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Original Research Article

Fraudulent financial reporting: fraud pentagon analysis in banking and financial sector companies

Mukhtaruddin*1, Evlin Sabrina1, Arista Hakiki1, Yulia Saftiana1 and Umi Kalsum1


1Accounting Department, Faculty of Economics, Universitas Sriwijaya Palembang Indonesia.

*Corresponding Author Email yuditz(at)yahoo.com

Mukhtaruddin

Evlin Sabrina

Arista Hakiki

Yulia Saftiana

Umi Kalsum


Article Number: IBME.20.002  |   Pages: 12-24  |   Vol.8 (2), July 2020   |   DOI: https://doi.org/10.15739/IBME.20.002

 Received: March 13, 2020  Accepted: May 5, 2020  Published: July 10, 2020

Abstract

Fraudulent financial statements is a fraud form which is generally difficult to detect. The study was intended to examine the effect of fraud pentagon theory in explaining the phenomenon of fraudulent financial statements. The research population was all financial sector companies listed on the Indonesia Stock Exchange during the 2016-2018 period. This research uses six independent variables to achieve this objective, namely: financial targets, external pressure, ineffective monitoring, auditor change, change of directors, and 5 frequent number of CEO’s picture. The dependent variable was used is fraudulent financial reporting that proxied by F-Score model. Purposive sampling technique was used to determine the research sample, and data analysis techniques used multiple regression. Based on the test results, it shows that financial targets, external pressure, ineffective monitoring, auditor change, changes in directors, and many numbers of CEO’s pictures have no significant effect on the fraudulent financial reporting.

Keywords:

Fraudulent financial statement, fraud pentagon, fraud score model

JEL Code:G32, M21, M41, M42

How to Cite this Article

Mukhtaruddin M, Sabrina E, Hakiki A, Saftiana Y, Kalsum U(2020). Fraudulent financial reporting: fraud pentagon analysis in banking and financial sector companies.Issues Bus. Manage. Econ.8 (2):12-24.

Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License.


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