Fraudulent Reports Research Articles

LITERATURE REVIEW: FRAUD AUDITING IN INDONESIA

Financial statement fraud or corruption is one of the most common types of fraud committed by company executives. Pressure, opportunity, rationalization, arrogance, and the ability to commit fraud are all factors that contribute to financial statement fraud. The role of the auditor is critical in detecting signs of fraud in financial reports. Therefore, the researchers wish to conduct a literature review on audit fraud, focusing on the role of auditing in identifying fraudulent corporate financial statements in Indonesia. Auditors play a crucial role in detecting fraud in a financial report, according to the findings of this study, which the researchers hope will provide future researchers with insight and references for research in the field of fraud auditing and inform the public of this fact.

Fraud Diamond: Four Elements of Financial Report Fraud Detection – Study on Coal Producers

The aim of this research is to examine the impact of fraud diamonds on the identification of fraudulent financial statements. Fraud diamonds, a framework used to detect fraudulent financial statements, considers various factors such as pressure (measured by ROA), opportunity (measured by Ineffective monitoring (IND)), rationalization (measured by auditor turnover (AUDCHANGE)), and capability (measured by the change of directors (DIRCHANGE)). The research sample comprised of 9 companies selected through purposive sampling. Logistic regression analysis was employed as the analytical method, with rationalization and capability serving as the independent variables, assessed through a binary variable with values 0 and 1. The findings indicate that pressure significantly influences the detection of fraudulent financial statements. Specifically, higher ROA values correspond to a lower likelihood of fraudulent financial statements. Opportunity also has an impact on the detection of fraudulent financial statements, as an increase in ineffective monitoring levels leads to a higher detection rate of financial statement fraud. On the other hand, rationalization does not affect the identification of fraudulent financial statements, suggesting that auditor turnover rate does not play a role in detection. Similarly, capability, represented by the replacement of the board of directors, does not impact the detection of fraudulent financial statements in companies.

Factors Affecting Fraud in Financial Reports with the Fraud Triangle Perspective in SOE Companies on the Indonesia Stock Exchange

This study aims to analyze the factors that can trigger fraudulent financial reporting from the Fraud Triangle Theory perspective. The Fraud Triangle Theory explains that 3 factors can trigger fraud: pressure, opportunity, and rationalization. The variables of financial stability, external pressure, managerial ownership, financial targets, nature of the industry, ineffective monitoring, organizational structure, and rationalization explain these factors. This research was conducted at BUMN companies listed on the Indonesia Stock Exchange in 2017-2021, consisting of 21 companies. The sampling method is saturated sampling, so all populations are used in this study. The data type used is secondary data, with the data analysis technique of multiple linear regression tests using the EViews software tool. The results of this study indicate that Financial Stability has a positive and significant effect on Fraud Financial Reporting, Financial Targets, and the Nature of Industry have a negative and significant effect on Fraud Financial Reporting. At the same time, Managerial Ownership, Ineffective Monitoring, Structure Organization, and Rationalization do not affect financial statement fraud. Keywords: Fraud Financial Reporting, Fraud Triangle

Fraud Hexagon: Detection of Fraud of Financial Report in State-owned Enterprises in Indonesia

This study aims to identify the potential for fraudulent financial reporting using the Fraud Hexagon approach with pressure, capability, collusion, opportunity, rationalization, and ego indicators. The population in this study is state-owned companies with observations for 12 years, from 2010 to 2021, and uses regression analysis with SPSS tools to test the Hypothesis. The results showed that pressure and ego could detect the potential for fraudulent financial reporting. There is a tendency for management to report conditions that are different from the actual conditions when under pressure in the form of performance targets that are not supported by the resources they have. CEO duality also provides an excellent opportunity for fraudulent financial reporting practices because when there is a position war, there is no cross-check between departments, so other parts cannot detect the potential fraud committed by the CEO. This condition also indicates weak control processes that provide wider opportunities for fraudulent financial reporting. At the same time, variables of ability, collusion, opportunity, and rationalization cannot detect financial statement fraud. This condition is because state-owned companies are required to implement the Minister of Finance Regulation number PER-11/MBU/07/2021 and the Financial Services Authority number 13/POJK.03/2017 as the basis for the implementation of Good Corporate Governance so that it is possible to commit financial reporting fraud very small.

