Statement Fraud Research Articles

Detection of Potential Financial Statement Fraud Using the Fraud Hexagon Model Approach (Empirical Study of LQ 45 Companies Listed on the IDX in 2018–2022)

The researcher intends to assess and identify fraudulent financial reporting by examining LQ 45 index companies listed on the Indonesia Stock Exchange for the period 2018–2022. The fraud hexagon, which consists of pressure, opportunity, capability, rationalization, arrogance, and collusion, is used to measure fraudulent financial reporting. Purposive sampling technique was used to obtain a sample of 125 data. Using the Eviews 12 program, researchers conducted a quantitative descriptive study using a panel data regression analysis approach using the Common Effect Model (CEM). The findings of this study indicate that pressure on financial stability significantly influences the potential for fraudulent financial reporting. Meanwhile, opportunities through ineffective monitoring, capability seen from changes in directors, rationalization seen from changes in auditors, arrogance seen from the number of CEO photos, and collusion seen from cooperation with government projects have no significant effect on the potential for financial fraud. reporting.

Fraudulent Financial Statement on The Property and Real Estate Sector in Indonesia and Malaysia

Purposes: The research aims to test and determine the influence of the components in the fraud hexagon on fraudulent financial statements.Methods: The population in this research are property and real estate sector companies listed on the Indonesia Stock Exchange and Malaysia Stock Exchange in 2020-2022. The study’s sampling technique used purposive sampling to obtain 77 companies with 187 units of analysis. Data were analyzed by panel data regression analysis using Eviews 12.Findings: The results show that financial targets, the nature of the industry, and ineffective monitoring positively and significantly affect fraudulent financial statements. Meanwhile, external pressure and the frequent number of CEO pictures reduce fraudulent financial statements. As for director experience, political connections and changes in auditors do not affect fraudulent financial statements.Novelty: Novelty in this research, namely the use of populations in Indonesia and Malaysia. The proxy used to represent the capability element also uses the director experience variable, which is rarely used in previous research.

THE EFFECT OF HEXAGON FRAUD ON FINANCIAL STATEMENT FRAUD (STUDY OF BASIC MATERIAL SECTOR COMPANIES IN 2020-2022)

Fraud cases have increased from year to year and the most detrimental is fraudulent financial statements and causing losses for the company and for user’s financial statements. This research aims to analyze the deep hexagon fraud factors detecting financial statement fraud in Basic Material sector companies registered in Indonesian Stock Exchange (BEI) for the 2020-2022 period. The population used was 93 companies basic materials sector listed on the Indonesian Stock Exchange. Purposive sampling method is the sampling method used in this research. The sample meeting the research criteria are 31 basic material companies with total observations of as many as 93. The data analysis method uses the logistic regression method with the help of an application EViews to carry out data testing. The results of this research are expected to provide better understanding of the factors that influence fraud reports on financial sector Basic Materials Company. Apart from that, the results of this research can also provide insights for companies and regulators in improving internal controls, actions prevention, and detection against financial statement fraud.

The Development of Financial Statement Fraud Research: A Bibliometric Analysis

This research aims to present and explain the development of research related to financial statement fraud by reviewing bibliometric analysis taken from the Scopus database for the period 1979 – 2023. The method used is a bibliometric analysis approach using VOSviewer and Microsoft Excel to analyze data frequency. The results of this research show that the research topic of financial statement fraud will be most researched in 2023 with 60 articles, the journal that publishes the most topics related to financial statement fraud is the Journal of Financial Crime. The country that publishes the most on the topic of financial statement fraud is the United States. Variables that often appear related to the topic of financial statement fraud are corporate governance, earnings management, crime, and the fraud triangle. Brazel, Hermanson, and Jones are the authors who write most frequently or extensively about financial statement fraud.

