Abstract
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
Highlights
Financial statements are issued by companies to present financial information that is useful for decision-makers
This study aims to analyze the effect of fraud pentagon on fraudulent financial statements with audit committee as moderating variable
Based on the survey conducted by Association of Certified Fraud Examiners (ACFE) in 2018, the fraudulent financial statement gives the largest loss impact compared to other types of fraud, amounting to $800,000
Summary
Financial statements are issued by companies to present financial information that is useful for decision-makers. Companies present financial statements honestly and fairly in accordance with the corporate actual position. The financial statements presented by companies sometimes contain misstatements. Based on the survey conducted by ACFE in 2018, the fraudulent financial statement gives the largest loss impact compared to other types of fraud, amounting to $800,000. The property, real estate, and construction sectors are some of the sectors that are vulnerable to fraudulent financial statement practices. The fraudulent financial statement practice was committed
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