Analysis of Measurement of Financial Difficulties and Financial Report Fraud (A Case Study at PT Asabri (Persero) 2010-2018)

This study aims to examine the financial health condition and whether there is an indication of fraudulent financial statements or not at PT ASABRI (Social Insurance for the Armed Forces of the Republic) in 2010-2018 by using the Altman Z-Score, Springate S-Score, Grover G-Score, Beneish M-Score, and Dechow F-Score methods. PT ASABRI became the object of the study due to the result of an audit conducted by the BPK (The Audit Board of the Republic of Indonesia) in 2021 that found fraud in financial management and investment funds at PT ASABRI. To measure financial distress, the researchers used the Altman, Springate, and Grover models. While to examine financial statement fraud, the researchers used the Beneish and Dechow models. The results revealed that each model showed varied results. In the financial distress model, the Altman Z-Score could show financial distress 4 times while the Springate S-Score showed financial distress 5 times in 9 years of observation. Moreover, the other models showed different results. The Grover G-Score model did not indicate any financial distress at PT ASABRI. While in the fraud model, the Beneish M-Score could detect indications of fraudulent statements at PT ASABRI 5 times in 8 years of observation. Different conditions occurred in the Dechow F-Score model that did not show fraudulent financial statements at PT ASABRI in 9 years of observation, from 2010 to 2018.

Analysis of Fraud Hexagon Theory of Financial Fraudulent Reporting Using F-Score Model

The research purpose is to determine and analyze the effect of fraud hexagon theory (stimulus, opportunity, rationalization, capability, ego dan collusion) to fraudulent financial reporting. The importance of this research is that fraudulent financial reporting can be detected as early as possible, so that the fraudulent fnancial reporting can be avoided and does not cause a loss for many parties. This research was conducted in the manufacture sector companies because it is a sector that is prone to fraudulent financial reporting. The sample in this research was selected using a purposive sampling technique which was obtained as many as 59 of manufacture sector companies listed on the Indonesia Stock Exchange in 2016-2020. The data analysis technique used SEM-PLS with WarpPLS 7.0 software. The result of this research show that stimulus, opportunity, rationalization and ego have positive and significant to fraudulent financial reporting, collusion have negative and significant to fraudulent financial reporting, while the capability did not have effect to fraudulent financial reporting.

Effect of Fraud on Commercial Banks’ Performance in Nigeria

The study examined the effect of fraud on bank performance in Nigeria. The specific objectives were to: investigate the relationship between the number of frauds and bank performance in Nigeria, assess the relationship between the amounts lost to frauds and bank performance in Nigeria and to examine the relationship between the numbers of staff involved in fraud loses and bank performance in Nigeria. The study utilizes secondary sources of data extracted from the Nigerian Deposit Insurance Corporation (NDIC) Annual Report and CBN Statistical Bulletin from 1994 to 2020. Statistical methods such as descriptive analysis, Pearson correlation and OLS regression techniques were employed in the evaluation of the data. The result of the hypotheses revealed number of fraud cases as well as the total amount lost to fraud had a positive and significant impact on bank performance while the total number of staff involved in fraud was found to be negative and significant on deposit money banks performance in Nigeria. The study recommended that CBN and NDIC should encourage DMBs to always report cases of fraud, this can be done through creation of a fraud “hotline” where the public can call to complain or report fraud cases with appropriate rewards that will incite more compliance. Management of banks should train and retrain staff of Nigerian banks in fraud prevention and control. Such training should include a comprehensive review of legal and regulatory guidelines that will limit fraud activities.