FAKTOR-FAKTOR YANG MEMPENGARUHI KECURANGAN LAPORAN KEUANGAN

This study was conducted to analyze the factors that influence financial statement fraud. This research was conducted at food &beverage subsector manufacturing companies listed on the Indonesia Stock Exchange for the period 2016-2020. The sample determination method in this study used the purposive sampling method with a sample of 19 food &beverage subsector manufacturing companies that had met the sample criteria. The study used multiple linear regression analysis techniques and used the SPSS version 22.0 statistical test tool. The results of this study showed that financial target and external pressure variables had a positive and significant effect on the detection of financial statement fraud and audit opinions had a negative and significant effect on the detection of financial statement fraud, but the variables of financial stability, nature of industry, and change of directors had no effect on the detection of financial statement fraud

Determinants of Fraudulent Financial Statements Using an Approach Fraud Hexagon

There are 239 cases of fraud in Indonesia with a percentage of cases of financial statement fraud of 9.2%, so this research aims to develop methods for preventing and detecting financial statement fraud are needed. The theory used is the latest theory, namely the fraud hexagon. This research is quantitative. This research is a hypothesis testing research which aims to test hypotheses and explain phenomena in the form of relationships between variables in the research, namely the fraudulent financial statement variable as the dependent variable and the elements in the fraud hexagon, namely pressure, opportunity, rationalization, capability, arrogance and collusion as independent variables. The novelty of this research is this research added a moderating variable which is exposures. The primary data used was taken directly using a questionnaire distributed to practitioners in the finance, accounting and internal audit departments in the state-owned enterprises in services industry from Nov 3rd 2023 until Dec 2nd 2023 with 139 respondents used. This research has 7 hypotheseses with 6 of them are every elements in fraud hexagon has positive effect to fraudulent financial statements, and the 7th hypotheses is exposures moderates in weaken the influence of the variables in fraud hexagon to fraudulent financial statement. The results of this research is pressure, capability, collusion, opportunity, and arrogance has positive significant effect in fraudulent financial statement, as for rationalization has no significant effect in fraudulent financial statement. Exposures can moderate elements in fraud hexagon in weaken their influence in fraudulent financial statement.

Detecting frauds in financial statements: a comprehensive literature review between 2019 and 2023 (June).

Purpose- The purpose of this study is to determine studies on detecting different types financial frauds, financial statement frauds and methods used in these studies. Financial statement fraud is one of the most common types of white-collar crime that has plagued various industries worldwide. It involves manipulating financial information in order to deceive stakeholders, such as investors and regulators, for personal gain or advantages. Financial statement fraud has significant implications for stakeholders, including investors, regulators, and the general public. Detecting fraudulent activities in financial statements is crucial for ensuring transparency, reliability, and trust in financial reporting. Methodology- This paper presents a comprehensive literature review of studies focused on detecting frauds in financial statements in between 2019 and first half of 2023 inclusive on Science Direct. Findings - The review encompasses a range of research articles, providing insights into various methodologies, techniques, and advancements in fraud detection. The findings of this review contribute to the understanding of fraud detection mechanisms in financial statements and inform future research directions in this critical area. Conclusion - This paper presents a comprehensive literature review on the topic of detecting financial statement fraud, focusing on current trends and approaches employed in the field. By examining a wide range of scholarly articles, research studies, and industry reports, this review aims to provide an overview of the existing knowledge, methodologies, and tools utilized in the detection of financial statement fraud. In recent years, it has been observed that studies using machine learning in the field of fraud detection have increased. Keywords: Fraud detection, machine learning, data mining literature review, financial statements JEL Codes: M42, M21, M41

ANALISIS PENGARUH PRESSURE DAN OPPORTUNITY UNTUK MENDETEKSI TERJADINYA KECURANGAN LAPORAN KEUANGAN

Financial statement analysis is the process to identify company’s information based on company’s condition. However, in recent years there have been accounting scandals or what is commonly referred to as financial statement fraud, which is a deliberate omission that results in material misstatements in financial statements. The purpose of this study was to determine the effect of pressure and opportunity to detect fraud in the financial statements. The sample of this study were 14 companies with purposive sampling technique from 47 mining companies listed on IDX 2017-2020. Secondary data in this study is accessed through www.idx.co.id and each company's website. The analytical technique used in this study uses multiple linear analysis. The results of the analysis show that ineffective monitoring has a positive effect on financial statement fraud, while external pressure and auditor opinion have no effect on financial statement fraud.

