Articles

Fraudulanet Financial Reporting Using Fraud Pentagon Model: Evidence form the State-Owned Companies in Indonesia

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Financial statement fraud has the highest number of losses among all fraud types. In addition to harming finances of a company, false financial reports could risk the viability of the business. In the corporate sector, fraud results in losses of trillions of rupiah. This study uses the fraud pentagon theory to investigate the relationship between fraudulent financial reporting and pressure, opportunity, rationalization, competence, and arrogance. This study applied quantitative method and causally associative approach. This research using secondary data from financial reports that were obtained through the Indonesia Stock Exchanges (IDX) official website. The state-owned companies (BUMN) listed on IDX 2018-2023 period comprise the study population, and purposive sampling method used to determine sample size. One hundred eighty samples from thirty BUMN as result of the sample selection. The study method of data analysis is the Random Effect Model (REM) with EViews 13. The result of this research indicate that return on assets (ROA), and change in auditor (AUDCHANGE) has significant positive effect on fraudulent financial reporting (FFR). In contrast, ineffective monitoring (BDOUT), change in director (DCHANGE), and number of CEO picture (FCEO) did not significant effect on FFR in state-owned companies. This research can contribute to the advancement of current theories and offer companies resources to lower the risk of fraud. This research advances audit company best practices for enhancing companies auditing efficacy in lowering financial reporting fraud.

Analysis of Vousinas Fraud Hexagon Theory on the Detection of Financial Statement Fraud in Service Companies Listed on Indonesia Stock Exchange (IDX) 2018-2022

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The aims of this research was to identify and determine the influence of financial targets, external auditor quality, total accruals to total assets, CEO educational background, managerial ownership, political relations, and cooperation with government projects on financial statement fraud in Infrastructure, Utilities and Transportation Sector Service Companies Listed on the IDX 2018-2022, both partial and simultaneous influence, also moderated influence by internal control system. This research is explanatory research design with the sampling technique used purposive sampling. The population in this research is companies in infrastructure, utility and transportation sector listed on IDX with total 79companies. The research sample was obtained with total 44 companies. The type of data used is secondary data with data analysis techniques used panel data regression models and moderated regression analysis (MRA) through Eviews 10 software. This research found that Financial Target, External Auditor Quality, CEO Educational Background, Political Connection have a significant effect on Financial Statement Fraud in Infrastructure, Utilities and Transportation Sector Companies listed on the IDX. While Total Accrual to Total Asset, Managerial Ownership, and Cooperation with Government Project have no influence on Financial Statement Fraud. This study also found that Internal Control is able to moderates the relationship between Return on Asset, External Auditor Quality, Total Accrual to Total Asset, CEO Educational Background, Managerial Ownership, Cooperation with Government Project and Financial Statement Fraud in Infrastructure, Utilities and Transportation Sector Service Companies listed on the IDX.