Identifying Financial Report Fraud of U.S. Listed Chinese Companies

A key feature of publicly listed companies all over the world is that the people who own the company, its investors, do not typically participate in the day-to-day management of the company. This separation of ownership and control can become a problem when investors and management have different objectives. Disclosure is a primary means through which investors can understand what managers are doing and ensure that managers serve the objectives of the companys owners. However, since management is responsible for preparing the companys financial statements, they could misreport the numbers to mislead investors. Previous research showed managers had discretion in manipulating the numbers in the financial report. In this paper, we collected samples of Chinese companies listed in the United States, such as Luckin Coffee, and assessed whether there were any signs that might help investors identify fraud earlier than they were discovered, and what mechanisms prevented managers from doing so.

Representation of Nigerian Internet Scamsters in selected Nigerian and International News Reports

Linguistic studies on Nigerian internet scamsters have dwelt on the aspects of language use. These studies focused on the linguistic features, slangy expressions, discourse and persuasive strategies used by scamsters in scam messages. However, the aspect of media representation of the social actors of Nigerian internet fraud has not been given adequate attention. This study, therefore, explores the representation of social actors of Nigerian internet fraud in Nigerian and international news reports. Headlines and news contents are purposively sampled from forty-five news articles published between 2019 and 2021, from two Nigerian newspapers and two international news media. Guided by Halliday’s Systemic Functional Grammar (SFG) and Van Leeuwen’s early work on social actor representation (1996), ten forms of representations were identified. Nigerian Internet Scamsters were represented as educated, role models, imposters, parentally supported, abductors, wrong ambassadors/negative nationals, friends to the security agents, desperate/money ritualists, guilty and convicted, exploiters and victimizers. The negative connotation of these labels indicates that the media are not neutral in their representation of scammers. This study shows that the representation of the social actions and actors in internet fraud are linguistically and discursively framed to fit their ideology.

Financial Fraud Detection of Listed Companies in China: A Machine Learning Approach

As the focus of capital market supervision, financial report fraud has shown a development trend of enormous numbers, complex transactions, and hidden means in recent years. To improve audit efficiency and reduce the dependence on non-financial data, the study only uses the structured original data in the financial report to constructs a new fraud identification model, which can quickly detect fraud in China. This study takes the listed companies in China from 1998 to 2016 as research samples and selects 28 sets of raw data from financial reports. Then, this study compares the detection effectiveness of two single classification machine learning algorithms and five ensemble learning algorithms on fraud detection. Compared with single classification machine learning algorithms, the results show that ensemble learning algorithms are generally better at detecting fraud for Chinese listed companies, and the stacking algorithm performs the best. The study results provide direct evidence for rapid fraud detection using financial report raw data and ensemble learning algorithms. The study first proposes a stacking algorithm-based financial reporting fraud identification model for listed companies in China, which provides a simple and effective approach for investors, regulators, and management. It can also provide a reference for the detection of other fraud scenarios.

Investigating the Relationship between Transactions with Affiliates and Fraudulent Reporting by Explaining the Moderating Role of Corporate Governance Companies Listed in Tehran Stock Exchange