The Ability of the Beneish M-Score To Detect the Trends of Fraud in the Indonesian Sharia Stock Index

The purpose of this study is to determine the level of ability of the Beneish M-Score in detecting financial statement fraud tendencies. This study uses a quantitative approach with logistic regression analysis techniques. The results of this study provide empirical evidence that is different from research on manufacturing companies, state-owned companies, banking, mining, non-financial companies, property companies, real estate and building construction. The contribution of the empirical results of this study shows that overall the Beneish M-Score model is unable to detect the tendency of fraudulent financial statements in Islamic companies. DSRI, GMI, AQI, SGI, DEPI, SGAI, LVGI, and TATA has no effect on fraudulent financial statements in sharia companies.

PENGARUH ELEMEN FRAUD PENTAGON TERHADAP DETEKSI KECURANGAN LAPORAN KEUANGAN

This research aims to examine the influence of the fraud pentagon on fraudulent financial reports in startup companies listed on the Indonesia Stock Exchange. This research uses quantitative methods. The data collection used was purposive sampling from 8 startup companies listed on the IDX for the 2019-2023 period with a 5 year financial reporting period. Hypothesis testing was carried out using multiple linear regression using SPSS 29. The results of this study show that financial stability, ineffective supervision, change of auditor, change of director and CEO image have no effect on financial statement fraud

Implications Fraud Diamond in Fraudulent Financial Statements on Property, Real Estate and Building Construction Industries

Fraudulent financial statements involve intentional actions of manipulating or hiding information in financial reports to deceive users. Understanding the factors behind such fraud can be explored through the Diamond Scheme Theory, consists of four materials: opportunity, rationalization, ability, and pressure. The aim of this research analyze the impact of each component of the Fraud Diamond on fraudulent financial statements. The quantitative research methodology focuses on industries in the real estate, construction and property sectors listed on the Indonesia Stock Exchange starting 2020 to 2022. The sample includes 69 companies selected through purposive sampling. Utilizing multiple linear regression analysis using SPSS 26 is employed for analysis. The study results reveal that, individually, only the capability variable within the Fraud Diamond has a significant negative impact on fraudulent financial statements. Pressure, opportunity, and rationalization variables do not show a significant influence. Additionally, when considered collectively, there is no discernible impact of the Fraud Diamond components on fraudulent financial statements.

Fraud Pentagon in Detecting Financial Statement Fraud

Purpose: This study aims to prove the influence of the fraud pentagon on the existence of fraudulent financial statements.
 Methodology/approach: This research approach is quantitative with secondary data in the form of company annual reports in the manufacturing sector with the food & beverage sub-sector listed on the IDX for the 2016-2020 period. Purposive sampling as sampling with a total of 12 companies for 5 periods and a total sample of 60. The analysis technique uses multiple linear regression assisted by SPSS 26.
 Findings: The findings prove that there is an influence of the variables of pressure, opportunity, rationalization, competence, and dualism position on financial statement fraud, while the variable frequent number of CEO's picture does not affect the existence of fraudulent financial statements.
 Practical implications: The findings of this study have an impact on the company's stakeholders and stake holders to detect fraud in the financial statements.
 Originality/value: This research has the novelty of adding a dualism position proxy variable to the arrogance element.

The Effect of the Fraud Pentagon on Fraudulent Financial Statements and Their Impact on Funding Decisions

The purpose of this study is to test whether financial targets, ineffective monitoring, change in auditors, change in directors, frequent number of CEO's pictures affect fraudulent financial statements and their impact on funding decisions in all non-financial companies listed on the Indonesia Stock Exchange (IDX) and sanctioned by OJK for violating regulation No. VIII.G.7 from 2010 to 2021. The data used in this study are secondary data derived from financial reports published by the company. A total of 54 companies became the population in the study. The sample selection in this study used a purposive sampling technique with certain criteria and 9 companies were selected as research samples. The data analysis technique in this study is using panel data regression with the help of Eviews software version 12. The results of this study indicate that simultaneously financial targets, ineffective monitoring, change in auditors, change in directors and frequent number of CEO's pictures have no effect on fraudulent financial statements in all companies listed on the Indonesia Stock Exchange (IDX) from 2010 to 2021. Furthermore, fraudulent financial statements affect funding decisions. Partially, financial targets, changes in directors, and frequent numbers of CEO's pictures have no significant effect on fraudulent financial statements. Meanwhile, change in auditor and ineffective monitoring have a negative and significant effect on fraudulent financial statements in all companies listed on the Indonesia Stock Exchange (IDX) from 2010 to 2021.

