Fraudulent Financial Reporting Research Articles

Earnings manipulation behavior in the banking industry of Bangladesh: the strategical implication of Beneish M-score model

PurposeThis study aims to determine the number of companies involved in earnings manipulation. Additionally, this study has empirically investigated the common manipulation items among the companies.Design/methodology/approachBangladesh's listed commercial banks are selected as a sample for this study, and financial data from 2009 to 2018 were collected. The likely and nonlikely manipulator Beneish model (1999) divides the sample into two groups. Based on the M-score of the model, the banks are put into two groups. To identify the most influential variables, an independent samplet-test was done with the help of Statistical Package for Social Sciences (SPSS).FindingsThe findings show that banks in Bangladesh have an unstable trend in making manipulated financial reports. Results of thet-test reveal that overstating revenues, increasing intangible assets, lessening cost and accruals are the most appealing items for preparing a fraudulent financial report. The findings of this research work will help the investors take the right decision having the idea of manipulation in the banking sector of Bangladesh.Originality/valueIn the presence of many irregularities in the banking sector Bangladesh, very few studies have been carried out in forensic accounting and fraudulent financial reporting practices. Much research has focused on earnings management techniques. This research specifically focuses on identifying earnings manipulation in financial statements for micro-level variables like accounting accruals, intangible assets, etc. This will help policy-makers and financial statement readers to be proactive while reading financial statements and taking any investment decision.

TANGGUNG JAWAB HUKUM DIREKSI TERHADAP KERUGIAN PERUSAHAAN DALAM PENGURUSAN PERSEROAN TERBATAS

The Board of Directors as the organ of the PT is to represent the interests of the PT as an independent legal subject. This is because PT is the cause of the existence (raison d'etre) of the board of directors, because if there is no PT, then the board of directors will never exist. The problems that will be examined are 1. Why do losses occur in the company due to the management of PT?, 2. What is the role of the Board of Directors in managing company losses in the management of a limited liability company? The research method used is normative juridical. The occurrence of losses in the management of PT is caused by froud carried out by the directors, Fraudulent Financial Reporting, Company errors, the Company does not yet have legal instruments in the form of work management. Abuse of Authority of the Board of Directors. The role of the Board of Directors on company losses in managing a limited liability company as described and described, their duties as management of the company have the authority determined and limited by: 1. Legal provisions (Law No. 40 of 2007 and other related laws); 2. Company's Articles of Association; 3. GMS (General Meeting of Shareholders); 4. The “Ultra Virres” Doctrine; 5. Fiduciary Duty Principle. A Director who acts outside the provisions and limitations above, means that he has departed from the legal principle of representation and is qualified to have committed an act of abuse of authority

Risk Management and other Factors Preventing Fraudulent Financial Reporting by State-Owned Enterprises in Indonesia

This study aims to provide an overview of the effects of risk management and the implementation of good corporate governance (GCG), and the effectiveness of the internal audit function on the prevention of fraudulent financial reporting and its impact on the quality of financial reporting of state-owned enterprises (SOEs) in Indonesia. Questionnaires are used to determine risk management and other factors that influence each other and their impact on the quality of financial reporting. The questionnaire and survey results of 90 state-owned enterprises (BUMN) and 360 respondents. SEM-PLS was used to analyze the data, and the results show that the implementation of GCG, the effectiveness of the internal audit function and risk management have an effect on financial reporting. This is based on the results of research stating that the effectiveness of the internal audit function is able to prevent financial reporting fraud. The professionalism of the internal auditor, who must carry out audits in a correct and professional manner, demonstrates their credibility. This, and audit training, is often not optimal.

FRAUDULENT FINANCIAL REPORTING IN MALAYSIA: FROM FRAUD TRIANGLE THEORY PERSPECTIVE

Fraudulent financial reporting (FFR) activities have a negative impact on market value, companies' reputation, accounting profession credibility, and loss of investors' confidence in financial statements. Despite the establishment of new regulations and governance, the FFR cases in Malaysia keep on growing. The involvement of top management in fraud cases is induced by fraud triangle components, namely pressure, opportunity, and rationalisation. However, the impact of fraud triangle elements on fraudulent financial reporting is inconclusive. Hence, the objectives of this study are twofold: to determine the trend of fraudulent financial reporting in Malaysia for five years from 2016 to 2020 and to examine whether the fraud triangle elements have a significant impact on fraudulent financial reporting. This study used the Binary Logistic Regression model to achieve its second objective. The independent variables used to determine fraudulent financial reporting comprise fraud triangle elements, namely pressure, opportunity, and rationalisation. The fraudulent financial reporting is proxied by M-score of the Beneish model. This study provides empirical evidence that even though pressure and opportunity have no significant relationship with fraud likelihood, rationalisation has a significant impact on fraudulent financial reporting. Besides contributing to the literature on corporate fraud issues, this study offers imperative insights to financial information users in determining the possibility or indication of fraudulent reporting. Future research may incorporate other proxies for fraud triangle elements to augment this study or include companies with specific fraud cases, such as PN17.

