results show that the pressure proxied by external pressure, which is proxied by free cash flow, has a positive effect on fraudulent financial statements, which means that the greater the free cash flow of the banking sector, the greater the likelihood of fraudulent financial statements. Whereas pressure proxied by financial stability, financial targets, and ineffective monitoring and rationalization and good governance have no effect on fraudulent financial statements.
International Journal of Financial Research, 2020
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...
Financial Statement Fraud Risk Factors of Fraud Triangle: Evidence From Indonesia
International Journal of Financial Research, 2020
The purpose of this study is to examine the risk factors that influencing financial statement fraud. Especially, it examines the influence of rationalization, pressure, and opportunity on the fraudulent financial statements and also examines the interaction effect of industry risk and company size on the relationship between rationalization, pressure, and opportunity on financial statement fraud. Secondary data were collected from Bloemberg Data Base, IDX and OJK RI. The population in this study is companies listed on the Indonesia Stock Exchange in the moving year from 2011 to 2017 and the sample was selected by companies that indicated financial statement fraud and those that did not indicate financial statement fraud. The company indicated by Fraud was collected from Bapepam and OJK RI. Data were tested using logistic regression analysis and different T-tests of 28 committed fraud companies and 28 companies that did not commit fraud. The results showed that only some variables ha...
This research aimed to get empirical evidence in detecting financial statement fraud with fraud perspective diamond. Research by Sihombing (2014) explained that diamond fraud is an outlook and new concepts about the phenomenon of fraud raised by Wolfe and Hermanson (2004). Proxy variables of this research using pressure that is proxied by financial stability, external pressure, and financial targets; opportunity is proxied by ineffective monitoring and nature of the industry; rationalization is proxied by the turn of the auditor and capability is proxied by the change of directors. This research examined the empirical evidence to detect financial statement fraud with fraud perspective diamond. This study refers to the banking company listed in Indonesia Stock Exchange. The results of this research indicate that the variable pressure is proxied by financial stability, external pressure, and financial targets; Opportunity is proxied by ineffective monitoring and nature of the industry...
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This research aims at finding out the influence of factors in fraud triangle theory towards fraudulent financial reporting in banking companies in Indonesia. Research sample was chosen by using some criteria that consist of banking sector companies registered and listed in Indonesian Stock Exchange & Bank Based on Business Activity II, III, IV group from 2017 to 2019. These criteria chose 37 banks as sample processed by e-Views 12 and Microsoft Excel application. Fraud triangle theory divides three fraud factors: pressure, opportunity, and rationalization. Pressure factor includes external pressure and financial target. Opportunity factor is reflected by monitoring variable, and rationalization factor consists of auditor change and accrual method variable. Research results show that independent variables gave significant impact to dependent variable, except for monitoring and auditor change variable.
Journal of Islamic Accounting and Finance Research, 2020
Purpose - The purpose of study was to examine the effect financial statement fraud based on the fraud triangle with a number of variables such as financial stability, external pressure, financial target, personal financial needs, opportunity and rasionalization in companies listed in Jakarta Islamic Index (JII) period 2012-2018.Method - The population are all companies listed in JII period 2012-2018. The sample is 6 companies that were feasible to analyze. The data used in this research is secondary data obtained from the annual report. The data analysis model applied multiple linier regression data panel using SPSS 25.Result - The results showed that the fraud triangle in the categories of financial stability, external pressure, financial targets, personal financial needs, opportunity and rationalization simultaneously affect the fraudulent financial statements. Furthermore financial stability, personal financial needs and opportunity partially negatively related and had no signif...
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This study is conducted to analyse the factors affecting financial statement fraud in construction companies listed in the Indonesian Stock Exchange during the period of 2010-2014 using the four elements of the fraud diamond perspective by Wolfe and Hermanson (2004). There are 30 companies observed, examined through four independent variables such as, return on assets from financial target pressure, reception to industry opportunity, auditor change from auditor rationalization, and change in directors from management capability towards dependent variable, discretionary accruals from financial statement fraud. Hypothesis testing is carried using multiple linear regression.The analysis results showed that only industry opportunity which is proxied by reception had a significant effect in financial statement fraud. Meanwhile, the other three variables: pressure which is proxied by return on asset, rationalization which is proxied by change in auditor, and capability which is proxied by...
Proceedings of the 3rd International Conference on Banking, Accounting, Management and Economics (ICOBAME 2020), 2020
This study aims to analyze the effect of pressure, opportunity, rationalization, capability, arrogance on fraudulent financial reporting. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange. The results showed that financial stability pressures, industrial conditions had a positive and significant effect on fraudulent financial reporting, while the change of directors had a significant negative effect on fraudulent financial reporting. Financial stability pressures will tend to create fraudulent financial reporting and the capability to change directors can prevent fraudulent financial reporting. Financial target pressures, external pressures, institutional ownership, effectiveness of supervision, industrial conditions, changes in auditors, total accruals and arrogance do not have a significant effect on fraudulent financial reporting.
Detecting Fraud Financial Statements in Manufacturing Companies Indonesia
Jemasi: Jurnal Ekonomi Manajemen dan Akuntansi
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 th...