Analysis of Pentagon Fraud Model To detect Financial Statement Fraud (Study on the Industrial ClassificationFinance on the Indonesia Stock Exchange)

Shinta Gem Sari, Alif Akbar Subkhi

Abstract


Fraudulent Practices A is a problem that must be detected at the Earliest time, as an Effort to Protect Company'S assets and maintain the trust of stakeholders. In Financial Service Companies, Especial Banking Companies, Fraud is Susceptible to Occur. The Company's Needs An Approach to Detect Fraud, Especially Financial Statement Fraud. The Pentagon Fraud Model is an approach to detect financial statement fraud. Pentagon Fraud Consists of Four Elements: Pressure (Financial Targets, Financial Stability, External Pressure, and Institutional Ownership); Opportunity (Ineffective Monitoring and Quality of External Auditor); Rationality (auditor change); Capability (Change of Directors); AndroRegance (Director's Appearance). The Population of Thist Study is Companies in the Financial Industry Classification Listed on the Indonesian Stock Exchange by Determining The Sample Using Purposive Sampling Methods. THIS STUDY USING FOUR Years Period from 2016-2019 and Optains 29 companies Selected for Data Testing. Hypothesis testing uses multiple regression analysis. The Results of Analysis Show Thrang Financial Targets (Inspective Indicators), and director of the views (Arrogance Indicator) Affect Financial Statement Fraud. Meanwhile, Financial Stability, External Pressure, Institutional Ownerships US Indicators of Pressure US US The Quality of External Auditor, Auditor Change, and Change of Directors do not AffectFinancial Statement Fraud.

Keywords


Fraud Pentagon, Financial Statement Fraud, Pressure, Opportunity, Rationality, Capability, Arrogance

Full Text:

PDF

References


(OJK) Financial Services Authority,"The Regulation of the Financial Services Authority of the Republic of Indonesia Number 39 / Pojk.03 / 2019 on the application of Anti Fraud Strategy for General Banks", 2019.

D.R. Cressey,"Otherpeople'M money: A Study in the Social PsycholOgy of Embezzlement",Free press, 1953.

D.T. Wolfe, And D. R. Hermanson,"TheFraud Diamond: Considering The Four Elements of Fraud", The CPA Journal, Vol. 74, no. 12, Pp. 38-42, 2004.

H.Crowe,"The Mind Behind The Fraudsters Crime: Key behavioral and Environmental Element". USA:Crowe Howarth LLP, 2011.

H.F. Bawakes, A. M. A. Simanjuntak, and S.C. Daat,"Testing theraints of the Fareud Pentagon to Fraudulent Financial Reporting (Study on the Company listed on the Indonesia Stock Exchange Year 2011-2015)",Journal of Accounting & Finance Region, Vol. 13, Pp. 114-134, May 2018.

M.Ulfah, E. Nuraina, and A. L. Wijaya,"The influence of Fraud Pentagon in detecting Fraudulent Financial Reporting: Empirical Studies on Banking in Indonesia listed in BEI", Scientific Education Forum of Accounting, Vol. 5, pp. 399-418. October, 2017.

J.C. Skousen, K. R. Smith, and J. C. Wright,"Detecting and Predicting Financial Statement Fraud: The Effectiveness of the Fraud Triangle and SAS no. 99", Corporate and Firm Performance Advances in Financial Economics, Vol. 13, Pp. 53-81, May 2009.

(Acfe), Association of Certified Fraud Examiner,"Report to Study The Nations: Global on Occupational

Fraud and Abuse", 2018, accessed from:http://www.acfe.com/report-to-the-nations/2018/

L. Dendawijaya,"Banking management", Second edition, Bogor: Ghalia Indonesia, 2005.

J. Loebbecke, M. Eining, J. Willingham,"Auditor's Experience with material Irregularities: frequency,

Nature, and Detectability",Auditing: A Journal of Practice & Theory, Pp. 1-28, Fall 1989.

T.Bell, S. Szykowny, and J. Willingham,"Assessing The Likelihood of Fraudulent Financial Reporting: A Cascaded Logic Approach",Working Paper, KPMG Peat Marwick, Montvale New Jersey, 1993.

T.Herdiani, Darminto., And M. G. W. Endang,"The influence of financial leverage against the profitability of studies on manufacturing companies listed on the Indonesia Stock Exchange period 2009-2011",Journal of Business Administration, Vol. 5, pp. 1-8, March 2013.

S.Claessens, S. Djankov, L. H. P. Lang,"The Separation of Ownership and Control in East Asian Corporations",Journal of Financial Economics, Vol. 58: Pp. 81-112, Issue 1-2 2000.

N.Maghfiroh, K. Ardiyani, and Syafnita,"Analysis of the influence of financial stability, personal financial need, external pressure, and ineffective monitoring on Financial StateMeNT Fraud in the Fraud Perspective",Economic and Business Journals, Vol. 16, Pp. 51-66, March 2015.

M.A. Effendi,"The Power of Good Corporate Governance: Theory and Implementasi", Jakarta: Salemba Four, 2008.

T.D. Andayani,"The effect of the Independent Board of Commissioners of the Profit Board",Thesis S2, University of Dipenogoro, Semarang, 2010.

A.M. Shelton,"Analysis of Capabilities Attribute to The Fraud Diamond", Undergraduate Honors Thereses,Paper 213, East Tennessee State University, USA, 2014.

C.Tessa, And P. Harto,"Fraudule Financial Reporting: Testing theraints of the Fenud Pentagon in the financial and banking sector in Indonesia",Proceedings of National Accounting Symposium Xix Lampung, Pp. 1-21, 2016. E issn2621-749x

P.M. Dechow, W. GE, C. R. Larson, and R. G. Sloan,"Predicting Material Accounting MissTatements",Contemporary Accounting Research, Vol. 27, no. 1, Pp. 17-82, Spring 2011.

Cashmere,"Analysis of Financial Report", Edition 1, Jakarta: Rajawali Press, 2013.

I.Ghozali,"Multivariate analysis app with SPSS program",Semarang: University of Diponegoro University Publisher, 2011.




DOI: https://doi.org/10.31334/bijak.v18i2.1778

DOI (PDF): https://doi.org/10.31334/bijak.v18i2.1778.g853

Refbacks

  • There are currently no refbacks.


Copyright (c) 2021 Majalah Ilmiah Bijak

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

MAJALAH ILMIAH BIJAK

ISSN 1411-0830 (Media Cetak) 2621-749X (Media Online)
Email :  [email protected] / [email protected]
Website: http://ojs.stiami.ac.id/index.php/bijak/index

 

View My Stats

 

 

INDEKS BY: