Fraud Pentagon for Detecting Financial Statement Fraud
A financial statement is a result of financial reporting that describes the results of an entity’s financial performance for a specified period. Financial statements can also cause managers in an entity to commit financial reporting fraud because they want to describe an excellent financial performa...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE)
2020-03-01
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| Series: | Journal of Economics, Business & Accountancy |
| Subjects: | |
| Online Access: | https://journal.perbanas.ac.id/index.php/jebav/article/view/1788 |
| _version_ | 1818232508274180096 |
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| author | Ananda Putra Nindhita Aulia Haqq Gideon Setyo Budiwitjaksono |
| author_facet | Ananda Putra Nindhita Aulia Haqq Gideon Setyo Budiwitjaksono |
| author_sort | Ananda Putra Nindhita Aulia Haqq |
| collection | DOAJ |
| description | A financial statement is a result of financial reporting that describes the results of an entity’s financial performance for a specified period. Financial statements can also cause managers in an entity to commit financial reporting fraud because they want to describe an excellent financial performance. This study aims to test fraud pentagon theory in detecting fraudulent financial reporting. More specifically, this study attempts to test the financial target, financial stability, external pressure, ineffective monitoring, nature of the industry, change in auditor, change in director, CEOs photo frequency, political connection, and company existence against fraudulence in the companies' financial reporting. These companies are classified in the LQ45 index on the Indonesian Stock Exchange (IDX) during the period 2015-2017. It used 78 annual report data taken by a proportional random sampling based on the number of proportions in each sector of the company. The data were analyzed using multiple regression analysis. The results indicate that financial stability and CEO photo frequency can be used to detect fraudulence in financial reporting. However, financial targets, external pressure, ineffective monitoring, nature of the industry, changes in auditor, changes in director, political connection, and company existence cannot be used to detect fraudulence in financial reporting. |
| first_indexed | 2024-12-12T11:07:24Z |
| format | Article |
| id | doaj.art-aae99f9c00cb4fc086c7a79091d670b9 |
| institution | Directory Open Access Journal |
| issn | 2087-3735 2088-785X |
| language | English |
| last_indexed | 2024-12-12T11:07:24Z |
| publishDate | 2020-03-01 |
| publisher | Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE) |
| record_format | Article |
| series | Journal of Economics, Business & Accountancy |
| spelling | doaj.art-aae99f9c00cb4fc086c7a79091d670b92022-12-22T00:26:22ZengPusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE)Journal of Economics, Business & Accountancy2087-37352088-785X2020-03-01223319332http://dx.doi.org/10.14414/jebav.v22i3.1788Fraud Pentagon for Detecting Financial Statement FraudAnanda Putra Nindhita Aulia Haqq0Gideon Setyo Budiwitjaksono1Universitas Pembangunan Nasional “Veteran” Jawa TimurUniversitas Pembangunan Nasional “Veteran” Jawa TimurA financial statement is a result of financial reporting that describes the results of an entity’s financial performance for a specified period. Financial statements can also cause managers in an entity to commit financial reporting fraud because they want to describe an excellent financial performance. This study aims to test fraud pentagon theory in detecting fraudulent financial reporting. More specifically, this study attempts to test the financial target, financial stability, external pressure, ineffective monitoring, nature of the industry, change in auditor, change in director, CEOs photo frequency, political connection, and company existence against fraudulence in the companies' financial reporting. These companies are classified in the LQ45 index on the Indonesian Stock Exchange (IDX) during the period 2015-2017. It used 78 annual report data taken by a proportional random sampling based on the number of proportions in each sector of the company. The data were analyzed using multiple regression analysis. The results indicate that financial stability and CEO photo frequency can be used to detect fraudulence in financial reporting. However, financial targets, external pressure, ineffective monitoring, nature of the industry, changes in auditor, changes in director, political connection, and company existence cannot be used to detect fraudulence in financial reporting.https://journal.perbanas.ac.id/index.php/jebav/article/view/1788fraud pentagonfinancial reportingagency theoryaccrual quality |
| spellingShingle | Ananda Putra Nindhita Aulia Haqq Gideon Setyo Budiwitjaksono Fraud Pentagon for Detecting Financial Statement Fraud Journal of Economics, Business & Accountancy fraud pentagon financial reporting agency theory accrual quality |
| title | Fraud Pentagon for Detecting Financial Statement Fraud |
| title_full | Fraud Pentagon for Detecting Financial Statement Fraud |
| title_fullStr | Fraud Pentagon for Detecting Financial Statement Fraud |
| title_full_unstemmed | Fraud Pentagon for Detecting Financial Statement Fraud |
| title_short | Fraud Pentagon for Detecting Financial Statement Fraud |
| title_sort | fraud pentagon for detecting financial statement fraud |
| topic | fraud pentagon financial reporting agency theory accrual quality |
| url | https://journal.perbanas.ac.id/index.php/jebav/article/view/1788 |
| work_keys_str_mv | AT anandaputranindhitaauliahaqq fraudpentagonfordetectingfinancialstatementfraud AT gideonsetyobudiwitjaksono fraudpentagonfordetectingfinancialstatementfraud |