Transactions with related parties have become a common way for fraudulent reporting due to the hiddenness and simplicity of manipulation, and the traditional methods of quantitative analysis have failed to discover the complex relationships of these transactions. Therefore, the detection of fraudulent reporting has attracted the attention of researchers and legislators. This research seeks to examine and test the relationship between transactions with related parties and fraudulent reporting by explaining the role of corporate governance moderation in companies listed on the Tehran Stock Exchange. The statistical population of this research includes 146 companies admitted to the Tehran Stock Exchange during a period of 9 years from 2012 to 2021. Multiple linear regression method has been used to test the research hypotheses. The results of the research showed that there is a positive and significant relationship between transactions with related parties and fraudulent reporting. In fact, the level of fraudulent reporting is higher in companies with related party transactions and fraudulent reporting. Also, the research results showed that there is a negative and significant relationship between corporate governance and fraudulent reporting. In other words, in companies where corporate governance is observed, the level of fraudulent reporting is lower. Examining the effect of corporate governance indicators on fraudulent reporting using unusual transactions with related parties shows that the independence of the board of directors and institutional shareholders has no significant effect on the relationship between transactions with related parties and fraudulent reporting, but the type of auditor has a direct and significant effect on the relationship between transactions with related parties and fraudulent reporting. Therefore, internal and external auditors, regulatory bodies, board of directors, and other professionals should identify this type of fraud and emphasize the importance of prevention approaches to reduce the possibility of committing corporate fraud. Regulators should also pay more attention to loan-based related party transactions and the total number of related party transactions.

FRAUD DIAMOND FOR DETECTION OF FINANCIAL STATEMENT MISREPRESENTATION IN THE MANUFACTURING INDUSTRY

This research was conducted to obtain empirical evidence regarding fraud, primarily due to fraud in financial reports based on the fraud diamond theory. This study tested six independent variables; financial stability, external pressure, financial targets, effective monitoring, rationalization, and capability. P-Score Model is used to detect potential fraudulent financial statements. The objects studied were 103 manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2015-2019 with 515 annual reports. The results of this study indicate that only two variables have an effect in detecting fraud in financial statements. The variables that have a significant effect are financial stability as proxied by the ratio of changes in assets and financial targets as proxied by the ratio of return on assets (ROA). Other variables represented by external pressure, effective monitoring, rationalization, and capability did not affect the detection of potential fraudulent financial statements. These findings may benefit auditors in predicting fraud in financial statements, considering the fraud diamond environment.

An Analysis of Auditors’ Characteristic and Non-Characteristic Components on Detecting The Fraudulent Occurrences in Public Sectors

This study is to examine the influence of the auditors’ characteristic and non-characteristic components on detecting the fraudulent occurrences in the public sectors. Specifically, this study focuses on financial statement fraud as it has the most negative impacts on the society and beyond. This study is developed by the empirical evidence from Indonesian external auditors. The author in the initial stage creates hypotheses to explain the interaction processes between the auditors’ characteristic and non-characteristic components on detecting the fraudulent occurrences in the public sectors. The results of this study concluded that audit procedures and strategies have a significant effect on detecting financial statement fraud in public sector organizations. Meanwhile, The auditors competence is not significantly responsible in detecting financial statement fraud in public sector organizations. The auditors independence and professional skepticism has a significant effect on detecting fraudulent reports in public sector organizations. Thus, the auditor objectivity has no significant effect on the success of detecting financial statement fraud in public sector organizations.

Fraud Detection of Financial Statements through the Fraud Hexagon Approach in Indonesian SOEs

Aims: This study aims to detect fraudulent financial statements through the Fraud Hexagon approach in Indonesian SOEs period 2011-2019
 Study Design: This study applied the quantiative descriptive method.
 Place and Duration of Study: Financial Services Authority, Period 2011-2019
 Methodology: This data used in this research is secondary data based on the companies’ financial statement. The population used are SOEs companies in Indonesian during the year 2011 – 2019 and the sampe are 4 banks. Thetechnique of data analysis applied is regession data panel.
 Results: According to the results shows that external pressure, nature of industry, effective monitoring, financial target, capability, personal financial need, rationalization, ego, and also collusion give no influence toward the fraud of financial statement. The variable financial stability gives negative influence toward the fraud of financial statements.
 Conclusion: Of the 10 hypotheses and 2 control variables (Size and Firm Age) proposed, it was found that there was 1 variable that had a negative effect on report fraud. financial statements and others have no influence toward the financial statements.