Pengaruh Kesulitan Keuangan, Kondisi Industri Dan Pergantian Auditor Terhadap Kecurangan Laporan Keuangan


 This study aims to examine the effect financial distress, nature of industry and change in auditor on fraudulent financial reporting. The population in this study were all manufacturing companies listed on the Indonesia Stock Exchange in 2015-2019. The sample in this study is manufacturing companies that have reported the company's annual report. The analytical tool used in this study is SPSS version 25. The results showed that there was a negative influence between financial distress and fraudulent financial reporting and found no influence between nature of industry and change in auditor on fraudulent financial reporting. This research provides information about the worse the company’s financial condition can be the higher probability of the company committing fraudulent financial reporting. So that it becomes a consideration for companies in making policies to avoid the occurrence of fraudulent financial reporting.
 
 Keywords : Financial Distress, Nature of Industry, Change in Auditor, Fraudulent Financial Reporting

PENGARUH KEPEMILIKAN MANAJERIAL, KARAKTERISTIK KOMITE AUDIT, UKURAN PERUSAHAAN DAN LEVERAGE TERHADAP KECURANGAN PELAPORAN KEUANGAN PADA PERUSAHAAN NON KEUANGAN DI BURSA EFEK INDONESIA

This study aims to determine the Effect of Managerial Ownership, Characteristics of the Audit Committee, Company Size, and Leverage on Financial Reporting Fraud in non-financial companies on the Indonesia Stock Exchange. The sample selection used purposive sampling with a sample size of 42 from 67 non-financial companies on the Indonesia Stock Exchange. The independent variables studied were Managerial Ownership, Characteristics of the Audit Committee, Company Size, and Leverage while the dependent was Financial Reporting Fraud. The results of this study indicate that Managerial Ownership, Characteristics of the Audit Committee (Independence of the audit committee), and Company Size has no significant effect on Fraudulent Financial Reporting. Characteristics of the Audit Committee (audit committee's financial expertise), Leverage has a significant effect on Financial Reporting Fraud.

The Effect of Financial Ratios On Fraudulent Financial Reporting

This study aims to examine the effect of Financial Ratios on Financial Statement Fraud in Manufacturing Companies Listed on the IDX for the 2014-2019 period. The population of this study were 15 companies. The sampling method used was purposive sampling method in order to obtain 15 companies as research samples. The data analysis technique used is Logistic Regression, Coefficient of Determination and Descriptive Analysis and Hypothesis Testing using the Wald Test and the Omnibus Test of Model Coeficients with a level of significance of 95%. The results partially show that profitability has a significant positive effect on Financial Statement Fraud, and Liquidity has a significant negative effect on Financial Statement Fraud. Meanwhile, it simultaneously shows that Profitability and Liquidity have a significant positive effect on Financial Statement Fraud in Manufacture Companies Listed on the Indonesia Stock Exchange (IDX) for the 2014-2019 Period.

The Effect of Financial Ratios On Fraudulent Financial Reporting

This study aims to examine the effect of Financial Ratios on Financial Statement Fraud in Manufacturing Companies Listed on the IDX for the 2014-2019 period. The population of this study were 15 companies. The sampling method used was purposive sampling method in order to obtain 15 companies as research samples. The data analysis technique used is Logistic Regression, Coefficient of Determination and Descriptive Analysis and Hypothesis Testing using the Wald Test and the Omnibus Test of Model Coeficients with a level of significance of 95%. The results partially show that profitability has a significant positive effect on Financial Statement Fraud, and Liquidity has a significant negative effect on Financial Statement Fraud. Meanwhile, it simultaneously shows that Profitability and Liquidity have a significant positive effect on Financial Statement Fraud in Manufacture Companies Listed on the Indonesia Stock Exchange (IDX) for the 2014-2019 Period.

