Detecting of Financial Statements Fraud Using Beneish M-Score Model and F Score Model

Abstract

This study aims to analyze and test the use of the Beneish M-Score model and the F score model to detect financial statements fraud. The Beneish model is the mathematical model that identifies the manipulation of earnings through financial ratios. The data used is secondary data in the form of financial reports of manufacturing companies listed on the Indonesian Stock Exchange. The research method used is a quantitative method. The discriminant analysis method is used to analyze the relationship between the Beneish M-Score and F-Score models with financial statement fraud. The Beneish M-Score model and the F-Score model are tested empirically to evaluate the relationship and significance of the two models with financial statement fraud. The application of discriminant analysis is carried out to test which independent variable can accurately distinguish between samples of financial reports that are suspected of being manipulated and those that are suspected of not being manipulated. The test results show that both models are proven to be effective and have a strong positive correlation to financial statement fraud.