How Does Corporate Governance Influence Fraud Practices?

Abstract

The distinction between wealth and its owner raises the issue of agency. Financial statement fraud is one form of the agency's problem. It has been demonstrated that financial statement fraud has a negative impact on firms and the economy. According to previous research, excellent corporate governance can help prevent financial statement fraud. This study tries to demonstrate that company governance influences financial statement fraud. Financial statement fraud is measured using the Dechow Fscore, a predictive model for the occurrence of fraud. The ASEAN Corporate Governance Scorecard (ACGS) is a tool for evaluating corporate governance (ACGS). The ACGS is a tool for monitoring the implementation of corporate governance in ASEAN nations. This study focuses on non-financial companies listed on the Indonesia Stock Exchange in 2018. According to the findings of this study, corporate governance as judged by ACGS has a considerable negative impact on the risk that nonfinancial organizations will conduct financial statement fraud.