Fraudulent Financial Reporting in Ministerial and Governmental Institutions in Indonesia: An Analysis Using Hexagon Theory

This study examined fraudulent financial reporting in the ministerial and governmental institutions in Indonesia. It adopted the hexagon theory that identified six elements (pressure, opportunity, rationalisation, capability, arrogance, and collusion) in determining whether these elements influence fraudulent financial reporting in the institutions. Content analysis was used on the financial statements of thirty-two ministerial and governmental institutions over three years from 2018 to 2020. This study shows that three out of the six elements, namely opportunity, arrogance, and collusion, significantly affect fraudulent financial reporting. The effects are positive, confirming the proposition of the hexagon theory. On the other hand, this study could not provide evidence on the effect of pressure, rationalisation, and capability on fraudulent financial reporting in the ministerial and governmental institutions. The findings in this study suggest the importance of a holistic application of the whistle-blowing and e-procurement systems in all governmental elements to deliver a transparent, accountable organisational performance for the stakeholders, especially society.

Analisis Faktor-Faktor Fraud Pentagon Teori Pada Fraudelent Financial Report

Fraudulent financial report is caused by the company's efforts to show the company's financial condition as well as possible to potential investors with the aim to make them have the desire to invest and cooperate with the company. This research aims to analyze the fraud pentagon factors that influence the emergence of fraudulent financial reports in manufacturing companies in the consumer product industry listed on the Indonesia Stock Exchange (IDX) during 2017 – 2020. The fraud pentagon variables include external pressure, ineffective monitoring, change in auditor, change of directors, and frequent number of CEO pictures. The population in this research were manufacturing companies in the consumer product industry that submit complete and good financial reports on the IDX or on the company's website. The sampling technique used was purposive sampling, and the data were analyzed using multiple linear regression analysis assisted by SPSS version 20 software. In this research, it was found that the external pressure variable positively affects the fraudulent financial report, while the ineffective monitoring, change in auditor, change of director, and frequent number of CEO pictures variables did not have an effect on the fraudulent financial report.

The Characteristic Influence of the Board of Commissioners, on Financial Reporting Fraud and its Implications on the Value of the Company

This research is motivated by the many fraudulent practices of financial reporting that occur in various countries. Many factors affect financial reporting fraud; one of them is the existence of a board of commissioners. The influence of the board of commissioners through its various characteristics to financial reporting fraud, among others, measures independence and gender diversity. This will affect the perception and decision of investors towards the company, which in turn will affect the value of the company. The purpose of this study was to analyze the influence of the board of commissioners' characteristics on financial reporting fraud that has implications for the value of the company. This research uses quantitative methods. Indications of financial reporting fraud in the study were measured by the Beneish M-Score (BMS). The results showed that the Size of the Board of Commissioners had a significant effect on Financial Reporting Fraud, and the Size of the Board of Commissioners had a significant effect on the value of the Company.

Determination of Fraudulent Financial Report: Case of Banking Industry in Indonesia

The study aims to assess the factors that cause fraudulent financial report in Indonesia by using Fraud Hexagon Theory of fraud. Database uses in the study is from Indonesia’s banking industry year 2019 and 2020. Multiple regression analysis method is applied to analyze the data. Result shows pressure (external) and the element of opportunity (quality of external auditors) correlate positively with fraudulent financial reports. On the hand, proxies such financial stability, financial targets, effective monitoring, number of audit committees, audit turnover, total accruals, GCG score, CEO ego, and WBS – show null correlation. However, all variables in Fraud Hexagon Theory affect fraudulent financial reports simultaneously.

The Role Of Professional Skepticism In The Effect Be-Tween Fraud Risk Assessment, Audit Experience, And Professional Ethics On Fraudulent Financial Reporting Detection: A Conceptual Framework

The Role Of Professional Skepticism In The Effect Be-Tween Fraud Risk Assessment, Audit Experience, And Professional Ethics On Fraudulent Financial Reporting Detection: A Conceptual Framework

Hexagon Fraud: Detection of Fraudulent Financial Reporting in State-Owned Enterprises Indonesia

This study aims to detect fraudulent financial reporting using hexagon fraud analysis, including seven factors: financial stability, external pressures, ineffective monitoring, auditor changes, change in director, arrogance, and collusion. The subject of this research is a public company consolidated audit report of state-owned enterprises. The existence of conflicting results, the phenomenon of fraudulent financial reporting, and limited research using the hexagon of fraud theory prompted this research to examine the factors that influence fraudulent financial reporting. The sample was selected using a sampling technique, with the criteria of state-owned enterprises listed on the Indonesia Stock Exchange in 2016–2020. The method used is quantitative, and the analytical method used is logistic regression analysis. The sampling technique used was purposeful sampling, so the number of samples was 125. The results of this study indicate that financial stability and external pressures have a positive effect on fraudulent financial reporting. However, ineffective monitoring, auditor changes, change in director, arrogance, and collusion do not affect fraudulent financial reporting.