PENGARUH BYSTANDER EFFECT DAN WHISTLEBLOWING TERHADAP KECURANGAN LAPORAN BANTUAN KEUANGAN PARTAI POLITIK (STUDI EKSPERIMEN PADA MAHASISWA PRODI AKUNTANSI FAKULTAS EKONOMI DAN BISNIS UNDANA)

AbstractThis study aims to (1) Determine the effect of the observer's impact on reducing party financial assistance funds; (2) Knowing the effect of whistleblowing on opposing fraud and (3) studying the effect of observers and complaints on the increase in party political aid funds. Testing the hypothesis in this study using an experimental instrument. The factors consist of two variables, namely the adequacy of financial statements as the dependent variable, the observer effect and the complaint as an independent variable. The population in this study were all students of FEB Accounting Study Program, Nusa Cendana University. The sampling technique using purposive sampling method. The criteria used as research correspondents are students who have received and taken Business Law and Ethics courses. The data used in this study are primary data obtained directly from the research object in several research results. The Rating Scale used in this study uses a Likert Scale. The results show that the bystander effect affects the reduction of financial aid for political parties. Whistleblowing plays a role in reducing the fraud on financial statements of political parties. And the effect observer and whistleblowing influence simultaneously towards reducing the adequacy of political party financial assistance. Keywords: Bystander effect, whistleblowing, Fraudulent Reports on political party financial assistance

A Review of Related Literature Review on the Accuracy of Securities Analysts' Earnings Forecast

Analysts play a pivotal role in the capital market. As an important information transmission medium between listed companies and investors, securities analysts use their superb professional level and information advantages to integrate and analyze the financial data and business information of listed companies, and publish research through published research. Analytical reports assist investors in making decisions. In recent years, there have been numerous cases of fraudulent research report information in my country. The quality of research report information has been criticized, and domestic analysts have also become the target of criticism. They are facing an unprecedented crisis of trust. Therefore, how to improve the accuracy of analysts' forecasts has become an urgent problem at present. The article systematically sorts out research results at home and abroad, and reviews the literature from three aspects: the role of analyst forecasts, influencing factors and economic consequences, which has important practical significance for stabilizing the market economic order and improving the efficiency of resource allocation.

Sanksi Pidana terhadap Kecurangan dalam Laporan Dana Kampanye Pemilihan Umum di Indonesia

In 2019, Dr Somvir, a legislative candidate for Bali Regional People’s Representative Council, reported his campaign fund was zero rupiah, which was later reported to Election Supervisory Body Bali as a case of suspicion of fraud in the campaign fund report. The fraud was manipulating the number of campaign funds received or used. The purpose of this study is to discuss the legal arrangements regarding general election campaign finance reports in Indonesia and to examine the criminal sanctions imposed on fraud in general election campaign finance reports in Indonesia. The research method and problem approach used is a normative method with a conceptual and statutory approach. The results of this study explain campaign fund report is regulated on Law Number 7 of 2017 about General Election and Regulation by General Election Commission Number 24 of 2018 about Campaign Fund in General Election. Criminal sanctions for fraud in campaign fund reports in the Indonesian general election could be confinement, imprisonment, and fines, which are regulated on Article 496 and 497 Law Number 7 of 2017. The government needs to explain clearly the meaning of information in campaign fund reports in the general elections.

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.

FINANCIAL REPORTING MANIPULATION ON MINING COMPANIES IN INDONESIA: FRAUD DIAMOND THEORY APPROACH

Forensic accounting helps to discover fraud practices where the fraud diamond theory is one of the popular theories in this issue. It puts concerns on budget priorities, financial stability, inefficient monitoring, replacement of auditor and directors. As the dependent variable, financial statement manipulation funded by income control is used. The nine mining entities listed on the Indonesian Stock Exchange in 2017-2019 were chosen using the purposive sampling method, resulting in 27 observations. By using the multi-linear regression method, This study showed that financial targets and financial stability affect the occurrence of fraud in financial reports. Oppositely, insufficient monitoring, replacement of auditors and directors have no impact on the fraudulent reporting.

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.