Pengaruh Kepemilikan Manajerial, Dewan Komisaris, dan Komite Audit terhadap Fraudulent Financial Statements

This research aims to obtain empirical evidence and analyze the influence of managerial ownership, board of commissioners and audit committee on fraudulent financial statements in pharmaceutical manufacturing companies listed on the Indonesia Stock Exchange 2018-2022. The population in this study were 12 pharmaceutical companies, while the sample in this study was 45 companies. This research uses secondary data obtained from the official website of the Indonesia Stock Exchange (BEI), namely www.idx.co.id, the BEI corner (Indonesia Stock Exchange) and company websites using the logistic regression analysis method. The results of this research conclude the managerial ownership, board of commissioners and audit committee have no effect on fraudulent financial statements.

THE EFFECT OF FRAUD DIAMOND ON FRAUDULENT FINANCIAL STATEMENTS IN FOOD AND BEVERAGE SUB-SECTOR COMPANIES LISTED ON THE INDONESIAN STOCK EXCHANGE

The research aimed to analyse the effect of fraud diamond components on the occurrence of fraudulent financial statements in food and beverage subsector companies listed on the Indonesia Stock Exchange (BEI). The components of fraud diamond which include as financial stability, ineffective monitoring, change in auditors, and change in directors were independent variables that were suspected to affect the fraudulent financial statement in the company. Population in this research was all financial statements of food and beverage companies listed on the Indonesia stock exchange which have been audited and published. Samples were financial statements of food and beverage companies period 2021-2022 taken through purposive sampling as many as nineteen companies. The sampling technique in this research was purposive sampling. The data analysis used is descriptive statistics, classic assumption tests using the normality test, autocorrelation test, multicollinearity test and heteroscedasticity test, multiple linear regression analysis, and hypothesis testing using the partial test (t) and simultaneous test (f). The partial results of the research are that the variables financial stability, ineffective monitoring, change in auditor, and change in director have no effect on fraudulent financial statements. The results of the research simultaneously show that the variables financial stability, ineffective monitoring, change in auditor, and change in director have no effect on financial statement fraud.

Analisis Bibliometrik Pada Kecurangan Laporan Keuangan: Publikasi Tiga Dekade Terakhir

Purpose of the research is to determine the growth of research publications regarding fraud in financial reporting by examining bibliometric analysis from the Scopus database from 1993 to 2022. This research method uses a bibliometric analysis approach. The application system for data visualization uses VOSviewer and Microsoft Excel to perform data frequency analysis. The results of this research indicate that the issue of financial statement fraud is a topic that continues to attract the attention of researchers. Authors contribute to the literature by analyzing publications and authors by year, country, journal, author, and organization. This research can help increase the understanding of other researchers to plan future research to detect and prevent financial statement fraud for the sustainability of an organization. The author tries to conduct a comprehensive review of research on financial statement fraud conducted over three decades. This study makes a significant contribution and provides new insights into financial statement fraud.

Application of Beneish M-Score to Detech Fraudulent Financial Statements in State-Owned Company in Indonesia

Introduction/Main Objectives: This study aims to determine which State-Owned Company are included in the manipulator, non-manipulator, and gray company groups. Background Problems: According to a study conducted in 2016 by the Association of Certified Fraud Examiners, the majority Fraud cases involved 81.2% of government agencies, 8.1% of State-Owned Enterprises, and 2.3% of private companies. The businesses designated by of State-Owned Company caused the most losses to the industrial sector due to fraud at 58.8%. Research Methods: This research uses a quantitative descriptive method. The objects in this study are State-Owned Company companies in Indonesia in 2018-2021. The research sample used a purposive sampling technique. Data analysis was performed using seven types of financial ratios contained in the Beneish M-score method. Finding/Results: The results showed that in 2018 there was 1 company that was included in the manipulator group, 22 companies were included in the non-manipulator group, and no company was included in the gray company group in 2018. Then in 2019 there were 3 companies that were included in the manipulator group, 17 companies are included in the non-manipulator group, and 3 companies are included in the gray company group. In 2020 there were 5 companies included in the manipulator, 16 non-manipulator companies, 2 companies included in the gray company group. And in the last year, namely 2021, there will be 1 company that is included in the manipulator group, 22 non-manipulator companies, and no company that is included in the gray company group in 2021.