Fraudulent Financial Reporting Analysis on Non-Financial Companies Listed on IDX in Hexagon Fraud Perspective

Fraudulent Financial Reporting Analysis on Non-Financial Companies Listed on IDX in Hexagon Fraud Perspective

Analisis faktor-faktor kemampuan auditor mendeteksi kecurangan dengan memoderasi etika profesi

This study aims to determine the impact of time budget pressure, auditor experience, and professional skepticism to detect fraudulent financial reports and professional ethics as a moderating variable. The population of this research consists of Public Accountant Firms in East Jakarta. In this research, 111 respondents were selected using the convenience sampling method. Data were analyzed using the multiple linear regression model and Moderate Regression Analyze (MRA). The results showed that time budget pressure, auditor experience, and professional skepticism have a significant and positive effect on detecting fraudulent financial reports. However, professional ethics cannot moderate the impact of time budget pressure, auditor experience, and professional skepticism to detect fraudulent financial reports.

Managerial Motivations in Fraudulent Financial Reporting According to Cumulative Perspective Theory

Managerial Motivations in Fraudulent Financial Reporting According to Cumulative Perspective Theory

Pentagon Fraud Analysis in Detecting Fraudulent Financial Reporting Using the Fraud Score Model

This study was conducted to determine the effect of pentagon fraud (pressure, opportunity, rationalization, capability and arrogance) in detecting fraudulent financial reporting using F-Score in financial companies listed on the Indonesia Stock Exchange in 2017-2019. Using associative quantitative research methods. The population of this study are 100 companies with 49 sample of companies for 3 periods, so the sample total is 147 samples was obtained which was taken by purposive sampling technique. The testing method of this research is through multiple regression analysis with the SPSS 22 program. The results of the partial test analysis show that pressure and opportunity has significant effect in detecting fraudulent financial reporting. Whereas rationalization, capability and the arrogance variable has insignificant effect in detecting fraudulent financial reporting. The test results simultaneously are pressure, opportunity, rationalization, capability and arrogance has significant effect in detecting fraudulent financial reporting.

Fraud Pentagon and Fraudulent Financial Reporting: Evidence from Manufacturing Companies in Indonesia and Malaysia

Research aims: This study aims to examine the influence of fraud pentagon concept on fraudulent financial reporting.Design/Methodology/Approach: This study’s population was manufacturingcompanies listed in Indonesia Stock Exchange and Malaysia Stock Exchange. 120 manufacturing companies in Indonesia and 118 manufacturing companies in Malaysia were involved as samples. The data analysis method used in this study is multiple linear regression.Research findings: The results showed that financial target, financial stability, quality of external auditor, external pressure, and nature of industry variables influenced fraudulent financial reporting. In contrast, personal financial need, ineffective monitoring, change in auditor, change in director, and frequent number of CEO’s pictures variables had no effect on fraudulent financial reporting. For Indonesia, it was found that financial target, financial stability, and the quality of external auditor influenced fraudulent financial reporting. While, in Malaysia, the results showed that financial stability, external pressure, and nature of industry variables influenced fraudulent financial reporting in Malaysia.Theoretical contribution/Originality: These results support the financial target and quality of external auditor hypothesis in Indonesia, financial stability hypothesis in Indonesia and Malaysia, external pressure and nature of industry hypotheses in Malaysia, stating that fraud pentagon factors affect fraudulent financial reporting. It is also proved that there are different levels of fraudulent financial reporting in Indonesia and Malaysia. Indonesia has fraudulent financial reporting cases higher than Malaysia.

Faktor-Faktor Yang Mempengaruhi Fraudulent Financial Reporting

This study aims to empirically prove the influence of financial stability, external pressure, and ineffective monitoring on fraudulent financial reporting. Financial stability was measured using a comparison of total assets. External pressure was measured using leverage. Meanwhile, ineffective monitoring was measured using the ratio of independent commissioners’ number. The dependent variable in this study was fraudulent financial reporting. It was measured using the F-Score Model. The sample in this study were 21 State Owned Enterprises (BUMN) listed on Indonesia Stock Exchange in period of 2017-2019. The data analysis method used in this study was Logistic Regression using SPSS software version 20. The results of this study indicate that financial stability has no influence on fraudulent financial reporting. Meanwhile, external pressure and ineffective monitoring influence fraudulent financial reporting.How to cite:Sari, W. M., & Irawati, A. (2021). Faktor-faktor yang Mempengaruhi Fraudulent Financial Reporting. Akuntabilitas: Jurnal Ilmu Akuntansi, 14(2), 139-152.