Pentagon fraud model and financial statement fraud: The moderating role of Islamic corporate governance
The study aims to investigate the impact of Pentagon Fraud Model in five key factors, namely Pressure, Opportunity, Rationalization, Capability, and Action, on the risk of Financial Statement Fraud (FSF). Additionally, it explores the moderating role of Islamic Corporate Governance (ICG) in...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2024-01-01
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| Series: | International Journal of Data and Network Science |
| Online Access: | http://www.growingscience.com/ijds/Vol8/ijdns_2023_205.pdf |
| Summary: | The study aims to investigate the impact of Pentagon Fraud Model in five key factors, namely Pressure, Opportunity, Rationalization, Capability, and Action, on the risk of Financial Statement Fraud (FSF). Additionally, it explores the moderating role of Islamic Corporate Governance (ICG) in the relationship between these factors and FSF. The research employed a quantitative approach, utilizing survey data from a sample of 270 respondents. The findings support the hypotheses that all five factors significantly influence FSF, with Pressure exerting the highest impact. Furthermore, ICG is found to moderate the relationships between these factors and FSF, underscoring its role in reducing financial fraud risk. Practically, this study offers essential guidance for organizations in managing FSF risks more effectively. Integrating ethical and governance principles, as moderated by ICG, can help strengthen internal controls, ethics training, and a culture of integrity. Policymakers should consider these findings for enhancing regulatory frameworks, and educational institutions can integrate these results into their curriculum. The study's contribution lies in shedding light on the significance of ICG as a risk-mitigating factor in the context of FSF. The findings provide valuable insights for academics, practitioners, and policymakers. They enhance the understanding of FSF and its mitigating measures and offer a foundation for further research in the field. |
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| ISSN: | 2561-8148 2561-8156 |