Does Financial Reporting Quality Moderate Factors Affecting Fraud Tendency?

Abstract

This research examines the influence of Narcissism, Board of Directors Bonus Scheme, Age, Gender and Term of Service with the moderating variable of Financial Reporting Quality on the tendency to commit fraud. Research respondents are CEOs of banks listed on the Indonesia Stock Exchange in 2015-2018 and the sampling technique uses the Purposive Sampling method. This study uses statistical regression analysis to see the effect of the independent variable on the dependent variable or the response to the moderating variable. The regression parameter test consists of the F test, to find out whether the independent variable has a simultaneous effect on the response variable or not. Then the t test, to test the effect of the independent variables one by one on the response variable. By using panel data regression modeling using an unweighted Fixed Effect Model and a weighted Fixed Effect Model, also using partial testing on the unweighted Fixed Effect model and the weighted Fixed Effect model. The results showed that panel data regression modeling using the unweighted Fixed Effect Model resulted in a significant simultaneous test, meaning that the variables of narcissism, directors' bonus scheme, age, gender and tenure affect the tendency to commit fraud simultaneously. Partial testing on the unweighted Fixed Effect model shows that individually only the tenure of service variable affects the tendency to commit fraud. The Fixed Effect Model with weights produces significant simultaneous tests, meaning that simultaneously the variables of narcissism, directors' bonus scheme, age, gender and years of service affect the tendency to commit fraud. And a partial test on the Fixed Effect model with weights shows that individually there are no independent variables that affect the tendency to commit fraud.