Analisis Pengaruh Fraud Pentagon Theory Terhadap Fraudulent Financial Reporting Pada Perusahaan Perbankan Yang Terdaftar Di Bursa Efek Indonesia Periode 2014 – 2019

Abstract

Fraudulent financial statements or fraudulent financial reporting are actions that cause a person or group of people to obtain certain benefits at the expense of other parties. Fraudulent financial statements themselves are the biggest cause of loss in the world. Therefore, financial statements that are not presented reliably and are not honestly disclosed can mislead users in making economic decisions. This study aims to analyze the effect of pentagon theory fraud proxied by five variables, that are CEO duality, change of board of directors, number of independent commissioners, level of leverage, and change of auditors to fraudulent financial reporting proxied by Beneish M-Score in banking companies listed on the Indonesia Stock Exchange (IDX) for the 2014-2019 period. This study uses 205 observational data using logistic regression analysis. The results of this research indicate that CEO duality and the change of board of directors have a significant effect on fraudulent financial reporting, while the number of independent directors, the level of leverage, and the change of auditors do not affect fraudulent financial reporting.

The Effect of Fraud Hexagon Model on Fraud Financial Statements in Companies in the Financial Sector

“…The results of this study are in line with research conducted bySetiawati & Baningrum, (2018);Bawekes, et al, (2018);Sari & Nugroho, (2020). However, this study is not in line with research byMelati, et al, (2020);Widyatama & Setiawati, (2020) which stated that the change of directors would affect the creation of a Fraud Financial Statement.…”

“…Management sees this phenomenon as an opportunity for fraud to occur. This study was supported by Melati et al, (2020); Widyatama & Setiawati, (2020) stated that the change of directors had an effect on Fraudulent Financial Reporting.…”

Influence of Fraud Star and Digital Banking on FFR in Banking Sector and the Moderating Role of Foreign Ownership

“…Meanwhile, according to Pasaribu et al (2020) auditor changes can be made by companies because of dissatisfaction with the work of the previous period. This result is also supported by research conducted by Annisya et al (2016) and Widyatama and Setiawati (2020), that the old auditors and replacement auditors, big four and non-big four auditors, have the same role in auditing financial statements, to determine whether it is free from material misstatement, either error or fraud. Meanwhile, according to agency theory, the principal will choose a competent auditor, well-named, objective, and professional in the hope that quality audit results will be obtained for the company's sustainable success.…”

“…Effect of Opportunity on Fraudulent Financial Reporting (FFR) Ferica et al (2019) and Simaremare et al (2019) in their research stated that opportunity had no significant effect on FFR. Widyatama and Setiawati (2020) stated that the independent board of commissioners did not carry out their roles and duties in supervising the running of the company properly. On the other hand, Apriani (2020) stated that opportunity is one of the driving factors for fraud.…”

“…It is consistent with the result of the partial regression test, opportunity also does not affect the occurrence of FFR. Widyatama and Setiawati (2020) stated that the recruitment of independent commissioners is only to meet financial services authority (OJK) regulatory requirements so the role of independent commissioners in supervising banking companies is not optimal. These results are supported by Simaremare et al (2019), Ferica (2019), andPasaribu et al (2020).…”