The Effect of Hexagon Fraud Theory in Detecting Financial Statement Fraud

Purpose – The purpose of this research is to determine the effect of hexagon fraud theory in detecting financial statement fraud.
 Methodology/approach – This research uses a sample of insurance companies listed on the Indonesia Stock Exchange during the 2018-2022 period. The sampling technique used in this research was a side purposive technique, the samples obtained were 15 insurance companies or 75 data observations. The analytical method used is logistic analysis using SPSS.24.
 Findings – Based on the results of this research, it shows that External Pressure has a significant effect on Financial Report Fraud, Political Connection has a significant effect on Financial Report Fraud, Nature of Industry has a significant effect on Financial Report Fraud, and Effective Monitoring has a significant effect on Financial Report Fraud, while Financial Stability does not have a significant effect on Financial Report Fraud, Financial Target does not have a significant effect on Financial Statement Fraud, Personal Financial Need does not have a significant effect on Financial Report Fraud, Capability does not have a significant effect on Financial Report Fraud, Rationalization does not have a significant effect on Report Fraud Finance, Arrogance does not have a significant effect on Financial Statement Fraud.

Financial Statement Fraud of Indonesian Islamic Banks

Objective: Financial statement fraud (FSF) in Islamic institutions is considered unethical due to its production of inaccurate information for stakeholders. In this study, we examine some institutional characteristics, particularly those pertaining to corporate governance, that have the potential to regulate the occurrence of financial statement fraud (FSF). Methodology: Data was gathered quantitatively. Thel study utilizeld a samplel including 11 commelrcial Islamic banks opelrating in Indonelsia. Thel obselrvation pelriod spanneld from 2019 to 2022. Result: Through an examination of Islamic banks in Indonesia, it was observed that some characteristics of the Sharia Supervisory Board (SSB) of these banks, including their level of knowledge, the size of the board, and the frequency of their meetings, had the potential to mitigate Financial Statement Fraud (FSF). In addition, the composition of the audit committee and the perceived credibility of the external auditors can also contribute to the effective management of financial statement fraud. This study does not identify any significant impact of the board of commissioners' structure on the financial stability of the firm (FSF). One additional discovery pertains to the three SSB traits examined in this study, with the most significant impact on regulating FSF being the specialised knowledge and proficiency in accounting, finance, or economics possessed by each SSB. Conclusion: It is recommended that each Sharia Supervisory Board (SSB) be equipped with professionals in relevant disciplines, in addition to their experience in Islamic jurisprudence.

THE EFFECT OF NATURE OF INDUSTRY, FINANCIAL STABILITY, INEFFECTIVE MONITORING, AND CHANGES IN COMPANY DIRECTORS ON INDICATIONS OF FRAUDULENT FINANCIAL STATEMENTS

Fraudulent financial statements are part of corporate management fraud. It is conducted based on the financial condition of the organization for the purpose of misleading users of financial statements by omitting values or amounts in the disclosure of financial statement documents. Therefore, it will mislead the stakeholders who are investing in the company. This study aims to analyze the effect of the nature of the industry, financial stability, ineffective monitoring, and changes in company directors on indications of fraudulent financial statements. The research population is manufacturing sector companies listed on the Indonesia Stock Exchange (IDX) for the 2017–2019 period, which are listed on the website www.idx.co.id. There are as many as 183 companies. The sampling method used is the purposive sampling method. The companies that meet the sampling criteria are 76. The analysis tool uses multiple linear regression tests. The results of this study indicate that the nature of the industry has a positive effect on indications of fraudulent financial statements, financial stability has a positive effect on indications of fraudulent financial statements, and ineffective monitoring has a positive effect on indications of fraudulent financial statements. Meanwhile, the changes in company directors has no effect on indications of fraudulent financial statements.